SafeWork NSW v JA Investment Group Pty Ltd

[2021] NSWDC 569

District Court

New South Wales

Medium Neutral Citation:

SafeWork NSW v JA Investment Group Pty Ltd [2021] NSWDC 569

Hearing dates:

15 October 2021

Date of orders:

22 October 2021

Decision date:

22 October 2021

Jurisdiction:

Criminal

Before:

Russell SC DCJ

Decision:

(1)   JA Investment Group Pty Ltd was convicted on 15 October 2021.

(2)   The appropriate fine is $240,000 but that will be reduced by 25% to reflect the early plea of guilty.

(3)   Order JA Investment Group Pty Ltd to pay a fine of $180,000.

(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 JA Investment Group Pty Ltd to pay the prosecutor’s costs agreed in the amount of $30,000.

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 automotive dismantling – electric equipment in close proximity to the petrol storage area - worker used electric gurney to clean ute tray in workstation – fire and explosion when electric gurney turned on – serious burn injuries – inadequate instructions and training provided in relation to working with flammable liquids and hazardous chemicals

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A, 22, 27, 28, 30A, 30B, 30D, 30E

Fines Act 1996 (NSW), ss 6, 122

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

Work Health and Safety Regulation 2017, cll 5, 34-36, 39, 342, 351, 355, 379

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

SafeWork NSW vCRS NSW Pty Ltd [2017] NSWDC 312

SafeWork NSW v JPS Car Wash Management Pty Ltd [2021] NSWDC 148

SafeWork NSW v MMP Industrial Pty Ltd [2019] NSWDC 854

SafeWork NSW v Plasser Australia Pty Ltd [2021] NSWDC 441

SafeWork NSW v SRS Star Management Pty Ltd; SafeWork NSW v Sarjeet Sidhu [2021] NSWDC 148; SafeWork NSW v MMP Industrial Pty Ltd [2019] NSWDC 854

Unity Pty Limited v SafeWork NSW [2018] NSWCCA 266

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

Texts Cited:

SafeWork NSW, “Managing Risks of Hazardous Chemicals in the Workplace” Code of Practice, July 2014

SafeWork NSW “Guidance for managing the risks associated with end of life Petrol (ULP) Vehicles” Fact Sheet

Category:

Sentence

Parties:

SafeWork NSW (Prosecutor)
JA Investment Group Pty Ltd (Defendant)

Representation:

Counsel:
M Scott (Prosecutor)
P Barry and H Pararajasingham (Defendant)

Solicitors:
SafeWork NSW (Prosecutor)
Birchgrove Legal (Defendant)

File Number(s):

2020/00351449

Judgment

1. On 15 December 2018 Mr Ali Al-Shihan was cleaning the tray of a utility with an electric gurney. When he switched the electric gurney on, an explosion and a fire occurred. He and two other workers were seriously injured.

2. JA Investment Group Pty Ltd (“JA Investment”) 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 Abed El-Hamid Chama, Mr Ali Al-Shihan and Mr Mahmoud Saadie 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 Summons is as follows:

“12.    The risk was the risk of workers, in particular Mr Mahmoud Saadie, Mr Ali Al-Shihan and Mr Abed El Hamid Chama of suffering serious injury or death as a consequence of fire and explosion occurring while they were undertaking work at the site including the task of cleaning, in the vicinity of hazardous chemicals and flammable liquids.”

Reasonably Practicable Measures

5. Paragraph 13 of the 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 Mahmoud Saadie, Mr Ali Al-Shihan and Mr Abed El Hamid Chama, 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.    Conduct a risk assessment in relation to the task which identified the hazards and risks associated with the task and identified the control measures that provide the most adequate protection against the identified risks;

b.    Identify, clearly indicate and communicate to workers where there was a risk of explosion and/or fire occurring;

c.    Require petrol, diesel and any other hazardous chemicals or flammable liquids at the site to be stored in correctly labelled containers;

d.    Separate workers from fuel including petrol and diesel by distance or barriers, by storing petrol and diesel in a locked cage away from the wrecking area or other suitable methods of separation;

e.    Require the use of suitable battery-operated equipment or intrinsically safe electrical equipment and/or electrical wiring in hazardous areas at the site;

f.    Develop, implement and enforce a safe work procedure for the task which included but was not limited to, the following:

i.    prohibited workers from using fuel including petrol and diesel as a cleaning agent; and/or

ii.    prohibited the use, handling and storage of flammable liquids and hazardous chemicals, including petrol and diesel near the “oil separator” or sum-drain; and/or

iii.   prohibited or restricted the use of electrical equipment and/or electrical outlets in hazardous areas;

g.    Provide adequate supervision to workers at the site, such as is necessary to protect the workers against the risk of fire and explosion when working with or in the vicinity of hazardous chemicals and/or flammable liquids;

h.    Provide adequate information, instruction and training to workers at the site, including but not limited to, the following:

i.    The nature of the hazardous chemicals and/or flammable liquids stored in the wrecking bay, including petrol and diesel and the risks posed to workers from the use, storage and handling of same;

ii.    The Safety Data Sheet (SDS) for fuels stored in the wrecking bay and other hazardous areas at the site, including petrol and diesel; and/or

iii.    The safe work procedure to be followed when undertaking the task and in the use, handling and storage of hazardous chemicals and/or flammable liquids including petrol and diesel.”

Background

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

7. JA Investment is a registered corporation which conducts a business or undertaking at Smithfield (“the site”) involving automotive dismantling.

8. Ms Joumana Assaad is the sole director of JA Investment. She did not play an active role in the day-to-day operation of the business. At the time of the incident Mr Abdallah Assaad as Site Manager and Mr Hassan Assaad as Office Manager were appointed to manage the operations of JA Investment at the site.

9. Mr Mahmoud Saadie was employed by JA Investment as a full-time automotive dismantler. His role required him to dismantle vehicles on a hoist, including removing the wheels, engine, gearbox, suspension and fuel tank. It also involved cleaning vehicle parts to prepare them for resale.

10. Mr Ali Al-Shihan was employed by JA Investment as a part-time automotive dismantler. His role required him to dismantle vehicles on a hoist, including removing the wheels, engine, gearbox, suspension and fuel tank. It also involved cleaning vehicle parts to prepare them for sale.

11. Mr Abed El-Hamid Chama was employed by JA Investment as a part-time automotive dismantler. His role required him to dismantle the interior of cars, including the steering wheel, car ignition and radio/CD player.

12. Mr Saadie, Mr Al-Shihan and Mr Chama are collectively referred to as “the injured workers”.

Operations at the Site – Automotive Dismantling

13. JA Investment purchased cars from car auctions, dismantled them, resold used parts and sent the rest of the vehicle to scrap.

14. The site had a concrete floor and included two “wrecking” or “dismantling” bays (“wrecking area”). Each bay had one hoist. The wrecking area was approximately 10-12 metres wide.

15. The wrecking area had a drain, referred to by JA Investment as the “oil separator”, located behind the middle of one of the hoists. It was covered by a grate and was approximately 1.5 metres deep. The ground sloped to the oil separator, so that the drain could collect all the run-off from the wrecking area. Once it was full, the oil separator would either clear itself automatically or could be manually emptied using a switch. The pump used to empty the oil separator was powered by electricity.

16. At the back of the wrecking area was a garage door. The front of the wrecking area was closed. The wrecking area did not have any mechanical ventilation.

17. On both sides of the wrecking area there were workstations where tools were located. The workstations were approximately one metre away from the hoists.

18. The electrical equipment located in the wrecking area included a compressor, an electric gurney, electrical outlets, electric recipro saws, an electric tyre machine and an electric pump to power the oil separator.

19. The dismantling process involved a forklift lifting a car and placing it on a hoist. One worker worked on each hoist to pull the vehicle apart.

20. The task of dismantling vehicles involved removing fuel tanks. A worker extracted the tank from the underside of the vehicle and placed it on a gearbox hoist. Any remaining fuel in the fuel tank was syphoned with a jiggling hose into a plastic 20-litre drum.

21. JA Investment says that the extracted petrol and diesel was stored in the same drums. Approximately 8-10 20-litre drums of petrol and/or diesel were extracted from vehicles and stored at the site daily. Mr Al-Shihan stated that at the time of the incident, approximately 8-12 20-litre drums of petrol were stored near the hoist he was working on and another 5-8 drums were stored near the other hoist. He recalled that there was no partition separating the drums of petrol and the hoist. Mr Chama reported that there were approximately 8-12 20-litre drums stored at his hoist and about the same at the other hoist.

22. JA Investment did not put labels on the petrol or diesel drums to identify them as containing a flammable liquid or to warn workers of the risks associated with a flammable liquid. The petrol and/or diesel was removed from the site regularly by both Mr Hassan Assaad and Mr Abdallah Assaad and some of the workers who used it in their own vehicles from time to time.

Classification of Petrol and Diesel Fuels

23. Petrol and diesel fuels are both a flammable liquid and a hazardous chemical.

24. The Work Health and Safety Regulation 2017 (“the Regulation”) in cl 5 defines “hazardous chemical” to mean:

“…a substance, mixture or article that satisfies the criteria for a hazard class in the GHS”.

25. The Caltex Data Sheet for Unleaded Petrol classifies petrol as a Flammable Liquid – Category 1.

26. The Caltex Safety Data Sheet for Diesel classifies Diesel as a Flammable Liquid – Category 4.

27. Under the GHS system, products classified as “Flammable liquid – Category 1” and “Flammable liquid - Category 4” are hazardous chemicals.

The Incident

28. On Saturday 15 December 2018 the injured workers were at the site.

29. Mr Abdallah Assaad told the injured workers that they were going to spend the day cleaning the yard and the hoist area as the car auctions were closed. He told Mr Saadie and Mr Chama to clean up the hoist. Mr Al-Shihan had just finished dismantling a ute which was located on one of the hoists and was instructed by Mr Assaad to clean the tray of the ute. Mr Abdallah used the forklift to place the tray on the other hoist for Mr Al-Shihan to clean.

30. At the time of the incident Mr Hassan Assaad was in the office and Mr Abdallah Assaad was in the yard, located close to the hoist area, but away from where the incident occurred. Neither of the Assaad brothers witnessed the incident. Mr Al-Shihan was not being supervised at the time of the incident.

31. Mr Abdallah Assaad said he heard a large explosion. He grabbed a fire extinguisher and started putting the fire out.

Mr Saadie’s Account

32. Mr Saadie said that on the day of the incident Mr Abdallah Assaad told the injured workers they would be cleaning out the yard. They were given a tray to clean so that it could be sold. Mr Abdallah Assaad told them to use water to wash the dirt off the tray, but Mr Al-Shihan decided to use petrol because it would clean it faster. Mr Al-Shihan turned on the gurney and an explosion and fire occurred.

Mr Chama’s Account

33. Mr Chama said that at the time of the incident he had just finished dismantling a car and was waiting for Mr Abdallah Assaad to bring him another one to work on. He said that Mr Al-Shihan was going to clean grease off the tray of a utility vehicle. He got a drum of petrol and poured it onto the tray. However, he poured too much petrol out and it spilled over onto the ground. He then went and got an electric gurney to remove the grease. The electric lead on the gurney passed through the petrol on the ground. When he turned on the gurney the petrol ignited.

Mr Al-Shihan’s Account

34. Mr Al-Shihan said that Mr Abdallah Assaad gave him a high-pressure water hose and directed him to wash the ute tray. He said Mr Assaad placed the tray on the hoist and placed the electric gurney next to the hoist to get it ready for him to do the cleaning.

35. He said that he “did not use petrol at the time” and that he “was using the water-pressure gurney to blow away the saw-dust”. Mr Al-Shihan explained that at the time of the incident the tray was in front of him and he had the gurney in both hands aiming it at the tray. As soon as he pulled the trigger on the gurney there was an explosion from behind his back and it pushed him towards the tray.

36. Mr Al-Shihan said that the electric gurney was connected to the power point on the wall behind him and was approximately 1.5-2 metres away. He said he was working right near the “oil separator” or the “sum drain” as he called it, which was the collection point for all the run-off from the entire site.

37. Mr Al-Shihan said the fire started at the electrical outlet behind him.

Injuries

38. Mr Al-Shihan was flown by helicopter to the Emergency Department of Royal North Shore Hospital. He sustained mid to deep dermal burns to his upper limbs, facial burns, a laceration to his forehead, post-traumatic stress and significant flashbacks of the event. He underwent surgery to clean and close the wound on his forehead and for debridement and grafting of the burns. Mr Al-Shihan was discharged from hospital on 1 January 2019.

39. Mr Saadie was flown by helicopter to the Emergency Department of Royal North Shore Hospital. He sustained mid to deep dermal burns to his forehead, the tip of his nose and both forearms. Mr Saadie also sustained a right ear burn and singed facial hair. Mr Saadie was discharged from hospital on 21 December 2018.

40. Mr Chama was intubated by paramedics at the scene and taken to the Burns Unit of Concord Repatriation General Hospital. He sustained partial thickness burns to his face, neck, both upper limbs and both posterior thighs. He underwent surgery for debridement and xenografting of the burns. Mr Chama was discharged from hospital on 18 December 2018. He briefly returned to work at the site four to five months after the incident however is not currently working.

Post-Incident Inspection

41. NSW Fire and Rescue (“NSWFR”), NSW Police and SafeWork NSW responded to the incident.

42. NSWFR made the following observations at the site:

1. The human factors contributing to ignition were “failure to maintain/clean”.

2. There was a “strong smell of petrol vapours in this area. These vapours appeared to be coming from spare parts comprised of fuel tanks”.

3. Cabramatta Station Officer Sean McIntosh was “informed by factory workers that a pressure cleaner was being used at the time of ignition. The pressure cleaner in this area looked to have been connected to an electric compressor, this being a likely ignition source”.

43. SafeWork NSW Inspectors made the following observations at the site:

1. The pressure washer had no signs that it had been inspected and tested by a competent person.

2. There were multiple fuel sources in the area where the incident occurred, including fuel tanks with petrol residue and petrol being stored in unlabelled containers.

3. The petrol was being stored in open storage containers not suitable for the storage of flammable liquids and in proximity to ignition sources and electrical outlets in the area.

Systems of Work Before the Incident

Risk assessment and Safe Work Procedure

44. JA Investment was required, under cll 34-36 and 351 of the Regulation, to:

1. Identify reasonably foreseeable hazards that could give rise to a risk to health and safety.

2. Eliminate identified risks so far as is reasonably practicable.

3. If it was not reasonably practicable to eliminate the risk, then minimise the risk so far as was reasonably practicable by implementing control measures in accordance with the hierarchy of control.

4. Manage risks to health and safety associated with using, handling, generating or storing a hazardous chemical at a workplace.

45. The SafeWork NSW, “Managing Risks of Hazardous Chemicals in the Workplace” Code of Practice, July 2014 (“the Code”) sets out, at Part 3, Appendices G and F, how to conduct a risk assessment. Part 4 of the Code sets out the hierarchy of risk controls and provides guidance on how to develop and implement control options.

46. JA Investment did not undertake a risk assessment for the task. It did not identify the hazards associated with the nature of the work being carried out, or that the task could interact with hazardous chemicals being stored at the site. It did not identify which workers were at risk of exposure or identify if and what kind of control measures should be implemented.

47. JA Investment did not have a safe system of work for the task of cleaning the wrecking area and cleaning vehicle parts. JA Investment said that it provided verbal instruction to workers that the system of work for cleaning parts of vehicles was to use a degreaser, which was provided. Mr Abdallah Assaad said that the degreaser was stored in spray bottles and workers were directed to mix it with water and to spray a little bit on the area they were cleaning. Workers were to leave it on for four to five minutes and then use the gurney to remove the degreaser.

48. However:

1. None of the injured workers reported being aware of or being directed to use degreaser to clean vehicle parts.

2. Some of the injured workers reported witnessing Mr Abdallah Assaad directing Mr Al-Shihan to use water to clean the tray.

3. Some of the injured workers reported witnessing Mr Al-Shihan using petrol to clean the tray.

Induction

49. The injured workers were not adequately inducted to the site by JA Investment.

50. Mr Abdallah Assaad said that “in the industry, it’s either you know how to work in it, or you don’t know, so on the first day you’ll either tell, yes, this guy knows what he’s doing, or does not know what he’s doing”.

49. Mr Abdallah Assaad said that he would watch workers for a period of time when they first began their employment to make sure they knew what they are doing. Mr Chama explained that there was no training but he was shown what parts to dismantle by Mr Abdallah.

Training

52. JA Investment was required, under cl 39 of the Regulation, to ensure that information, training and instruction provided to a worker is suitable and adequate and, as far as reasonably practicable, provided in a way that is readily understandable by any person to whom it is provided.

53. The Code discusses information, training, instruction and supervision at Part 4.4.

54. JA Investment did not provide adequate training for the task being performed at the time of the incident. JA Investment said that “training is not performed upon every task - it is rather assumed knowledge”.

55. Mr Al-Shihan was not provided with adequate training in relation to the potential risk of explosion associated with the use of electrical equipment in close proximity to the petrol storage area. JA Investment said that it was “common knowledge of a skilled professional in that field, to be aware of this risk”. Mr Al-Shihan confirmed that there were no instructions, documents or signs in the area to warn him of the potential risks associated with ignition sources in hazardous areas.

56. Mr Al-Shihan was not provided with adequate training in relation to ignition sources at the site.

Supervision

57. JA Investment had a duty to provide supervision to the injured workers under cl 379 of the Regulation as the injured workers were exposed to hazardous chemicals at the workplace.

58. Mr Abdallah Assaad was the supervisor of the injured workers. He gave the workers directions in relation to the task being completed at the time of the incident.

59. Mr Abdallah Assaad was not aware of what happened at the time of the incident and reported that he was informed by the other injured workers of what had occurred.

60. JA Investment did not provide Mr Al-Shihan with suitable and adequate supervision at the time of the incident, as:

1. Mr Al-Shihan had only been working at the site for approximately three weeks before the incident.

2. Mr Al-Shihan had not performed the task of cleaning a ute tray at the site before the incident.

3. The task exposed Mr Al-Shihan to a risk of death or serious injury as a result of fire and explosion.

The Use of Petrol as a Cleaning Agent

61. JA Investment stated that cleaning with petrol at the site was prohibited, however:

1. Mr Abdallah Assaad stated that at the time of the incident, fuel was being stored behind the workers, on a shelf where they put tow bars. The fuel was not locked away or removed from the work area and was accessible to workers.

2. Mr Chama had seen other workers use petrol to clean gear boxes, engines and car parts on many occasions, though reported that he had never done so himself.

3. Mr Chama reported that he had not witnessed Mr Abdallah Assaad using petrol as a cleaning agent. However, Mr Chama said he was aware of the practice because he had heard Mr Assaad instruct others to do so.

4. Mr Chama said that he was not instructed by JA Investment not to use petrol as a cleaning agent at the site.

5. Mr Al-Shihan said that Mr Abdallah Assaad told the workers to “use petrol with a spraying bottle to clean the grease off engines, gearbox, parts”.

6. Mr Al-Shihan said that through his experience “you normally use petrol to degrease or loosen the grease first then use water-pressure to wash away” and stated that this was the same process used by JA Investment at the site.

7. Mr Al-Shihan said that during the course of his employment at JA Investment no one told him not to use petrol as a cleaning agent.

Ignition Sources

62. Clause 355 of the Regulation provides that a person must, if there is a possibility of fire or explosion in a hazardous area being caused by an ignition source being introduced into the area, ensure that the ignition source is not introduced into the area (from outside or within the space).

63. The Code discusses physicochemical risks at Part 3.4. It states that fire and explosion can result when the following three primary elements come together: – a source of fuel, a source of oxygen and an ignition source – these elements are commonly referred to as the fire triangle. The Code states that the fuels that present the highest risk are those hazardous chemicals that are flammable, including flammable liquids and their vapours and fumes (which include petrol and diesel).

64. The Code states the sources of fuels, oxygen and ignition should be identified in the workplace and further states that ignition sources that have the potential to ignite a flammable or combustible material must be identified.

65. The Code states that an ignition source can be one of three broad types – flames, sparks and heat. The Code identifies that common examples of a spark are “electric motors” and “electrical equipment like power points”. It also states that some electrical equipment may be a source of ignition.

66. Appendix H to the Code lists examples of common fuel and oxygen sources. Listed as common fuel sources are petrol and diesel. Appendix I lists fire and explosion risks. Listed as the risks in the “automotive industry” are “fuels, oils, spray painting, electrical, solvents, oxy-acetylene”.

67. In addition, the SafeWork NSW “Guidance for managing the risks associated with end of life Petrol (ULP) Vehicles Fact Sheet” identifies that petrol is an extremely volatile liquid which gives off flammable vapours at very low temperatures. When mixed with air, these vapours can form a flammable atmosphere that will readily burn or explode if an ignition source is present. Flammable vapours will be released when petrol is handled, extracted from vehicles, transferred between storage tanks, drums or cans and whenever petrol is spilt or exposed to the air.

68. The possible fuel sources in the wrecking area at the time of the incident are listed below:

1. Mr Abdallah Assaad said that at the time of the incident, fuel was being stored behind the workers in the wrecking area on a shelf where they put tow bars. JA Investment said that petrol was being stored approximately three to four metres away from where Mr Al-Shihan was working at the time of the incident. Mr Al-Shihan said that it was being stored approximately one metre from where he was working at the time of the incident.

2. JA Investment said that approximately 8-10 20-litre drums of petrol and/or diesel were extracted from vehicles and stored at the site daily. Mr Al-Shihan said that at the time of the incident, approximately 8-12 20-litre drums of petrol were stored near the hoist he was working on and another 5-8 drums were stored near the other hoist. Mr Chama also said that there were approximately 8-12 20-litre drums stored at his hoist and about the same at the other hoist.

3. Mr Al-Shihan recalled that the petrol containers often accumulated over the week and were not taken off site daily.

4. Mr Al-Shihan said that the area he was working on had an incline so that the run-off (petrol, grease, water) could run down to the underground storage. He said he was working next to the collection point of all run-off for the entire wrecking area including the other hoist. JA Investment call this the “oil separator”.

69. The possible ignition sources in the wrecking area at the time of the incident include a compressor, an electric gurney, electrical outlets, electric recipro saws, an electric tyre machine and an electric pump to power the oil separator.

Correct Storage and Labelling of Hazardous Chemicals

70. JA Investment was required under cl 342 of the Regulation to correctly label containers used for hazardous chemicals.

71. JA Investment did not correctly label the containers into which they decanted petrol and diesel.

Systems of Work Following the incident

72. Following the incident JA Investment made the following changes at the site:

1. Purchased a petrol gurney and removed it from the wrecking area.

2. Purchased a battery saw.

3. Started using a lockable cage for the storage of petrol, which was located outside the wrecking area and next to the office. The key for the cage remained in the office and anyone who wanted to access the petrol storage cage had to obtain the key from management.

4. Purchased fuel drums designed for the storage of fuel. It started using two different coloured drums, yellow and red, to differentiate petrol from diesel.

5. Developed a Safe Work Method Statement for the task of “removing fuel tanks from vehicles”. It specified that fuel removed from vehicles had to be placed in an approved fuel container and that workers had to ensure that all sources of ignition are removed, and the fan is turned on to promote ventilation. Petrol is then stored on a bund tray in a designated flammables storage cage that is closed and secured. Empty fuel tanks are to be stored in a designated holding bay.

6. Installed a new hoist that was intrinsically safe.

7. Had electrical items and extension leads tested and tagged.

8. Obtained safety data sheets and removed the LPG cylinder from the office.

9. Developed a WHS Management Plan.

73. JA Investment trained their workers in the above procedures.

Evidence for the Defendant

Affidavit of Mr Hassan Assaad

74. Mr Hassan Assaad affirmed an affidavit dated 1 October 2021 (DX 1).

Background to the Business

75. JA Investment is a small family-run business which undertakes the dismantling of vehicles and selling spare parts. The company was established on 4 May 2015 and generally services residents of the local Fairfield and Cumberland communities.

76. Ms Joumana Assaad, Mr Hassan Assaad’s wife, is the sole director of JA Investment. JA Investment has six full-time employees, including Mr Hassan Assaad, Mr Abdallah Assaad and Mr Mahmoud Saadie, who was injured in the incident.

77. As Office Manager, Mr Hassan Assaad’s usual duties involved liaising with clients and suppliers, sourcing various parts for vehicles, attending to clerical tasks and managing the company’s finances. Mr Abdallah Assaad, as Site Manager, oversaw the “wrecking area” where vehicles are dismantled.

78. JA Investment has significant involvement in the community and regularly makes donations to various charities and religious organisations. Mr Hassan Assaad attached to his affidavit a letter of reference from the Imam of the Al-Bayan Institute. This is a religious organisation that runs a community centre in Regents Park that JA Investment regularly donates to.

JA Investment’s Approach to Safety Prior to the Incident

79. All training and instructions provided to new and existing employees were provided verbally and were not documented. Intermittent inspections were carried out in relation to the plant and equipment however they were not documented.

80. Workers were never directed to use petrol to clean vehicle parts. Workers were instead supplied with de-greasers.

81. Drums of petrol were distinguished by labelling them with a blue marker. Mr Hassan Assaad believes that some of the drums were also labelled as “highly flammable”. Usually, the drums of petrol were positioned around one to two metres away from the hoist in the “wrecking area”.

JA Investment’s Approach to Safety After the Incident

82. Mr Hassan Assaad acknowledged that more could have been done by JA Investment to ensure the workers’ safety and well-being.

83. In January 2019 JA Investment implemented a “Site WHS Management Plan” which formally reaffirms the company’s commitment to safety.

84. JA Investment now clearly labels petrol and diesel containers, stores the containers in a metal cage about 10 metres from the “wrecking area” and has implemented a policy for handling petrol. All workers are trained in the Petrol Handling Policy.

Remorse

85. Mr Hassan Assaad stated that “the Company deeply regrets its failings that led to the incident”.

86. Mr Hassan Assaad, Mr Abdallah Assaad and Ms Joumana Assaad spent the days following the incident visiting the injured workers and offered to assist in any way that they could. This included financial assistance so that the injured workers could focus on their recovery and rehabilitation.

Affidavit of Mahmoud Saadie

87. Mr Mahmoud Saadie affirmed an affidavit on 1 October 2021 (DX 2). Mr Saadie has been employed as a mechanic by JA Investment since it was established in May 2015.

88. Mr Saadie stated that he was in hospital for nine days following the incident and that Mr Hassan Assaad and Ms Joumana Assaad visited him in hospital every day.

89. Mr Hassan Assaad and Ms Joumana Assaad provided Mr Saadie and his family with financial support while Mr Saadie was in hospital, and for the following three or four months while Mr Saadie was unable to work. During those three to four months Mr Hassan Assaad and Ms Joumana Assaad called Mr Saadie every day to check on his progress and inquire as to whether he required any assistance.

90. Mr Saadie returned to work at JA Investment in April or May 2019. JA Investment provided Mr Saadie with a flexible return to work, allowing him to commence with more administrative and clerical duties for the first month while he was still undertaking rehabilitation. Mr Saadie returned to his role in the wrecking area by June 2019.

91. Mr Saadie stated that when he returned to his usual role in the wrecking yard, JA Investment had further improved its safety measures on site.

Consideration

92. 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

93. 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].

94. 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].

95. 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.”

96. 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].

97. 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.

98. 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.

99. 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.”

100. 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.”

101. 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.”

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

1. JA Investment through its managers knew of the risk. In any event the risk was foreseeable and there was guidance material directed to this particular risk.

2. The likelihood of the risk occurring was high, a matter properly conceded by counsel for the defendant. There were many sources of flammable vapour and multiple potential ignition points near the three injured workers.

3. The potential consequences of the risk were death or serious injury.

4. Simple and well-known steps were readily available to eliminate or minimise the risk.

5. There was no great burden or inconvenience in these steps being implemented. JA Investment took remedial measures quickly after the incident.

6. The harm caused was extremely serious. Three workers suffered significant burns which will have lifelong effects. The devastating impact upon Mr Al-Shihan is set out in detail in his Victim Impact Statement (PX 2) which is summarised below.

7. 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.

8. Prosecutions involving explosions caused by flammable vapours being ignited by sparks often come before the court. Many of these incidents lead to workers suffering serious burns which have long term effects. See: SafeWork NSW v Plasser Australia Pty Ltd [2021] NSWDC 441; SafeWork NSW v JPS Car Wash Management Pty Ltd [2021] NSWDC 148; SafeWork NSW v SRS Star Management Pty Ltd; SafeWork NSW v Sarjeet Sidhu [2021] NSWDC 148; SafeWork NSW v MMP Industrial Pty Ltd [2019] NSWDC 854; SafeWork NSW vCRS NSW Pty Ltd [2017] NSWDC 312.

103. Both counsel submitted that the matter fell into the upper half of the mid range. That is also my view. I find that the level of culpability of JA Investment is in the upper half of the mid range.

Deterrence

104. 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].

105. The penalty must reflect the need for specific deterrence. JA Investment is still conducting a business. Its operations involve automotive dismantling and the continuing engagement of workers.

Aggravating Factors

106. The injury, emotional harm, loss or damage caused to three workers by the offence was substantial: s 21A(2)(g) Crimes (Sentencing Procedure) Act 1999.

Mitigating Factors

107. JA Investment does not have a prior record of convictions: s 21A(3)(e) Crimes (Sentencing Procedure) Act 1999.

108. JA Investment is otherwise of good character: s 21A(3)(f) Crimes (Sentencing Procedure) Act 1999. The steps which it took after the incident demonstrate this. JA Investment has been in business for six years. JA Investment has been a good corporate citizen by making substantial donations to charitable causes.

109. JA Investment is unlikely to re-offend: s 21A(3)(g) Crimes (Sentencing Procedure) Act 1999.

110. JA Investment 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.

111. JA Investment 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 injuries to Mr Chama, Mr Al-Shihan and Mr Saadie were caused by its actions.

112. JA Investment 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 JA Investment a 25% discount for an early plea.

113. JA Investment gave assistance to law enforcement authorities: s 21A(3)(m) Crimes (Sentencing Procedure) Act 1999. It co-operated at all times with the prosecutor and provided all documents requested in a prompt fashion.

Capacity to Pay a Fine

114. 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.

115. 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.”

116. There was no submission about capacity to pay, so this issue does not arise.

Victim Impact Statement

117. The defendant was convicted at the sentence hearing on 15 October 2021.

118. Part 3 Division 2 of the Crimes (Sentencing Procedure) Act 1999 deals with Victim Impact Statements. The provisions apply to an offence being dealt with by the District Court where the offence results in the death of, or actual physical bodily harm to, any person – s 27(2)(a).

119. By s 28(1) a primary victim may prepare a statement that contains particulars of the following suffered as a direct result of the offence:

1. Any personal harm.

2. Any emotional suffering or distress.

3. Any harm to relationships with other persons.

4. Any economic loss or harm that arises from any matter referred to in (1)-(3) above.

120. A Victim Impact Statement may be tendered to the court only by the prosecutor – s 30A(2). A court must accept a Victim Impact Statement tendered by a prosecutor if the statement complies with the requirements of the Division – s 30B. A victim to whom a Victim Impact Statement relates may read out the whole or part of their Victim Impact Statement – s 30D(1).

121. A court to which a Victim Impact Statement has been tendered must consider the statement at any time after it convicts but before it sentences, and may make any comment on the statement that the court considers appropriate – s 30E(1).

122. The prosecutor tendered a Victim Impact Statement of one of the injured workers, Mr Al-Shihan, dated 6 October 2021 (PX 2). Mr Al-Shihan commenced working for JA Investment in 2014. He left JA Investment in September 2017 to work for another repair shop. In November 2018 he returned to working for JA Investment after Mr Abdallah Assaad offered to pay him more money.

123. When Mr Al-Shihan turned the gurney on there was an explosion and he found himself engulfed in flames with a piece of metal sticking out of his forehead. Mr Shihan explained that he thought he was going to die.

124. Mr Al-Shihan ran outside to the front of the building. He looked at his arm and saw his skin bubbling and peeling off. He looked at his reflection in one of the vehicles parked on the side of the driveway and saw skin hanging off his forehead. Mr Al-Shihan passed out. He sustained burns to both forearms, his face, his airways and injuries to his head, neck and lower back from when he was thrown out of the work bay by the explosion.

125. Mr Al-Shihan woke up in the Intensive Care Unit at Royal North Shore Hospital at 10.00pm that evening. Mr Al-Shihan described the next three weeks as unbearable. He was confined to his hospital bed not able to move or use his arms and was in a considerable amount of pain. Most of the time he felt like the pain medication did not help.

126. Mr Al-Shihan explained that he had issues with memory while he was in hospital. He wasn’t sure that he would be discharged unless his memory improved so he cheated on the memory tests that the nurses conducted. He did not want to stay in hospital any longer and wanted to get back home to his normal life.

127. Mr Al-Shihan stated that since the incident he has lost almost three years of his life due to pain and suffering. He feels that the plans he had for his future will remain unaccomplished and he is uncertain when his life will return to normal. He stated that his life will never be the same again due to the incident.

Physical Impact

128. Mr Al-Shihan stated that the incident has impacted his physical abilities greatly. He is now significantly scarred on both arms, has a scar on his forehead and a scar on his thigh from skin grafting. He has lost the strength he had in both of his arms and does not have the same ability he had prior to the incident to lift and carry heavy items.

129. Mr Al-Shihan has lost approximately 25kg which he believes is mostly from muscle loss. His physical appearance has changed due to not being able to exercise or take part in physical activities. He has lost motivation to get out of bed, exercise or interact with anyone and he has too much back pain to lift anything heavy.

130. Mr Al-Shihan wears long sleeve tops most of the time as he does not want people looking at his scarred arms and because he experiences pain when the sun is directly on his arms. He has been applying Sorbolene cream which provides only minimal relief. The skin grafts on his arms get very itchy. This worsens in the warmer months.

131. In the early days after being discharged Mr Al-Shihan made multiple trips each week to the Royal North Shore Hospital for treatment to change the dressings on his arms, attend hand therapy sessions and to speak with a social worker. The hand therapist told Mr Shihan that there was nothing else they could do for his arms and that he should continue applying Sorbolene at home and continue with the hand exercises.

132. Mr Al-Shihan attended physiotherapy sessions for his lower back pain which helped temporarily. His orthopaedic surgeon has recommended a spinal fusion for his lower back. He has decided not to go ahead with the surgery however may have no choice but to have the surgery in the future.

133. Mr Al-Shihan stated that he is incapable of doing his old job now.

Psychological and Emotional Impact

134. For a long time after the incident Mr Al-Shihan stopped taking care of his personal appearance. He stopped showering every day, stopped shaving his facial hair and getting haircuts and would go all day without eating or drinking. He secluded himself because he was ashamed of his appearance and did not want to face the reality of what his appearance had become. Mr Al-Shihan stated that he used to be a confident man and that he had not felt insecure about himself until he was injured.

135. Mr Al-Shihan has been diagnosed with Post Traumatic Stress Disorder and consults a psychologist on a monthly basis. He experiences difficulties falling asleep and staying asleep, suffers from nightmares and flashbacks of the incident, wakes up multiple times during the night sweating and shaking and is woken up by body spasms. When he is unable to sleep, he thinks about where he would be in his life if he had not been injured. Mr Al-Shihan started drinking to help him sleep and to block out the thoughts going through his mind.

136. Since the incident Mr Al-Shihan has noticed that loud noises scare him and that he gets startled easily. He continues to avoid anything that involves flames, fire or something that may explode such as gas bottles, petrol stations and fireworks.

137. Mr Al-Shihan stated that he had plans for his future such as travelling overseas, buying a house, and starting a family which he can no longer afford as the compensation payments are significantly less than his pre-injury earnings. He stated that he was raised to be the man of the house and should be working and gaining a good income to support his family. He goes through severe depression now which he had never experienced prior to the incident.

Social Impact

138. Mr Al-Shihan stated that prior to the incident he regularly went to the gym and went fishing, hunting and skydiving with his friends. He no longer finds joy in his hobbies and is unable to be outdoors in the sun for long periods due to his burns.

139. Mr Al-Shihan has distanced himself from everyone around him including his family and friends. He stated that following his injuries he felt like a different person. Mr Al-Shihan stated that he shuts down and becomes quite angry when people try to help him. He feels like a failure as he is no longer able to do the things he used to enjoy doing.

140. Mr Al-Shihan avoids phone calls as he doesn’t want to be asked about the incident. Eventually most people ceased trying to contact him. Mr Al-Shihan moved to Queensland as he wanted to be in a place where no one knew him and he could be alone. Due to the COVID-19 lockdown and his regular medical appointments in New South Wales Mr Al-Shihan reluctantly moved back to Sydney.

141. Prior to moving to Queensland Mr Al-Shihan ended his relationship with his partner. He stated that they were constantly arguing and that he would get angry at the drop of a hat. He reconnected with his partner six months ago. He stated that it has been tough and he finds it hard to communicate with her. He is concerned that she may not be able to stand him much longer and will decide to end things.

142. Mr Al-Shihan now requires assistance from his mother or partner to eat, shower, change his clothes, drive him around and remind him to take his medications. He only feels comfortable driving short distances to familiar locations. Currently Mr Al-Shihan takes Oxycodone, Pantoprazole, Paracetamol, Pregabalin, Quetiapine, Loratadine and Macrogol 3350. His doctors have advised him that he will continue to require this level of medication or something similar in the indefinite future.

143. Mr Al-Shihan stated that he has great difficulty concentrating. Prior to the incident he would spend hours being absorbed in working on his car but now he is unmotivated and is not physically capable of doing this.

Financial Impact

144. Mr Al-Shihan stated that prior to the incident he was working full time and earning $1,500 nett per week. After the incident JA Investment informed the workers compensation insurer that he was only working part-time and earning $500 net per week. This was very upsetting to Mr Al-Shihan as he put a lot of time and hard work into his job.

145. Mr Al-Shihan stated that if the incident did not happen he would not be in the position he is today. He loved working with cars and has been deeply affected by being unable to work to his full potential and earn the money he was earning before the incident.

146. Mr Al-Shihan stated that ever since he was able to work he has worked hard to earn his weekly wages. He has never had to rely on the government or an insurance company for weekly payments and feels ashamed that he has had to rely on others for money. He now struggles to keep on top of his bills and does not know when he will become financially independent, to be able to own a home or start a family.

Costs

147. The parties have agreed to an order that the defendant is to pay the prosecutor’s costs in the amount of $30,000.

Penalty

148. My orders are:

1. JA Investment Group Pty Ltd was convicted on 15 October 2021.

2. The appropriate fine is $240,000 but that will be reduced by 25% to reflect the early plea of guilty.

3. Order JA Investment Group Pty Ltd to pay a fine of $180,000.

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 JA Investment Group Pty Ltd to pay the prosecutor’s costs agreed in the amount of $30,000.

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