Industrial Relations Commission New South Wales

• Medium Neutral Citation: Nash v Austerberry Directional Drilling Services Pty Ltd [2013] NSWIRComm 37
• Hearing dates: 29 April 2013
• Decision date: 22 May 2013
• Jurisdiction: Industrial Court of NSW
• Before: Staff J

Decision

1. The offence is proven and a verdict of guilty is entered.

2. The defendant is convicted of the offence, as charged.

3. The defendant is fined an amount of $170,000 with a moiety thereof to the prosecutor.

4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed or, if agreement cannot be reached, as assessed.

• Catchwords: OCCUPATIONAL HEALTH AND SAFETY - prosecution under s 8(2) of the Occupational Health and Safety Act 2000 - petroleum and coal seam gas industries - laying underground pipeline - extraction of pipe - recoil - fatality - objective seriousness - absence of risk assessment - reasonably foreseeable risk to safety - existence of simple and straightforward remedial steps - general deterrence - specific deterrence - measures introduced to minimise and eliminate risks - subjective factors - good corporate citizenship - victim impact statement - no prior conviction - plea of guilty - penalty - costs
• Legislation Cited: Crimes (Sentencing Procedure) Act 1999; Occupational Health and Safety Act 2000
• Cases Cited: Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610; Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8; Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313; Fletcher Construction Australia Ltd v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66; Inspector Beacham v Delta Shelving Systems Pty Ltd [2012] NSWIRComm 103; Inspector McGrath v Cooper [2013] NSWIRComm 14; Inspector Simpson v Tomago Aluminium [2005] NSWIRComm 117; McLean v Tedman (1984) 155 CLR 306; Nesmat Pty Limited v WorkCover Authority of New South Wales (1998) 87 IR 312; Wong v Melinda Group Pty Ltd (1998) 82 IR 118; WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd [2001] NSWIRComm 50; (2001) 105 IR 81; WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163
• Category: Principal judgment
• Parties: Jennifer Anne Nash (Prosecutor); Austerberry Directional Drilling Pty Ltd (Defendant)
• Representation: Mr I Taylor SC with Ms J McDonald (Prosecutor); Ms K Nomchong SC (Defendant); Crown Solicitor's Office (Prosecutor); Ebsworth & Ebsworth (Defendant)
• File Number(s): IRC 1292 of 2011

Judgment

1 In these proceedings Austerberry Directional Drilling Services Pty Ltd ("the defendant") has been charged with an offence pursuant to s 8(2) of the Occupational Health and Safety Act 2000 ("the OHS Act"). This section relevantly provides:

8 Duties of employers

...

(2) Others at workplaceAn employer must ensure that people (other than the employees of the employer) are not exposed to risks to their health or safety arising from the conduct of the employer's undertaking while they are at the employer's place of work.

2 The defendant provides services including installing pipelines using trenchless technology called "horizontal directional drilling" ("HDD"), particularly in respect of the petroleum and coal seam gas exploration industries. In or about August 2009, it employed approximately 17 employees with five engaged in administration.

3 Around the middle of 2009, Eastern Energy Australia Pty Ltd ("EEA"), a company that undertakes coal seam gas exploration in New South Wales (on behalf of Eastern Star Gas Ltd ("ESG"), a publicly listed company and the holding company for EEA and other companies), contracted with the defendant to install a pipe under Bohena Creek, a worksite located near Narrabri in regional New South Wales ("the work site"). The length of the pipeline required to be installed under Bohena Creek was between 280 and 350m. The pipeline was constructed from 200mm high density polyethylene pipe.

4 On 31 July 2009, the pipeline became stuck and was no longer being pulled through a bore hole because a reamer was no longer attached to the drilling rods. A reamer is employed to enlarge or "true" a hole or bore. It can also be used on the inside of pipes and drilled holes to remove burrs.

5 On the same day, a meeting occurred to discuss the problem of the stuck pipe and possible solutions, including leaving the pipeline and reamer in the ground, starting again and attempting to retrieve it. In attendance was Mr Bruce Austin who was the sole director and shareholder of a company known as the Saver Guys Pty Ltd ("TSG"); Mr Dan Roulston, an employee of GD Pipelines who was appointed as Site Supervisor; and employees of the defendant, including Mr Shayne Austerberry, the sole director of the defendant, who was appointed the supervisor of the drill crew on the Bohena Creek Project.

6 The defendant decided, following those discussions, and with the agreement of those at the meeting, to try and pull the pipeline out from under the ground. Six retrieval attempts on 31 July 2009 failed.

7 On 1 August 2009, Mr Austerberry decided that a further attempted should be made at pulling the pipeline out from under the ground. Mr Austin started operating an excavator for the retrieval process. After about 35m of pipe had been extracted, Mr Austerberry took over driving the excavator as Mr Austin was having difficulty going in a straight line while reversing. He told Mr Austin to go and sit on a log approximately 17m from the pipeline, saying "Keep out of the road and go and sit down there" pointing to the tree stump or log where the employees earlier had taken a "smoko".

8 At approximately 3.45pm the chain attached to the pipe broke (for the second time that day) and the pipeline recoiled. A short time later Mr Milne found Mr Austin lying on the ground adjacent to the entry pit and inside the orange bunting that had been placed around the pit ("the incident").

9 Mr Austin was transferred by helicopter ambulance, initially to Tamworth Hospital, and subsequently to the John Hunter Hospital in Newcastle.

10 On 4 August 2009 it was found that there was negligible neurological recovery and after the ventilator was removed, Mr Austin died from his injuries at approximately 5.30pm.

11 The autopsy found that the direct cause of death was a closed head injury. Mr Austin had suffered a cerebral haemorrhage, haemorrhage around the upper spinal cord, a broken jaw, and an injury and laceration involving the left earlobe and a bruised scalp. Mr Austin was fatally injured as a result of being struck in the head by the recoiling pipeline.

The charge

12 The defendant in an application for order was charged with a breach of s 8(2) of the OHS Act, by failing to:

Ensure that people, other than employees of the Defendant, in particular Mr Bruce Austin, were not exposed to risks their health or safety arising from the conduct of the Defendant's undertaking while they were at the Defendant's place of work, contrary to section 8(2) of the OHS Act.

13 The particulars of the charge were:

THE RISK

1. The Defendant, by its acts and omissions further particularised below, exposed Bruce Austin to the risk that he would be struck by a recoiling polethylene pipeline causing him injury.

2. The Defendant undertook the activity of pulling a polyethylene pipeline out from under the ground (the Activity) as it had become stuck, instead of leaving that pipeline underground, drilling a new hole and installing a another line of pipe.

3. The Defendant failed to take any, or any adequate steps to identify the risks associated with the Activity before the Defendant proceeded with that activity and in particular the Defendant:

a. failed before conducting the Activity to conduct a risk assessment of that activity;

b. failed before conducting the Activity to record a risk assessment of that activity.

4. The Defendant failed to take any, or any adequate steps to determine a safe work method for the Activity and communicate that method to the workers at the Work Site before the Defendant proceeded with that activity and in particular the Defendant:

a. failed to devise a safe work method for the Activity;

b. failed to document a safe work method for the activity;

c. failed to give any or any adequate information or instruction to the workers at the Work Site as to a safe work method to conduct the Activity.

5. The Defendant failed to ensure that no person, in particular Bruce Austin, would be in a position where that person could be struck by the polyethylene pipeline recoiling, and in particular, when undertaking the Activity, the Defendant:

a. failed to establish an exclusion zone, being an area where no person was to enter lest they be struck by the pipeline recoiling (the exclusion zone area);

b. failed to give any, or any adequate information to Mr Austin as to the danger of standing within such an area;

c. failed to give any, or any adequate instructions to Mr Austin requiring him to remain outside the exclusion area;

d. failed to erect a barrier, such as fencing or bunting, to mark out the boundary of the exclusion area;

e. failed to supervise Mr Austin to ensure he did not enter the exclusion area; and

f. failed to check that Mr Austin was outside the exclusion area before engaging in the Activity.

6. Further to Particular 2, the Defendant failed to cease the Activity, or assess the safety of the Activity, once a chain being used to pull the pipeline broke for the first time.

7. The Defendant failed to take steps to prevent the pipeline recoiling, and in particular:

a. failed to consider:

i. the pulling-power of the excavator being used to pull the pipeline out of the ground; and

ii. the break-strength of the pipeline and of the chain connecting the pipeline to the excavator;

to assess whether there was a risk that when using the excavator the pipeline or chain could fail;

b. failed to ensure that the pulling-power of whatever machine was used to pull the pipeline out from the ground was less than the break-point of the pipeline and of whatever was used to connect the pipeline to that machine;

c. failed to use equipment appropriate for the task, in particular slings rather than chains and a pulling head or pipecap attached to the end of the pipeline;

d. failed to pull the pipeline out in short sections, by pulling a section and then cutting it, or by pulling a section and then re-positioning the sling to a position close to the exit pit.

14 The defendant pleaded guilty to the offence as charged.

15 On 4 April 2013, in accordance with the procedure that had been agreed upon between the parties, a statement of agreed facts ("ASF") was provided to the court. The prosecutor requested that a conviction be recorded against the defendant.

16 Having heard from the parties on 4 April 2013, I was satisfied that the defendant was guilty of the offence. Accordingly, I convicted the defendant of the offence, as charged. It follows that this judgment is concerned with the question of penalty.

Prosecutor's evidence

17 Mr I Taylor of senior counsel who appeared with Ms J McDonald of counsel for the prosecutor, tendered the ASF which provided:

1. At all material times, the Prosecutor was a government official (Investigator) appointed under section 127 of the Mine Health and Safety Act 2004 and thereby by section 47A of the Occupational Health and Safety Act 2000 (OHS Act) taken to have been appointed as an inspector under the OHS Act and authorised by section 106 of that Act to institute proceedings in this matter.

2. At all material times the Defendant Austerberry Directional Drilling Services Pty Ltd (ACN 081 885 083) (ADDS) was a corporation with its registered office located at 93a Young Street, Carrington, NSW, 2294.

3. At all material times the sole director of ADDS was Mr Shayne Austerberry, who was concerned in the management of ADDS.

4. At all material times the sole shareholder of ADDS was a company called Directional Nominees Pty Ltd (ACN 074 568 657), the sole shareholder of which was Mr Shayne Austerberry.

5. ADDS provides services including installing pipelines using a trenchless technology called horizontal directional drilling (HDD).

6. At all material times, ADDS was an employer within the meaning of the OHS Act. On 1 August 2009, ADDS employed approximately 17 people. Of those, 5 were engaged in administration including Mr Bob Reynolds, General Manager and Mr Wayne Hunt, Operations Manager.

7. Aside from being the sole director of ADDS, Mr Austerberry's position in ADDS was driller and supervisor of ADDS's drill crews. At all material times, ADDS paid Mr Austerberry a wage.

8. At all material times Eastern Star Gas Limited (ACN 094 269 780) (ESG) was a publically listed corporation whose registered office is level 7, 51-57 Pitt Street, Sydney, NSW, 2000 and the holding company for a group of companies, including Eastern Energy Australia Pty Ltd ACN (009 321 662) (EEA), that undertake coal seam gas exploration in NSW. ESG had full operational control over EEA. On or about 17 November 2011, Santos Limited (ACN 007 550 923) acquired the shares in ESG and, as such ESG became a subsidiary of Santos Limited on or about that date. On or about 30 November 2012, ESG changed its name to Santos NSW Pty Ltd.

9. ESG is the holder of Petroleum Assessment Lease 2 (PAL 2) and Petroleum Exploration Licence 238 (PEL 238) which fully incorporates and fully surrounds PAL 2.

10. The land the subject of PAL 2 and PEL 238 is located near Narrabri in NSW.

11. PAL 2 and PEL 238 are "petroleum titles" granted pursuant to the Petroleum (Onshore) Act 1991 (POS Act). ESG was the nominated 'operator' of the titles, pursuant to the Petroleum (Onshore) Regulation 2007 and the Schedule of Onshore Petroleum Exploration and Production Safety Requirements published by the Department of Mineral Resources in August 1992.

12. Pursuant to section 128 of the POS Act the holder of a petroleum title must carry out all petroleum exploration operations and operations for the recovery of petroleum in the title area in accordance with the provisions of the OHS Act.

THE WORKPLACE - THE BOHENA CREEK PROJECT

13. In or about 2009, ESG required gas and water gathering pipelines to be installed on land within PAL 2 for what is known as the Bibblewindi West Production Pilot (Bibblewindi West Project).

14. The installation of the pipelines was part of petroleum exploration operations and/or operations for the recovery of petroleum and consequently was governed by the POS Act and accordingly was a "mining workplace" as defined in section 4 of the OHS Act.

15. ESG applied to and obtained from the Director General of the then Department of Primary Industry approval to construct the pipelines.

16. ESG either directly or via EEA contracted a Queensland based company, Greene Pipeline Services Pty Ltd atf GPO Trust, trading as GD Pipelines (ABN 63 643 583 248) (GD Pipelines) to install, as part of the Bibblewindi West Project, pipelines to either side of Bohena Creek, using standard trenching techniques.

17. ESG determined to complete the pipeline under Bohena Creek utilising HDD.

18. HDD involves drilling a pilot hole using a directional drilling technique that allows control of direction and depth. A drill head is attached to metal rods (known as the "drill string") and guided towards a reception pit. Once the drill string arrives at the reception pit a reaming device is attached and the pilot hole is enlarged as the reaming bit is returned along the path of the pilot hole. Often the pipeline to be installed is dragged behind the reamer attached to a swivel.

19. HDD is common in the coal seam gas, water and electrical services industries.

ADDS CONTRACT

20. In or about mid 2009, EEA (on behalf of ESG) contracted with ADDS to install the pipe under Bohena Creek (Work Site) using HDD, in order to complete the pipeline partially installed by GD Pipelines (Bohena Creek Project).

21. ESG had engaged ADDS on two other similar jobs in early 2009, as a sub-contractor to a company called Adtech FRP Pipelines. These jobs involved the installation of a fibreglass pipeline for ESG from Bibblewindi to Wilga Park (Adtech Jobs).

22. The initial inquiry for the work required for the Bohena Creek Project was made by Brett Langley, Manager Surface Engineering for ESG to Mr Bob Reynolds, General Manager of ADDS.

23. Following a site inspection by Mr Reynolds on 21 April 2009, ADDS provided a quotation to ESG dated 20 July 2009 to install the pipeline using HDD across Bohena Creek for a total cost of $312,827.46 (Quotation). The Quotation stipulated that the:

(a) pipe would be supplied by ESG;

(b) fusion joining and debeading was to be done by ESG;

(c) full site access was to be supplied by ESG; and

(d) water was to be supplied by ESG.

24. The Quotation attached to it ADDS's "Terms & Conditions of Trade".

25. On 21 July 2009 EEA accepted the Quotation by issuing a handwritten purchase Order to ADDS (Purchase Order). The Purchase Order was requested by Erhart Stockhausen, Senior Petroleum Engineer for ESG and signed by Peter Lansom, Executive Director Operations for ESG.

26. Mr Stockhausen sent the Purchase Order by email on 22 July 2009 to Mr Bob Reynolds and Wayne Hunt of ADDS. Mr Stockhausen's email of 22 July 2009 stated:

"Note that all personnel will require an induction at the Narrabri office before entering the forest as conditions on site have changed, and I'm assuming some people won't have the normal ESG induction anyway."

27. ADDS appointed Mr Shayne Austerberry as the supervisor of its drill crew on the Bohena Creek Project. He was the person who had responsibility for making the relevant decisions as to ADDS's acts and omissions at the Work Site.

28. In or about July 2009, ADDS made a verbal agreement with a company known as Applied Soil Technology Pty Limited (ACN 081 885 082) (AST) to provide, at an hourly rate, at the Work Site:

(a) a vacuum tanker which would suck mud out of the borehole to be drilled by ADDS and remove it from the Work Site;

(b) a prime mover to tow the tanker; and

(c) an operator.

29. ADDS had engaged AST on at least seven previous occasions.

30. Mr Courtenay Edwards is and was the sole director of AST. Mr Edwards and his wife, Margaret Edwards are the joint shareholders of AST. The principal business activity of AST is the transportation and injection into the ground of liquid food waste. However, AST also provides vacuum tanker services.

31. In or about July 2009, AST made a verbal agreement with a company known as The Saver Guys Pty Ltd (ACN 125 166 832) (TSG) to assist AST carry out its part of the Bohena Creek Project and in particular:

(a) to provide a prime mover to tow AST's vacuum tanker;

(b) to assist in the removal of mud from the Work Site; and

(c) to provide an operator of the prime mover and AST's vacuum tanker.

32. Mr Bruce Austin, who was 57 years old at the time of the accident, was the sole director and shareholder of TSG. The principal business activity of TSG was the provision of services requiring a prime mover, in particular earthmoving. All work undertaken by TSG at the Work Site, pursuant to the verbal agreement with AST referred to above, was provided by Mr Austin.

33. At all material times, the Work Site was the "place of work" of ESG, ADDS, AST and TSG within the meaning of section 8(2) of the OHS Act.

34. At all material times, the Bohena Creek Project was the "undertaking" of ESG, ADDS, AST and TSG within the meaning of section 8(2) of the OHS Act.

SITE SUPERVISION

35. On 21 July 2009, ESG requested GD Pipelines to provide a site supervisor for the duration of the Bohena Creek Project who would, amongst other things, stay "in regular contact with John Higgins (Site Manager) regarding issues and updates."

36. Mr Dan Roulston, an employee of GD Pipelines was appointed as the site supervisor.

37. ADDS employees, Mr Austerberry, Mr Robert Milne, Mr Ken Anderson and Mr Michael Anderson first arrived at the Work Site on the morning of Wednesday 29 July 2009. They were shown around by Mr Roulston.

38. Mr Bruce Austin first arrived at the Work Site on 30 July 2009. Mr Roulston did not show him around the Work Site.

INDUCTION

39. Mr Austerberry and Mr Milne had received an induction by ESG in January 2009 (in preparation for the Adtech Jobs). ESG regarded that induction as still being current and did not require them to undertake a further induction.

40. Mr Roulston arranged for an induction by ESG for Messrs Michael and Ken Anderson and Mr Bruce Austin. That took place on Friday 31 July 2009, two days after work had commenced at the Work Site. It was provided by ESG's safety officer, Tom Bennett at ESG's Narrabri office.

29 JULY 2009

41. When the ADDS employees arrived at the Work Site on 29 July 2009, the pipeline for the Bohena Creek Project was already welded up and lying on the ground at the Work Site ready to be installed when the ADDS crew arrived. The length of pipeline required to be installed under the creek was between 280 metres and 350 metres.

42. The pipeline was constructed from 200mm high density polyethylene pipeline (DN200 PN8 SDR21 PE100 Metric Pressure Pipe Series 1) manufactured by PPI Corporation Pty Limited.

43. ADDS utilised 29 July 2009 to set up its equipment.

44. The entry and exit holes for the pipeline had already been prepared. ADDS was not advised who had prepared those holes.

45. ADDS used star pickets and orange barrier mesh to create a square fence around each of the pits, each being approximately 4 metres across and two metres from the hole.

30 JULY 2009

46. When Mr Austin arrived at the Work Site on the morning of Thursday 30 July 2009, he set up the vacuum truck near the ADDS drilling equipment.

47. Drilling began for the installation of the water pipe, on the western side of the creek, on Thursday 30 July 2009. On that day:

(a) Mr Robert Milne operated the drilling machine;

(b) Mr Shayne Austerberry guided the drill head using the electronic sounder;

(c) Mr Michael Anderson mixed the drilling mud (to create the lubricant) and put it into the reservoir that that ran into the drilling machine;

(d) Mr Ken Anderson kept the bore logs (containing the measurements of depth, distance and the alignment of the drill);

(e) Mr Dan Roulston provided a 3 km water line and regularly refuelled the pump to supply water for drilling and periodically checked on what was happening at the site;

(f) there was no work for the vacuum truck so Mr Bruce Austin helped with the mud mixing and site clean-up.

48. By the end of Thursday 30 July 2009 the pilot hole beneath the creek had been completed.

31 JULY 2009

49. On Friday morning, the ADDS employees, on the eastern side of Bohena Creek, attached a reamer to the drill string (also known as drill rods) using an adaptor. A swivel, shackles and a pipecap was attached the pipeline. ADDS then began reaming the hole and simultaneously pulling in the pipeline.

50. Sometime between 12:00pm and 3.00pm Mr Robert Milne, who was on the western side of the creek and who was pulling out the drill rods with the reamer and pipe attached, noticed the pipeline had become stuck and was no longer being pulled through the borehole.

51. After Mr Robert Milne recovered the remaining drill rods from the borehole, which measured around 120 metres, it was discovered that the reamer was no longer attached to them. He observed that the thread adaptor from the drill rods to the reamer had failed. It appeared that the reamer was still attached to the pipe under the ground.

RETRIEVAL PROCEDURES

52. The ADDS personnel together with Mr Roulston and Mr Bruce Austin participated in a meeting on 31 July 2009. They discussed the problem and possible solutions, including leaving the pipeline and reamer in the ground and starting again and attempting to retrieve it.

53. ADDS decided, following that discussion, and with the agreement of those in that meeting, to try and pull the pipeline out from under the ground (the First Retrieval Procedure). By doing this the reamer may have been retrieved. The reamer was owned by ADDS.

54. Initially the First Retrieval Procedure was performed by attaching a sling to the end of the pipeline, then attaching that sling to the backhoe (which was owned by GD Pipelines) with a chain. Mr Roulston drove the backhoe and reversed in an attempt to pull the pipeline out Later the sling, with the pipeline attached, was attached to a WesTrac Caterpillar 320C hydraulic excavator which was driven in reverse by Mr Austerberry.

55. In an interview conducted by Inspector Paul Raftery on 14 October 2009 Mr Ken Anderson stated that he spoke to Mr Austin during the First Retrieval Procedure and told Mr Austin to stand with him, some 10-15 metres away from the entrance of the drill hole, saying to Mr Austin that if the pipe broke while it was being pulled it could fling out of the hole and anything could happen. Mr Roulston said that when the First Retrieval Procedure was undertaken he was standing in the bush at what he thought was considered a safe distance.

56. This First Retrieval Procedure was attempted about 6 times on 31 July 2009. On each attempt the pipe collapsed where it had been tied causing the sling to come off. Each time it failed gently, with no recoil. Ultimately the outer sheath of the sling failed. The First Retrieval Procedure was then abandoned.

57. The work team at the Work Site then met again and discussed what further steps might be taken. A decision was taken that an attempt ought be made to try and excavate the pipe and reamer from the creek (the Attempted Excavation).

58. Mr Austerberry then drove the WesTrac Caterpillar 320C hydraulic excavator (excavator) to the middle of the creek, to a position where, based on the number of drill rods that had been recovered, the ADDS crew suspected the reamer and front end of the pipe were located, and began to dig, with the objective being to dig up the reamer and disconnect it from the pipeline, which would make pulling the pipeline back out easier. While Mr Austerberry was undertaking the Attempted Excavation, sand and water flowed back into the hole making the process difficult. Some drilling mud was found, but not the pipeline. As it was getting dark it was decided to back-fill the hole and try again on the next day, Saturday. The work crew, including Mr Austin, left the site at around 4.30pm - 5.30pm.

1 AUGUST 2009

59. On the morning of Saturday 1 August 2009 Messrs Ken and Michael Anderson left Narrabri to return home.

60. Messrs Austerberry, Milne, Roulston and Austin returned to the Work Site to attempt to recover the pipeline and reamer.

61. A small pipe of about 110mm diameter was placed inside the 200mm pipeline already under the creek using a sling and a backhoe. The small pipe had a beacon inside it, so its position could be detected from the creek surface. Once the beacon had been pushed to what was believed to be the end of the pipeline digging in the creek began, with Mr Austerberry and later Mr Bruce Austin, operating the excavator.

62. The attempt to dig up the reamer was unsuccessful and at around 1.30pm - 2.30pm on 1 August 2009, attempts to dig up the reamer and pipeline were abandoned.

63. Mr Austerberry then decided they should have a further attempt at pulling the pipeline out from under the ground (the Activity).

64. Mr Austin drove the excavator over to the eastern side of the creek so the Activity could begin. Meanwhile Mr Roulston commenced back filling the hole in the creek using GD Pipeline's backhoe.

65. Before the Activity commenced on Saturday 1 August 2009 a toolbox talk was held during which Mr Austerberry said "everybody's got to keep out the bloody road." There are no documents recording this tool box talk.

66. ADDS did not have any documented safe work procedure method, job safety analysis or risk assessment for the Activity.

67. One side of the orange bunting, being that across the front of the entry pit from which the pipeline protruded, was pulled down before the Activity commenced so that the bunting did not get in the way.

68. Using a 10 millimetre, two legged chain that was on-site to be used to lift the drill rods onto the truck used to transport them, Mr Robert Milne tied one leg of the chain in a clove hitch knot around the pipe and placed the other leg of the chains around a bucket tooth on the excavator and choke hitched it back over the chain.

69. The chain was a lifting chain and should not have been used to pull the pipeline. The chain had a breaking strength less than the pulling power of the excavator.

70. Mr Bruce Austin then started operating the excavator for the retrieval process, approximately 2 - 4 metres from the end of the pit. He moved the arm and bucket of the excavator, the pipe may have moved a little bit and then the chain broke. The other leg of the chain was then attached as before by Mr Milne. The pipe was again pulled. It moved about a metre before shearing off the pipe. The chain was reattached one or more times but sheared off the pipe each time.

71. Mr Austin then suggested placing a piece of wood inside the pipe to prevent the pipe crushing and shearing. This was done by Mr Milne, using a chainsaw to cut a suitably sized piece of wood and then placing the wood inside the pipe to stop the pipe collapsing while it was being pulled. This was not a procedure that ADDS had ever used before. It was successful in stopping the pipe shearing and the pipe started to move as Mr Austin drove the excavator backwards.

72. After about 35 metres of pipe had been extracted, Mr Milne suggested Mr Austerberry take over driving the excavator as Mr Austin was having difficulty going in a straight line whilst reversing.

73. When Mr Austerberry then took over the excavator, he told Mr Austin to go and sit on a log about 17m from the pipeline. He pointed to a tree stump or log behind the tree line, where they had been sitting earlier in the day. He said to him, words to the effect "Keep out of the road and go and sit down there" " and continued pointing to the tree stump or log.

74. Mr Austerberry and Mr Milne both observed Mr Austin heading in the direction of the log or tree stump, but neither observed him reach the designated point. No one watched him to ensure that he stayed at the designated point.

75. Mr Austerberry reversed the excavator whilst being directed by Mr Milne. Mr Milne was watching the movement of the excavator and did not turn around to look at the progress of the pipe out of the pit or to observe what Mr Austin was doing.

76. Initially Mr Austerberry looked straight down at the pipeline. He then, turned around (away from the pit) to see where he was going.

77. At a distance of about 145 metres from the entry pit, at approximately 3.45pm, the chain broke (for the second time that day) and the pipeline recoiled.

78. Mr Austerberry and Mr Milne retrieved the broken chain set and walked back towards the entry pit, with the intention of cutting the pipe and re-pulling whatever remained. They looked over to the tree stump or log to see what Mr Austin was doing but he was not there.

79. They called to Mr Austin and received no reply. A short time later Mr Milne found Mr Austin lying on the ground adjacent to the entry pit and inside the orange bunting around the pit, with his head facing a southerly direction, right up against the barricade.

80. Mr Austerberry gave Mr Austin first aid. Mr Milne called for an ambulance.

81. The ambulance officers treated Mr Austin at the site before transporting him to the highway, arriving about 5.20pm. He was then transferred to a helicopter ambulance, but due to difficulty stabilising Mr Austin the helicopter did not leave the scene until 6.35pm. It proceeded to Tamworth Hospital, arriving at approximately 7.15pm. He was subsequently transferred to John Hunter Hospital in Newcastle, arriving there at around 4.50am. On 4 August 2009 it was found that there was negligible neurological recovery and after the ventilator was removed, he died from his injuries around 5.30pm.

82. The autopsy found that the direct cause of death was a closed head injury. Mr Austin had suffered a cerebral haemorrhage, haemorrhage around the upper spinal cord, a broken jaw, an injury and laceration involving the left earlobe and a bruised scalp.

83. Video and photos of the scene taken after the accident show that the pipeline had come to rest in a wide arc over seven metres away from the pit. There was a spot on the bowed pipeline which has been wiped clean of some mud. This part of the pipe was tested and Mr Austin's DNA was found.

84. Mr Austin's death was caused by him being hit in the head by the pipeline as it recoiled following the failure of the chain being used to pull it from the ground.

RISK ASSESSMENTS

85. In relation to the retrieval procedures of the kind undertaken on this occasion:

(a) Mr Austerberry had performed the procedure over a dozen times in his career without incident or injury;

(b) Mr Robert Milne had been involved in the procedure on a number of occasions;

(c) Mr Michael Anderson had seen the procedure performed once in Darwin.

86. ADDS, Mr Roulston and Mr Bruce Austin participated in the discussions/ tool box talks in relation to the First Retrieval Procedure, the Attempted Excavation and the Activity in which the procedure, and the requirement to stay well away was specifically discussed. There are no written records of these discussions/ tool box talks.

87. None one from ADDS, Mr Roulston nor Mr Austin informed ESG about the retrieval procedures including the Activity prior to that conduct taking place.

CONTRAVENTION OF OHS ACT

88. ADDS, by its acts and omissions set out below, failed to ensure that people, other than employees of ADDS, in particular Mr Bruce Austin, were not exposed to risks to their health or safety arising from the conduct of ADDS's undertaking while they were at ADDS's place of work, specifically to the risk of being struck by a recoiling polyethylene pipeline.

Particular 2 - ADDS should not have attempted to pull the pipeline out of the ground

89. ADDS undertook the Activity when the pipeline became stuck, instead of leaving that pipeline underground, drilling a new hole and installing another line of pipe.

90. It is not uncommon for a pipeline to become stuck while being pulled into a drilled hole using HDD techniques, the causes of which are many and various. The cause of the pipeline at the Work Site becoming stuck has not been determined, but the primary theory is that the ground conditions changed causing what is known as a 'hydraulic lock'.

91. When a polyethylene pipeline of 200mm diameter is pulled in circumstances where one end is underground and becomes stuck, for instance due to hydraulic lock, then, as the pipeline is pulled it stretches and energy builds in the pipeline, such that if the end being pulled is released the pipeline will recoil along its length and as it recoils it will move. This phenomenon was known to both Mr Austerberry and Mr Milne of ADDS as at 1 August 2009.

92. A polyethylene pipeline of 200mm diameter is a hard and heavy object, in the manner of a solid plastic. During recoil, because of its weight and momentum, there is a risk of injury to any person struck by the pipeline.

93. Prior to the accident occurring, as noted above, attempts to pull the pipeline out of the ground had resulted in the pipeline collapsing, the outer sheath of a sling failing and the chain being used to the pull the pipeline breaking. In the circumstances it was readily foreseeable to ADDS employees, including Mr Austerberry, that the chain might break again. If it broke it was readily foreseeable that the pipe would recoil, creating a risk of injury to any person who might be struck by the recoiling pipe.

94. ADDS acknowledges that, in the circumstances that prevailed, when the pipeline became stuck it ought not have attempted the Activity. It ought to have decided to abandon the pipeline underground, drill a new hole and install another line of pipe.

Particular 3 - ADDS failed to conduct and record a Risk Assessment

95. According to Mr Ken Anderson upon arrival at the Bohena Creek Site, ADDS did a job safety analysis . However, there are no accounts or documentary records of a job safety analysis or risk assessment being performed in relation to the Bohena Creek Project or the Activity.

96. ADDS conducted several discussions/toolbox talks when the pipeline became stuck, however there are no documentary records of these meetings.

97. The discussions/toolbox talks involved discussions of possible solutions to deal with the pipeline which had become stuck. This included leaving the pipeline and reamer in the ground and starting again as well as the retrieval procedures and the attempted excavation. The talks also included words to the effect "keep out of the bloody road".

98. However, ADDS failed to take any adequate steps to identify the risks associated with the Activity before it proceeded and in particular ADDS:

(a) failed, before conducting the Activity, to conduct an adequate risk assessment; and

(b) failed, before conducting the Activity, to record a risk assessment of the Activity.

Particular 4 - ADDS failed to determine and communicate a Safe Work Method

99. ADDS convened and participated in the discussions/ tool box talks. However, ADDS did not devise a documented safe work method for the Activity.

100. At the time of the accident ADDS had approximately 42 documented Safe Work Method Procedures (SWP), but none covered the Activity.

101. ADDS had a documented "Company Health & Safety Plan" (Safety Plan). Amongst other things, it required new employees and contractors to complete an ADDS induction programme.

102. In relation to an induction/training for Mr Bruce Austin for work at the Work Site:

(a) ADDS did not conduct an induction, and had never inducted Mr Bruce Austin for work with ADDS, however ADDS had contracted directly with TSG on at least seven prior occasions and Mr Austerberry had worked with Mr Bruce Austin on approximately 25 prior occasions (which included the 7 occasions where there was a direct contract between TSG and ADDS);

(b) there is no evidence of any induction by TSG;

(c) there is no evidence of any induction by AST;

103. Mr Ralston (GD Pipelines) arranged for Mr Bruce Austin to undertake an induction on 31 July 2009 with ESG's safety officer, Tom Bennett at ESG's Narrabri office.

104. ADDS Safety Plan required pre-operational toolbox meetings, to conduct on-site hazard assessments and the implementation of hazard controls and complete hazard assessment and control forms. There are no documentary records in relation to these matters.

105. In the circumstances, directions to "stay out of the bloody road" did not constitute an adequate safe work method for the Activity.

106. ADDS failed to take any or any adequate steps to determine a safe work method for the Activity and communicate that method to Mr Bruce Austin at the Work Site before it proceeded with the Activity, in particular ADDS:

(a) failed to devise a safe work method for the Activity;

(b) failed to document a safe work method for the Activity;

(c) failed to give any or any adequate information or instruction to Mr Bruce Austin at the Work Site as to a safe work method to conduct the Activity.

Particular 5 - ADDS failed to establish and supervise an Exclusion Area

107. ADDS failed to ensure that Mr Bruce Austin would not be in a position where he could be struck by the polyethylene pipeline recoiling, when undertaking the Activity, ADDS:

(a) failed to establish an exclusion zone, being an area where no person was to enter lest they be struck by the pipeline recoiling (the exclusion area);

(b) failed to give any adequate information to Mr Bruce Austin as to the danger of standing within the exclusion area;

(c) failed to give any adequate instructions to Mr Bruce Austin requiring him to remain outside the exclusion area;

(d) failed to erect a barrier, such as fencing or bunting, to mark out the boundary of the exclusion area;

(e) failed to supervise Mr Bruce Austin to ensure he did not enter the exclusion area; and

(f) failed to check that Mr Bruce Austin was outside the exclusion area before engaging in the Activity.

108. The risk to Mr Bruce Austin arose because he was standing in an area where he could be struck by the pipeline if it recoiled.

109. ADDS could have taken steps to reduce or remove that risk by taking the steps set out at paragraph 105.

Particular 6 - ADDS Failed to Cease the Activity after the first attempt failed

110. ADDS failed to cease the Activity, or assess the safety of the Activity, once a chain being used to pull the pipeline broke for the first time on 1 August 2009.

111. Once the chain broke for the first time it was foreseeable that it could break again at a time when more pipe was exposed when there would be a corresponding increased risk of recoil.

112. ADDS could have taken steps to reduce or remove that risk of injury to Mr Bruce Austin by stopping the Activity after the chain first broke.

Particular 7 - ADDS failed to take steps to prevent the pipeline recoiling

113. ADDS failed to take steps, which would have reduced or removed the risk of injury to Mr Bruce Austin by preventing the pipeline recoiling, including:

(a) undertaken an analysis of the pulling-power of the excavator being used to pull the pipeline and the break-strength of the pipeline and of the chain connecting the pipeline to the excavator to identify the risk that the pipeline or the chain might fail;

(b) utilising equipment to pull the pipeline out from the ground that had less pulling power than the break-point of the pipeline and of whatever was used to connect the pipeline to that machine;

(c) utilising equipment appropriate for the task, in particular slings rather than chains and a pulling head or pipecap attached to the end of the pipeline;

(d) pulling the pipeline out in short sections and then cutting it, or by pulling a section and then re-positioning the sling to a position close to the exit pit.

114. If the pulling power of the machine being used to pull the pipeline from the ground had been less than the break-point of the pipeline and of whatever was used to connect the pipeline to that machine then the risk of the pipe or the connection failing and the pipe recoiling would have been reduced or removed.

115. If equipment appropriate to the task, in particular slings and a pulling head or pipecap, had been used the risk of the connection failing would have been reduced.

116. If the pipeline had been pulled out in short sections, by pulling a section and then cutting it, or by pulling a section and then re-positioning the sling to a position close to the exit pit, then the amount of pipeline exposed above ground under pressure would have been reduced, and accordingly the amount of recoil if the pipeline or connection failed would have been reduced.

18 Mr Taylor also tendered what was described as the Prosecutor's Tender Bundle. It contained the following documents:

1. 2 videos: Schematic video of horizontal directional drilling together with NSW Police video of Petroleum Assessment Lease 2 ("PAL 2") incident scene which were played during the proceedings.

2. 20 colour photographs taken by Inspector Steve Millington, Dan Roulston and Mr Tom Bennett showing the site, the pipe, the reamer, the pit area, the log and surrounding bush.

3. PAL 2 Plan and Locality Plan of the incident.

4. Amended survey plans Bibblewindi West Lateral Pilot Project ("PWL") Petroleum Exploration Licence 238 ("PEL 238"), Bohena Creek pipeline crossing.

5. Austerberry Directional Drilling Services Quotation for Directional Drilling dated 20 July 2009.

6. Eastern Star Gas Eastern Energy Australia Purchase Order dated 21 July 2009.

7. Email from Eastern Star Gas to Austerberry Directional Drilling Services attaching Purchase Order dated 22 July 2009.

8. Email from Eastern Star Gas to G D Pipelines dated 21 July 2009.

Defendant's evidence

19 Ms K Nomchong of senior counsel who appeared for the defendant, read an affidavit of Mr Austerberry, the sole director of the defendant who is currently 52 years of age.

20 Mr Austerberry set out his personal background and his professional experience which included working in the directional drilling industry in various roles for approximately 30 years. Prior to setting up the defendant, he was a partner in another company known as Mudix Austerberry Pty Ltd, which undertook horizontal directional drilling. He stated that during his time in the industry, he had always made it his duty to endeavour to fully consider the potential risks to safety that may be associated with any task that was being carried out by the defendant, or its predecessor. He stated that he had endeavoured to eliminate risks to safety to himself and his work colleagues to the best of his ability. He approaches tasks that give rise to potential safety risks by discussing them with work colleagues and not relying solely on his own personal experience.

21 Mr Austerberry stated that the incident on 1 August 2009 was the first incident he had been involved in where there was a breach of safety, since he has been working in the horizontal directional drilling industry.

22 He set out the defendant's business organisation and the roles held by various employees including Mr Bob Reynolds who was employed as the General Manager and Business Development Manager of the defendant. His responsibilities included the development and implementation of occupational health and safety policies, safe work method statements ("SWMSs") and job safety analysis documentation. Mr Reynolds had the day-to-day management of the defendant.

23 Mr Austerberry was employed as the Crew Supervisor, with his main role being in relation to the supervision of the actual drilling work. By July 2009, the defendant ran three drilling crews at any one time and was very busy.

24 As at August 2009, the defendant had developed a wide-ranging system of occupational health and safety policies and protocols. Mr Austerberry had delegated Mr Reynolds this task because of his high level of expertise and experience in the horizontal directional drilling industry.

25 The defendant had, as its usual practice, as at 2009, "a job pack" prepared that went to each person on a work site. This pack included but was not limited to the following documents:

(a) Job Safety Analysis form. A copy of the relevant template was annexed. It was the defendant's policy to fill these out prior to each job and also at the start of each day (to deal with changing circumstances overnight on a work site).

(b) Safe Work Method Statements relevant to that job. A copy of the SWMS most relevant to the retrieval process was annexed but it does not specifically address the Activity as described in the ASF.

(c) Toolbox talk forms. A copy of the template form was annexed. The purpose of the toolbox talks is so that everyone clearly understands what needs to be done, what their role is and what the particular safety issues are on that day and specific to that job.

(d) Site Safety Rules, a copy of which was annexed.

26 Mr Austerberry's evidence was that he relied on Mr Reynolds in relation to the preparation of "the pack" for the Bohena Creek Project. However, although the template documents were in existence, no "pack" was distributed to the defendant's employees on the site prior to the commencement of the job. Nor was the Site Safety Rules document completed until after the Incident and although toolbox talks took place as set out in the ASF, the forms for the toolbox talks were not completed.

27 Shortly after the incident on 1 August 2009, the following documents were added to the "job pack":

(a) Safe Work Method Procedure Master List. This document set out 42 risks associated with asbestos, chemicals, design, electrical hazards, and mechanical aids. A copy of the document was annexed to the affidavit;

(b) copies of all SWMSs relevant to a job were also prepared together with a Job Safety Check List. The defendant also has procedures and plans relating to environmental control;

(c) copies of the defendant's Safety Health and Environmental Policy Statement and the defendant's compliance with relevant standards dated 19 February 2010 was also annexed to the affidavit;

(d) also annexed was, what was described as the "NCS International certificate of compliance with AS/NZS 4801:2001" and "AS/NZS ISO 9001:2008" for the defendant. The scope of the certificate was in respect of a civil engineering contractor specialising in the installation of underground utility services by the defendant. The certificate was issued on 2 September 2010 and expires on 2 September 2013.

28 Mr Austerberry also annexed a Certificate of Registration received from the Asia Pacific Utilities Group Supplier Management System which was valid until 13 August 2010.

29 In order for the defendant to attain each of these certificates, it was required to undergo an audit and compliance procedure.

30 Mr Austerberry stated that he had performed retrieval procedures of the kind that was undertaken on 1 August 2009 on about 12 previous occasions over a period of 26 years that he had been working in the industry. These were rare incidents and on each occasion that he had utilised the retrieval procedure, it had been successful and without any safety incident whatsoever.

31 The only explanation he could offer as to why the defendant had not developed a safe work method for the retrieval procedure was that it occurred so rarely.

32 His evidence was that while he appreciated the need to have all the correct paperwork, from his experience in the horizontal directional drilling industry, he had formed the view that it was important to verbally communicate safety issues to employees and others at the worksite. In his experience, most of the men who worked on construction sites do not do a lot of reading and it was for this reason that he had always regarded toolbox talks and workplace discussions as better methods of making sure that everyone understood what the procedure was, how it was to be carried out, who was doing what and what safety issues arose.

33 His practice when on site was to conduct toolbox talks each morning in respect of the Bohena Creek Project. Drawings and Dial Before You Dig ("DBYD") surveys were issued to the site. All crew had Green Card Training and appropriate licences.

34 Mr Austerberry stated that when he attended the site on 30 July 2009, he approached the task as he always had done by having discussions with those on site concerning the job, the procedures, the allocation of tasks and the usual safety aspects that the defendant discussed on jobs of this kind with those on site. He said a walk around of the site was conducted while discussing the nature of the job, who would be doing what and the usual safety issues.

35 At this time, as there had been no consideration that the pipe might become stuck, there was no discussion about what procedure would be utilised should this occur.

36 The defendant had four employees at the site, with Mr Roulston, the Site Supervisor, and Mr Austin, employed by TSG. An induction occurred on 31 July 2009 in Narrabri for those employees who had not performed similar work earlier in the year and undertaken an induction. Mr Austin performed the induction.

37 After the pipeline became stuck, Mr Austerberry stated that he approached the task of extracting it in the same way as he had on every prior occasion. He did that by making careful observations, engaging his work colleagues including Mr Austin, in forming a strategy about the work process and then providing clear directions to all workers including Mr Austin at the site on how to complete the task.

38 All employees on the site were experienced. He stated that when the decision was made to extract the pipe (attaching a sling to the backhoe and then to the pipeline), in his mind, he identified the risk of recoil of the pipeline if it broke.

39 Mr Austerberry referred to paragraph 97 of the ASF which referred to the discussions and toolbox talks in respect of the possible solutions to deal with the pipeline that had become stuck and that the talks included words to the effect "keep out of the bloody road".

40 He stated from his observations during the afternoon of 31 July 2009 when attempts were made to extract the pipeline, and on the morning of 1 August 2009 was "each time the excavator/ backhoe was operated and hooked up to the pipeline, everyone walked well away from the road, into the bush."

41 Mr Austerberry stated that when Mr Austin was operating the excavator on the morning of 1 August 2009, he waited until he and another employee of the defendant, Mr Robbie Milne, had walked about 30m away to a place behind the tree line. Mr Austin then gave the thumbs up sign and commenced driving the excavator. This indicated to Mr Austerberry that was aware of the need for others to be out of the way during the retrieval process.

42 When the retrieval process was unsuccessful on 31 July 2009, all those on site again discussed what could be done. Mr Austerberry's evidence was that it was agreed to excavate the pipe and reamer directly by excavating the bottom of the creek bed. His evidence was that he said, and he also heard others say the same, "to stay well away" from the excavation site because of the danger of being drawn into the hole in the muddy shallow waters of the creek. He said that everyone including Mr Austin followed this direction. During dinner that evening, there were further discussions about the procedure, which included Mr Austin.

43 On 1 August 2009, Mr Austerberry conducted another toolbox talk as reflected in paragraph 97 of the ASF. The toolbox talk was not documented. However, he said he formed the view that all employees on site understood the necessity to remain clear while extraction was being attempted.

44 As at 1 August 2009, Mr Austerberry had known Mr Austin for over 5 years and worked with him on about 25 jobs. He had developed a sense of trust in the professional approach that Mr Austin undertook in respect of his duties and especially in matters of safety. He did not have any prior experience of him not doing what Mr Austerberry told him to do.

45 Mr Austerberry stated that on 1 August 2009, when he told Mr Austin to go over and sit at the stump where he had had a smoko that morning, he had no reason to believe he would not comply with that direction. He specifically chose the tree stump as a safe place because it was well behind the tree line, having assessed that if the pipeline broke and recoiled, its flight would be broken by the tree line, leaving Mr Austin safe.

46 At the time when Mr Austerberry saw Mr Austin walking to the stump, before he commenced to reverse the excavator, Mr Austin was behind the tree line. He stated it was approximately 6m to the tree line and a further 11m or so to the tree stump, as confirmed by the investigators' survey. When Mr Austin was found after the incident, he was about 50m or 60m from the stump. At no time after Mr Austerberry told Mr Austin to sit on the tree stump did he see him walk away from the stump towards the pit. He stated that if he had he would have stopped operations immediately until he was back in a safe area.

47 Mr Austerberry first became aware of what had happened to Mr Austin when he walked back towards the entry pit with Mr Milne after the chain broke for the second time that day. He told Mr Milne "Ring 000! Quick get 000!"

48 Mr Milne then ran up to the highway to wait for the arrival of the ambulance. Mr Austerberry sat with Mr Austin for about 30 minutes, holding his hand, patting his back and talking to him. He called 000 on two further occasions to ask whether an air ambulance was coming.

49 Mr Austerberry, his wife, Mr Milne and Mr Reynolds attended the funeral and offered their condolences to the family. He contacted Mrs Austin and her daughter again about a month after the accident. They wanted to know how the accident happened and Mr Austerberry explained to them what he knew on behalf of the defendant and himself. He expressed his deepest sympathy. He offered to help in any way he could and asked Mrs Austin to contact him. However, Mrs Austin did not contact him again.

50 On behalf of the defendant, Mr Austerberry expressed its most sincere remorse for the death of Mr Austin.

51 Mr Austerberry stated that the incident had a significant impact on him personally. He used to experience vivid and disturbing memories of the day of the Incident quite frequently. This still happens, although less frequently than back in 2009 and 2010. His sadness is worsened by the fact that he knew Mr Austin personally and he was a "good bloke".

52 As a director of the defendant, he stated that he replays the events leading up to and following the Incident in his head. He analyses and assesses how he went about the retrieval task and what he should have done to prevent the accident from occurring.

53 After the incident, the contract with GD Pipelines was terminated and the defendant did not return to the site. Mr Austerberry stated that the damage to the corporate reputation of the defendant was dramatic. Work dropped off dramatically and within 12 months the defendant had only one gang working. Regular customers stopped contracting with defendant and the jobs that were offered were, in his estimation, low paid or difficult jobs that no one else wanted.

54 About 6 months after the incident Mr Reynolds resigned. Ms Karen Robinson who was employed as the Administration Manager also resigned owing money to the defendant. The defendant was forced to terminate the employment of other regular employees because of the downturn in work.

55 After the Incident, the defendant developed a specific SWMS for the retrieval procedure. A copy was annexed to the affidavit. In addition, the defendant developed a protocol that required all ground-engaging tools to be crack tested in order to identify any weakness or faults prior to drilling.

56 Mr Austerberry stated that the defendant had been a good community corporate citizen. It is also a member of the Hunter Business Chamber. While the defendant tended to concentrate on its work, it supported community measures such as:

(a) regular donations (about $5000 per year) to the "Blue Light Disco" run by the Police Service in Newcastle;

(b) sponsorship of a local hockey club in Newcastle;

(c) donations of $2,500 per year to the Variety Club for fundraising for cancer research; and

(d) other charitable donations the details which he could not now remember.

Relevant principles

57 The Full Bench in Morrison v Coal Operations Australia Ltd (No 2) [2005] NSWIRComm 96; (2005) 141 IR 465 succinctly summarised the principles to be applied in determining sentence for an offence under the OHS Act. Their Honours stated at [8] - [15]:

[8] The overall approach to be followed in relation to the determination of sentence is to be found in the first instance within the statutory provisions of the Crimes (Sentencing Procedure) Act 1999 and in particular, in relation to these proceedings, ss 3A Purposes of Sentencing and 21A Aggravating, mitigating and other factors in sentencing.

[9] In R v Way (2004) 60 NSWLR 168 it was emphasised that the provisions of the Crimes (Sentencing Procedure) Act referred to above are not to be construed as representing "a departure from settled principles of sentencing practice, or an abandonment of the discretion that is essential to any system calling for individualised justice". As was said at [59]:

'[I]t is clear that the legislative policy ... so far as that can be discerned from the legislation itself, was not to create a straight jacket for judges ... but rather [was] intended to provide "further guidance and structure to judicial discretion.'

[10] The starting point for consideration as to penalty is the objective seriousness of the offence. That is a well established sentencing principle and was conclusively affirmed in the Full Bench decision in Lawrenson Diecasting Pty Ltd v WorkCover Authority (NSW) (1999) 90 IR 464 at 474 as follows:

'[I]t is important to reiterate that the primary factor to be considered when a judicial officer is determining the appropriate sentence to impose is the objective seriousness of the offence charged. In case of prosecutions under the OH&S Act, this proposition has often been expressed by saying that the "true measure of penalty lies in the nature and quality of the offence" ...

[11] The principle of foreseeability as a factor in determining the objective seriousness of an offence as part of the sentencing process was considered in the Full Bench decision in Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) ("Capral") 49 NSWLR 610 at 646; 99 IR 29 at 62 as follows:

'The question of foreseeability is relevant to the assessment of the seriousness of the offence. We consider that the appropriate approach is that of Walton J, Vice President, in Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27:

Whilst the reasonable foreseeability of an accident may not be relevant to the question of liability under the Act (see Drake Personnel Ltd t/a Drake Industrial v WorkCover Authority of New South Wales (Inspector Ch'ng) (1999) 90 IR 432), the degree of foreseeability is a significant factor to be taken into account when assessing the level of culpability of the defendant. The existence of a reasonably foreseeable risk to safety which is likely to result in serious injury or death is a factor which will be relevant to the assessment of the gravity of the offence.'

[12] On the issue of foreseeability, the Full Bench in Capral also stated at 646; 62 - 63:

'The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being more serious in nature. However, the absence of foreseeability does not necessarily render the offence as being nominal or not serious. In this regard the relevant approach is that set out in the judgment of Wright J, President, in Ferguson v Nelmac Pty Ltd [1999] 92 IR 188 (at 209 - 210) in these terms:

'... reliance on "hindsight" must be seen in an appropriate perspective in terms of culpability. It is a relevant consideration but the very terms of s 15 impose an obligation on an employer which is not confined to the taking of precautions only when there are warnings or signals of danger or when experience indicates that a risk to safety has arisen and requires remedy. So much is clear from the structure and language of the section which is premised on the requirement to 'ensure ... health, safety and welfare at work' and the decided cases which make plain the nature of the obligation.'

[13] It is also necessary to consider the damage and injury suffered in the context of the evidence and "in light of the principles which have been laid down in relation to the relationship between the seriousness of injuries which have been suffered, or which may have been suffered, and the gravity of the offence" (Capral at 650; 66). On that point the Full Bench in Capral stated:

'We consider that the relevant principle can be stated in this way. The gravity of the consequences of an accident, such as the damage or injury, does not, of itself, dictate the seriousness of the offence or the amount of penalty. However, a breach where there was every prospect of serious consequences might be assessed on a different basis to a breach unlikely to have such consequences. The occurrence of death or serious injury may manifest the degree of seriousness of the relevant detriment to safety: Tyler v Sydney Electricity (1993) 47 IR 1 at 5, Inspector Hannah v Wonar Pty Ltd (1992) 34 AILR 377 at 378, Watson v Southern Asphalters Pty Ltd (1996) 83 IR 446 at 456, Wong v Melinda Group Pty Ltd (1998) 82 IR 118 at 131, WorkCover Authority of New South Wales v Albury City Council (1999) 90 IR 397 at 408 - 409, Lawrenson Diecasting Pty Ltd (at 476), WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Ltd (at 428) and WorkCover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) (at [22]).'

[14] The principles of general and specific deterrence are also relevant in sentencing. The approach to be taken on that issue was also dealt with in some detail in Capral at 643 - 645; 59 - 62. Without detailing all that the Full Bench had to say we consider the approach to deterrence in the sentencing process is encapsulated in the following passage from the Full Bench in Capral at 644; 60 as follows:

'[B]oth aspects of deterrence are matters which should normally be given weight of some substance in the sentencing process; and although there may be exceptional cases (see, for example, Workcover Authority (NSW) v Walco Hoist Rentals Pty Ltd (No 2) [2000] NSWIRComm 39; (2000) 99 IR 163 at [40]- 43]) we would expect such cases to be very rare, and where the relevant circumstances were held by the sentencing judge to be established, the judge must indicate with some precision the circumstances which had led to the exceptional course being adopted.'

[15] In the context of the above well established sentencing principles it will also be necessary to have regard to those general matters going to aggravation, mitigation and other factors identified in s 21A of the Crimes (Sentencing Procedure) Act relevant to the respondents before the Full Bench. As was said in R v Way at [56]:

'[I]t is not to be overlooked that there is a well established body of principles that have been developed by the courts over a long period of time. By providing guidance in the form of a list of aggravating and mitigating factors in s 21A, the Parliament did not intend to overrule or disturb those principles or restrict their application. In so far as those principles refer to factors, whether objective or subjective, that affect the "relative seriousness" of the offence, they are expressly preserved by s 21A(1)(c).'

Consideration

58 Senior counsel agreed that the primary consideration, as set out in the above principle, requires a determination of the objective seriousness of the offence. This involves examining the nature and quality of the offence as set out in the ASF and the evidence.

59 As the ASF discloses, the defendant was involved in the retrieval of a pipeline that had been installed at the work site using a process called "horizontal directional drilling". The retrieval of the pipe was necessary because it became stuck and was no longer being pulled through the bore hole.

60 The ASF demonstrates at [63] - [84] that the fatal injury to Mr Austin arose as a consequence of being struck by a polyethylene pipeline which recoiled when a chain was being used to tie the pipeline to the bucket of an excavator which was in turn being used to pull the pipeline out of the ground when the chain broke. While nobody witnessed Mr Austin being hit by the pipeline, he was found unconscious a short time after the chain broke, lying on the ground adjacent to the entry pit and inside the orange bunting around the pit.

61 Mr Austerberry had previously carried out the retrieval of a pipe which was stuck underground on at least 12 occasions over a period of 26 years and was aware that this activity gave rise to a serious risk of injury arising from a recoil of the pipe. The retrieval procedure had been attempted at least six times on 31 July 2009 and had failed. A decision was made to use a Caterpillar hydraulic excavator to pull the pipeline using a 10mm chain that was on site for the purpose of being used to lift drill rods and not the retrieval of the pipe.

62 Notwithstanding these facts, the defendant did not have any documented safe work procedure method, job safety analysis or risk assessment for the retrieval procedure. Nor did the defendant provide adequate verbal instruction(s) as to the risks associated with the retrieval procedure and method to avoid them.

63 The first failure by the defendant which gave rise to the risk to the health and safety of Mr Austin and other persons was to ensure that no person could be struck by the polyethylene pipeline recoiling, as the pipe was being pulled from underground, if the chain attached to the excavator broke for the second time. After the chain broke on the first occasion, the defendant should have ceased the activity or paused to assess the safety of the activity and undertake a proper risk assessment.

64 The second failure by the defendant was to take adequate steps to:

(i) establish an exclusion zone, being an area where no person was to enter lest they be struck by the pipeline recoiling (the exclusion zone area);

(ii) give any, or any adequate information to Mr Austin as to the danger of standing within the exclusion zone area;

(iii) give any, or any adequate instructions to Mr Austin requiring him to remain outside enter the exclusion zone area;

(iv) to erect a barrier, such as fencing or bunting, to mark out the boundary of the exclusion zone area, and to check that Mr Austin was outside the exclusion zone area before recommencing the removal of the pipe;

(v) to supervise Mr Austin to ensure he did not enter the exclusion zone area; and

65 The third failure by the defendant was to commence work without conducting a risk assessment of the activity and to record the risks associated with the activity and communicate such risks to the workers at the work site before proceeding with the removal of the pipe.

66 The fourth failure by the defendant was to assess whether there was a risk that when using the excavator, the pipeline or chain could fail because of the pulling power of the excavator and the break strength of the pipeline and the chain. The particular chain should not have been used to pull the pipeline out of the ground. The chain broke on the first attempt at retrieving the pipe on 1 August 2009, but was reattached using the unbroken leg (ASF at [70]).

67 The evidence discloses that before the activity commenced on 1 August 2009, a toolbox talk was held to discuss the method of work. During that talk, Mr Austerberry said "everybody's got to keep out the bloody road."

68 As has already been observed, there is no document recording this toolbox talk. It is an agreed fact that what Mr Austerberry said to Mr Austin after he took over driving the excavator, was: "Keep out of the road and go and sit down there", pointing at a log about 17m from the pipeline. There is no evidence that Mr Austerberry gave any adequate instruction or explanation as to the nature of the danger or told Mr Austin the reason why he should remain at the log.

69 As disclosed in the ASF at [68] - [69], the chain had a breaking strength less than the pulling power of the excavator. The pipe sheared off on a number of occasions before Mr Austin suggested placing a piece of wood inside the pipe to prevent the pipe crushing and shearing. This was not a procedure that the defendant had ever used before (ASF [70] - [71]). On one view of the evidence, the defendant was undertaking the activity on a trial-and-error basis.

70 On the occasion that the chain broke for the second time, there was approximately 145m of pipeline exposed that had been stretched as it was being pulled out of the ground with a consequential build-up of energy, such that when the chain broke, the pipeline recoiled. It was shortly after the chain broke on the second occasion that Mr Austerberry and Mr Milne looked towards the tree stump or log, to see what Mr Austerberry was doing, but he was not there. A short time later they found him unconscious on the ground near the pit.

71 In my view, it was clearly foreseeable that after the chain had broken on the first occasion that it may again break and if it did, the pipe would recoil, creating a risk of injury to any person who might be struck by the recoiling pipe. In these circumstances, the approach adopted by the defendant in extracting the pipe was inherently unsafe.

72 The defendant acknowledges that in the circumstances which prevailed at the time when the pipeline became stuck, it ought not have attempted to retrieve it, but should have decided to abandon the pipeline leaving it underground and to drill a new hole to install another line of pipe (ASF [89] - [90]). In the alternative, it could have cut the pipe in sections as it came out of the ground so as to reduce the stored energy in the pipe and the extent of any recoil.

73 Ms Nomchong submitted in mitigation of the objective seriousness of the offence that upon arrival at the work site the defendant did a job safety analysis, although no record of such an analysis had been found (ASF [95]).

74 In an interview conducted by Inspector Paul Rafferty on 14 October 2009, Mr Ken Anderson stated that during the first retrieval procedure, he told Mr Austin to stand with him, some 10m to 15m away from the entrance of the drill hole and said to Mr Austin that if the broke while it was being pulled it could fling out of the hole and anything could happen (ASF [55]). The evidence does not go so far as indicating that Mr Austin was told in any detail how the pipe could recoil and the associated specific risks.

75 Ms Nomchong submitted that what had occurred up to the point in time shortly before the incident could be summarised as follows:

(i) Mr Ken Anderson had issued a specific warning about the risk.

(ii) Mr Ausbterberry had conducted a number of toolbox talks and collaborative efforts describing the procedure and telling everyone to "stay out of the bloody road", "keep out of the way".

76 It is clear from survey documents that had Mr Austin remained on the log, the recoiling pipe would not have reached him.

77 Ms Nomchong submitted that the objective seriousness of not having a written SWMS in respect of the work was moderate. I disagree. As I have already observed, this was an inherently unsafe activity. Similarly, it was submitted, in relation to providing instructions, and in particular, additional instructions to Mr Austin, this would fall within the moderate category. This was because, so it was submitted by senior counsel, that it was difficult, other than having someone stand beside Mr Austin and telling him not to move from the log in respect of what further direction could have been given to him, particularly in the context of what had occurred over the previous two days. I again disagree. The actual risk was not specifically explained to Mr Austin. What Mr Anderson told Mr Austin did not convey the specific risk to Mr Austin's health and safety.

78 Ms Nomchong did concede the objective seriousness of the risk in respect of undertaking the activity itself, not cutting the pipe into shorter lengths and not ensuring that there were equipment fit for the purpose of extracting the pipe, were serious.

79 The defendant conducted several discussions/toolbox talks when the pipeline became stuck, which involved discussions of possible solutions and which included leaving the pipeline and the reamer in the ground and starting again, as well as the retrieval procedure and the attempted excavation which included words to the effect of "keep out the bloody road". Mr Austerberry's evidence was that he believed he had taken measures to prevent an accident.

80 It was further submitted by Ms Nomchong that at the time of the incident, the defendant had a Safe Work Method Procedure Master List that set out 42 risks associated with work methods. However none covered the retrieval process. The defendant also had a documented "company health and safety plan" which required, amongst other things, new employees and contractors to complete an induction program. The safety plan required preoperational toolbox meetings to be conducted on site, hazard assessments and the implementation of hazard controls and the completion of these forms. However, there were no documentary records in relation to these matters in respect of the retrieval project.

81 Ms Nomchong also submitted that the defendant employed experienced personnel and that Mr Austerberry had been working in the industry for over 30 years without incident. The defendant had been in operation for a significantly shorter period. Counsel observed Mr Austin undertook an induction on 31 July 2009 (ASF [40] and [103]). However, although Mr Austerberry and the defendant had a high level of experience in horizontal drilling, it should not be inferred, in my view, that Mr Austin knew what Mr Austerberry knew about the importance of keeping out of the way of a recoiling pipe. The prosecutor accepted that Mr Austin was safety conscious.

82 By email dated 22 July 2009, ESG advised Mr Reynolds and Mr Langley that GD Pipelines would be providing a supervisor on behalf of ESG "to assist with the co-ordination and preparation of the job". It noted that it would require an induction at the Narrabri office before entering the forest as conditions on site had changed.

83 Ms Nomchong criticised the content of the email submitting that the limited functions that had been set out in the email did not specify the nature and extent of the tasks required of a site supervisor. I agree with this submission. A site supervisor's role is a comprehensive one that involves significant responsibility. Mr Roulston was an employee of GD Pipelines and the site supervisor who conducted the "walk around with the defendant's employees on 29 July". However Mr Roulston did not do a similar walk around with Mr Austin when he was provided through his company, TSG.

84 Mr Austin and Mr Milne were not required to take an induction with ESG because they had done one a few weeks before with a company called Ad Tech. I note there is no charge in respect of the failure to carry out an induction.

85 Senior counsel further submitted that the defendant had recognised the risk and had work systems in place, although it was acknowledged they were insufficient and failed to recognise the risk in respect of the retrieval procedure.

86 Ms Nomchong also submitted that there were three other companies at the work site and that the court would take into account that only one of those companies, ESG has been prosecuted.

87 The Defendant was a small employer having approximately 17 employees at the time of the incident. The corporate entity responsible for the project was ESG, now known as Santos Pty Ltd. It has been charged with a breach of s 8(2) of the Act.

88 Other contractors on the site included Australian Soil Technology Pty Ltd and TSG who were contracted to provide a prime mover.

89 ESG on 21 July 2009 requested GD Pipelines to provide a site supervisor for the duration of the Bohena Creek Project.

90 In Nesmat Pty Limited v WorkCover Authority of New South Wales (1998) 87 IR 312, a Full Bench of the Court considered that the absence of prosecution against other parties upon whom a defendant had reasonably relied meant that the sentence imposed on the defendant gave rise to a justifiable sense of injustice (at 322 - 323).

91 In WorkCover Authority of New South Wales (Inspector Page) v Walco Hoist Rentals Pty Ltd (No 2) (2000) 99 IR 163, Wright J President considered the Full Bench decision in Nesmat and stated at [31]:

... In any event, as I understand the decision of the Full Bench in Nesmat Pty Ltd it was not held that the failure to prosecute a defendant which was otherwise appropriate to be prosecuted was a matter which, of itself, would mitigate the penalty. Rather, what the Full Bench decided was that in a situation where there had been a failure, in assessing a defendant's relative culpability, to consider the inter-related culpability of another party which had not been prosecuted, and that failure resulted in an inappropriate penalty being imposed, that situation itself engendered an appropriately based sense of grievance which was in turn emphasised by the failure to prosecute the other potential defendant.

92 And further at [33]:

The Court was there reflecting upon a number of considerations, both objective and subjective (but particularly the former), which it concluded had not been taken into account sufficiently at first instance. Particularly relevant was the role of the other potential defendant which had not been charged and its role, both independently and contributory, in the events which had led to the defendant's conviction. Such matters, as is clear from the second last paragraph cited, were crucial to an assessment of the culpability of the defendant. The reference to the "justifiable sense of grievance" is also relevant to the application to the appeal principles which were applicable at the time of that appeal (for example, House v The King (1936) 55 CLR 499 and Cranssen v The King (1936) 55 CLR 509) which are different to those now applicable under s 196 of the Industrial Relations Act 1996 and, for example, Fletcher Construction Australia Limited v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 75. This analysis is consistent with the approach of Walton J, Vice-President, in WorkCover Authority of New South Wales (Inspector Ankucic) v McDonald's Australia Limited (unreported, IRC98/1104 and 1106, 4 February 2000) at 104 - 107.

The significance of the failure to prosecute, or to continue the prosecution of the other potential defendants, is not that fact but rather the fact that any assessment of the role of the present defendants must be considered in the light of the consideration that the criminality for the breach of occupational health and safety was one which did not fall solely on the shoulders of these defendants. That fact, of itself, involves consideration of matters which may mitigate the conclusion as to the objective seriousness of the offences committed and thus the penalty which should be imposed in relation to them.

93 I am bound by the Full Bench's observations in Nesmat and respectfully agree with those of Wright P in Walco Hoist Rentals. In respect of this incident, a prosecution has been brought against ESG, although it appears that GD Pipelines has not been the subject of any prosecution. Their contribution to the incident appears to be, in my view, less than this defendant who had broader and different responsibilities in respect of the removal of the pipeline. The critical factor in respect of the culpability of third parties, as observed by the Full Bench in Wong v Melinda Group Pty Ltd (1998) 82 IR 118, is the "actual contribution of the defendant". The contribution to the incident fell substantially on the shoulders of the defendant. It bore the overwhelming obligations and responsibilities for safety at the site in respect of the retrieval of the pipe. In this respect, the failure to prosecute GD Pipelines and other companies on the site apart from ESG, is not significant.

94 Ms Nomchong referred to the defendant's safe work method documentation in respect of the operation and submitted that this demonstrated that it took a proactive approach to occupational health and safety. Counsel observed Mr Reynolds was an experienced employee of the defendant in this respect.

95 Ms Nomchong also emphasised that the defendant had what Mr Austerberry described in his evidence as a "job pack", which was prepared to ensure the health and safety of employees and non-employees.

96 Senior counsel further submitted that Mr Austin had been given a clear direction to stay away from the pit area and that Mr Austin had worked with the defendant previously and was not a reckless or careless employee. It was therefore submitted that there was nothing to indicate to the defendant that he would not follow this instruction. It followed, senior counsel submitted, that it was not readily foreseeable that a reliable and experienced worker such as Mr Austin would walk away from a place he had been told to place himself. Although there is some substance in this submission it is however well established that the objective seriousness of an offence is not substantially reduced by adopting a method of work that relies on the worker always acting in the manner that is careful or as directed.

97 The defendant conceded that there was a foreseeable risk arising from the recoil of the pipeline and also conceded that the defendant through Mr Austerberry (and indeed through Mr Anderson) was aware that there was a risk to safety because they appreciated they had issued warnings to Mr Austin. However, it was submitted that it was not foreseeable that Mr Austin would leave the place where he had been told to sit and walk approximately 60m into the pit area.

98 Ms Nomchong submitted that the foreseeability of Mr Austin acting in this manner was remote. However, employers and contractors must be cognisant that employees may be inquisitive or curious about how work is being undertaken and therefore behave in a manner not anticipated.

99 It has been emphasised on numerous occasions by this court that an employer must be proactive in ensuring health and safety. In WorkCover Authority of New South Wales (Inspector Mulder) v Arbor Products International (Australia) Pty Ltd [2001] NSWIRComm 50; (2001) 105 IR 81, Walton VP and Boland J, (Kavanagh J dissenting) stated at [45] - [46]:

[45] The duty to provide a risk free work environment is a duty owed not only to the careful and observant employee but also to the hasty, careless, inadvertent, inattentive, unreasonable or disobedient employee in respect of conduct that is reasonably foreseeable: Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313 at 320; McLean v Tedman (1984) 155 CLR 306 at 311 - 312 and WorkCover Authority of NSW (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248.

[46] We agree with the conclusions of the Full Bench in Riley v Australian Grader Hire Pty Ltd [2001] NSWIRComm 31 [at 15] as follows:

The magistrate appears to have reached her conclusion as to the objective seriousness of the offence, having regard to the lack of common sense of the injured worker. It is reasonably clear from her decision that it was concluded that the conduct of the injured worker effectively removed or minimised the liability of the respondent in relation to the lack of training or instruction afforded the employee. This was wrong in principle. Section 15 of the Occupational Health and Safety Act requires employers to be diligent and proactive to ensure the safety of employees. Those obligations are not diminished because of the error or negligence of an employee, although such matters may reflect on the degree of culpability of the employer for the purposes of sentencing. We note the following observations of Bauer J in WorkCover Authority of New South Wales (Inspector Twynam-Perkins) v Maine Lighting Pty Limited (1995) 100 IR 248 at 257:

"Much of what was urged by Mr King was directed to showing that the worker who was killed knew of, and therefore ought to have avoided the exposed electrical connections. In one sense such a submission militated against the position of the defendant; the very purpose of the Act was to introduce safe working practices so that accidents are prevented. The Act was designed to protect against human errors including inadvertence, inattention, haste and even foolish disregard of personal safety as well as the foreseeable technical risks in industry."

(See also WorkCover Authority of NSW (Inspector Hopkins) v Profab Industries Pty Ltd (2000) 49 NSWLR 700 at 722).

100 In Inspector Simpson v Tomago Aluminium [2005] NSWIRComm 117 at [28], Boland J, as he then was, stated:

It cannot be assumed that because a worker, even an experienced one, has received extensive training and instruction in relation to safety procedures that such training and instruction cancels out any possibility that he or she will not place themselves at risk in relation to a dangerous piece of machinery that is not guarded to the maximum possible degree. Workers may act foolishly, as demonstrated in cases such as WorkCover v TRW Steering & Suspension Australia Ltd [2001] NSWIRComm 52 at [13] and Inspector Woodington v Thiess Services Pty Ltd [2004] NSWIRComm 20 at [70]. That is why the obligations on an employer under the Act require that employer to actively search out and, where it is at all possible, eliminate any risk to health and safety.

See also Inspector Beacham v Delta Shelving Systems Pty Ltd [2012] NSWIRComm 103 per Staff J at [73]; Dunlop Rubber Australia Ltd v Buckley (1952) 87 CLR 313 at 320 and McLean v Tedman (1984) 155 CLR 306 at 311 - 312.

101 I have earlier referred to the principles of foreseeability as a factor in determining the objective seriousness of an offence. See Capral Aluminium Ltd v WorkCover Authority of New South Wales (2000) 49 NSWLR 610 at 646; 99 IR 29 at 62 - 63. The existence of a reasonably foreseeable risk of injury will necessarily result in the offence being considered to be more serious in nature: Capral at 81 - 82; Department of Mineral Resources of NSW (McKensey) v Kembla Coal and Coke Pty Ltd (1999) 92 IR 8 at 27; Fletcher Construction Australia Ltd v WorkCover Authority of New South Wales (Inspector Fisher) (1999) 91 IR 66 at 79.

102 It was, in my view, obvious and foreseeable, particularly after the chain had broken once on 1 August 2009, that there was a significant risk that it would occur again given that the same chain was being used. It was also obvious and foreseeable that there was a risk of injury to any person at the site if they were struck by a recoiling pipeline if and when the chain broke again.

103 The defendant has acknowledged that it failed to ensure that Mr Austin was not exposed to that risk in pleading guilty to the charge and particulars.

104 It will be a serious offence where there is an obvious or foreseeable risk to safety against which appropriate measures were not taken. In this matter, simple and effective measures were available which would have identified or otherwise reduced the risk to Mr Austin's health and safety. The defendant has admitted that it should have left the stuck pipeline and reamer in the ground and not attempted to pull it out. Had that decision been taken the accident would not have occurred. The incident would have also been avoided if the defendant had established a clear exclusion zone by erecting a physical barrier, providing adequate information to Mr Austin about the danger of standing within the exclusion zone area and giving clear instructions to Mr Austin to stay outside the exclusion zone. The SWMS which formed part of "the Pack" under "Agreed Contracts" stated "wear appropriate PPE ie Hard hat, safety boots, hearing protection, hi-vis vest, sunblock, eye protection (as required)". The ASF and the evidence are silent in respect of whether hard hats were worn on the construction site. Needless to say, hard hats should be worn on all construction sites at all times.

105 Accepting that the tree line formed a safety barrier, as Mr Austerberry stated in his evidence, this should have been plainly communicated to Mr Austin so that he was left in no doubt that there was a risk to his safety if he did not remain behind the tree line.

106 In my view and I find, when an assessment of the foreseeability of the risk is taken into account, together with the ease with which measures to control it or eliminate it could have been taken (undertaking a risk assessment and having a written safe work method statement for the extraction of the pipe), as well as the consequences of the defendant's failings, being the death of Mr Austin, this is an objectively serious offence which lies in the mid-range of seriousness.

General deterrence

107 Senior counsel for each party accepted that there was need for general and specific deterrence to be included in any penalty. This case highlights the risk of serious accidents associated with horizontal directional drilling when a pipe becomes stuck underground. The use of this technology is common in the expanding coal seam gas industry and in the water and electrical services industries.

108 I consider it is appropriate to draw attention to the serious risk of injury associated with dealing with such pipelines in circumstances where they become stuck underground and a decision is taken to retrieve the pipe. Employers and contractors should be constantly vigilant of the need to ensure the proper establishment of exclusion zones when there is an obvious and foreseeable risk from which workers should be protected if the pipeline recoils when it is pulled from underground under pressure (and consequently stretches) and then suddenly releases. The procedure adopted by this defendant in removing the pipe and the way it approached the task should be discouraged. I include a component in the penalty for general deterrence.

Specific deterrence

109 I accept, in light of the evidence given by Mr Austerberry, that this is not a case which calls for the imposition of some additional significant punishment aimed at deterring the defendant from further offending against the OHS Act and/or for the purpose of compelling the defendant's attention to occupational health and safety issues, so that persons are not exposed to risks to their health and safety. The prosecutor conceded that the court would not add a significant sum to the penalty in respect of specific deterrence. The attitude of the defendant to workplace safety and the procedures that it has now developed for the retrieval of pipelines are relevant to specific deterrence. In addition, I note that the defendant has not undertaken any horizontal drilling work since it moved to the Northern Territory. I include a small component in the penalty for specific deterrence.

Subjective factors

110 The defendant has no prior convictions although it operates in an inherently dangerous industry.

111 Section 21A(3) of the Crimes (Sentencing Procedure) Act 1999 provides for mitigating factors to be taken into account in determining the appropriate sentence. Relevant for these proceedings are the following subparagraphs:

(f) the offender was a person of good character;

(g) the offender is unlikely to re-offend;

(h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise;

(i) the remorse shown by the offender for the offence;

(j) the offender has shown remorse for the offence by making reparation for any injury, loss or damage or any other manner,

(k) the plea of guilty by the offender;

(m) assistance by the offender to law enforcement authorities (as provided by section 23).

112 I accept that in light of the evidence of Mr Austerberry that the defendant had a documented health and safety plan and 42 documented safe work method procedures. The defendant introduced a specific safe work method plan to address the extraction of a pipeline after the incident. In these circumstances, the defendant is entitled to a finding of good industrial citizenship.

113 The evidence discloses that the defendant was a reputable and well respected corporation that had gained significant work in the horizontal directional drilling industry, particularly in the Newcastle and Hunter regions. It had a managerial structure in which compliance with occupational health and safety was delegated to the General Manager, Mr Reynolds.

114 I find that the defendant has shown remorse for the offence, responded to the incident which has had a significant personal affect on the sole director of the defendant, with deep concern. It formally expressed that concern and sincere remorse to the court through Mr Austerberry.

115 I also find that the defendant for the reasons already outlined in this judgment and in light of its good industrial record is unlikely to reoffend.

116 The incident has also had a significant impact upon Mr Austerberry personally and the defendant financially. The prosecutor acknowledged that such matters could be taken into account in determining penalty: Inspector McGrath v Cooper [2013] NSWIRComm 14 at [46]. The prosecutor accepted that Mr Austerberry as the alter ego of the defendant, was a safety conscious person and a careful person. I take this fact into account.

117 The defendant formally entered a plea of guilty to the charge on 26 November 2012. The application for order was filed on 28 July 2011. The plea was entered some 14 months after service of the prosecution brief and statement of facts and at the tenth directions hearing. The prosecutor accepted that part of the delay was explicable given the size and complexity of the matter; that following the incident Mr Austerberry lost the benefit of senior staff who could have otherwise assisted him to deal with the matter and that he has continued to work in remote locations, most recently in the Northern Territory, such that communications with his lawyers would have been more difficult than would be the case for other defendants within the jurisdiction.

118 The prosecutor also acknowledged that the plea reflected the defendant's contrition and had a substantial benefit to the administration of justice and therefore accepted that the court would give a significant discount to the penalty to reflect those facts.

119 Ms Nomchong rejected the prosecutor's assertion that the plea was not entered at the first available opportunity. She pointed to the complexity of the matter and that Mr Austerberry had also been charged pursuant to s 8(2) of the OHS Act, such prosecution having since been withdrawn.

120 Ms Nomchong also pointed to the number of expert reports that were served by the prosecutor and submitted that the full 25 per cent discount for the plea of guilty should be provided to the defendant.

121 In my view, the contention that the plea was entered at the first opportunity cannot be made out. Taking into account all of the circumstances relied upon, I find that the defendant is entitled to a discount of 20 per cent as a result of the utilitarian benefits offered by the plea.

122 I find that the defendant co-operated with the Department of Primary Industries during its investigation and that it is appropriate to take this matter into account in determining penalty. I also find in accordance with the evidence that the defendant was not a company that disregarded safety matters before the incident.

123 The evidence discloses that the defendant had been proactive in terms of its written OHS policy and documentation.

124 Following the incident, as I have already observed, it developed an SWMS for the retrieval procedure. It is appropriate that I take these matters into account in determining the overall penalty.

Victim impact statement

125 Mrs Ann Austin, the wife of Mr Austin, read a victim impact statement to the court. Mrs Austin stated that she was present in court to honour her wonderful husband. She outlined her life with her husband prior to his accident. They were married for 38 years and raised 5 children - 3 daughters and 2 sons. They had 8 grandchildren as the time of Mr Austin's death. Another 3 grandchildren have since been born.

126 Mrs Austin spoke of family celebrations, holidays and weekend getaways with family and close friends and said that Mr Austin was the glue that bound the family together. Although she has tried, it has been difficult to carry on these family traditions. Family gatherings have become breakfast in a park for a couple of hours or one or two of the family meeting for dinner.

127 Mrs Austin also spoke of her husband as being a hardworking, intelligent, compassionate, honest, loving, healthy man who was positively passionate about his life.

128 Mrs Austin described the circumstances of being told initially about Mr Austin's accident at work and upon her arrival at the hospital, where she was informed by the doctor that her husband's injuries were not life-sustainable. Her world was shattered in that moment. She recalled her son then holding her and putting a coat around her and her daughter Kelly collapsing in a chair. At the time of the accident her youngest daughter Lauren and her 4 year old son Angus, were two weeks into a European holiday after the death of her own husband only 12 months prior to the incident. Their trip was cut short by 5 weeks.

129 Mrs Austin spoke of the family gathering at the hospital. Christie, Adam, Ben, Kelly, Lauren and their families and making the decision to turn off Mr Austin's life support. This decision will haunt her for the rest of her life. She told of her feelings of panic and uncontrollable grief.

130 Mrs Austin detailed the impact that her husband's violent death had on her as falling into five categories of health, finance, social, psychological and family. She suffers sleeplessness, horrific nightmares, has developed appetite change, and experiences headaches.

131 Financially, her world has collapsed. She has had to sell the family property and move to a very small affordable house, which was not the retirement life that she and her husband had expected. She spoke of being lonely and fearing growing old alone.

132 Socially, she found that a lot of people she thought were friends did not want to talk to her about the loss of her husband as they could not deal with her grief. She has found herself avoiding people, unable to go out alone, not answering the phone and for a time, experiencing a lack of interest in other people. She said her son had told their solicitor that not only did the family lose their father, but they have also lost the mother they had always known.

133 Her psychological impact has included, at various times, sadness, crying, guilt and fear, anger, swearing, depression and an inability to stop thinking about her husband's death. She has had great anxiety and mood swings and, at times, feels abandoned and angry. She has attended counselling and has said that she will never forget the lack of communication at the time of the accident, particularly that no-one bothered to speak to them from the defendant or ESG. No-one would tell them what happened to Bruce for weeks after he died.

134 The family impacts include having Christmas without her husband, together with birthdays and anniversaries.

135 Mrs Austin stated that she became angrier when the investigation report was released because it was clear that the issues that contributed to her husband's death should have been addressed in the planning and assessment of the task being conducted at the time of the incident. The realisation to her and her family that occupational health and safety policies were not put in place was devastating. She said that she was trying to understand through a cloud of confusion why the rules that were already in place were ignored and asked how she could explain this to her grandchildren.

136 Mrs Austin concluded by stating that she had difficulty coping with what she perceived as a cavalier attitude of ESG, a lack of information from the police and a lack of contact with her from the defendant. She felt their collective behaviours were inexcusable and downright arrogant. She said her family deserved to be told why their lives had changed forever in a timely and dignified manner and that the system OF post death processes (including those of the defendant and the police) need to be changed so that families are fully informed in every part of that process and not just left to suffer, hopefully in silence.

137 The Court of Criminal Appeal in R v Mansour [1999] NSWCCA 180 and Hunt CJ at CL in Previtera (1997) 94 A Crim R 76 (at 84 - 85) stated that the Court in sentencing may bear in mind a victim impact statement and have regard to the particular effect of the deceased on members of the family. However, the Court should not give these considerations weight in determining the sentence imposed: Inspector Glass v Foamex Polystyrene Pty Ltd [2004] NSWIRComm 100 at [43]. See also Inspector Simpson v Tomago Aluminium Co Pty Ltd (unreported) Haylen J 27 April 2004 Matter No IRC 5351 of 2003); Inspector Sharpin v A Team Concrete (Aust) Pty Ltd [2004] NSWIRComm 182 at [138] where I observed:

Victim impact statements presently serve two distinct purposes. In the case of family victims, where a family member has died as a result of a breach of the Occupational Health & Safety Act 2000, it provides an opportunity for the family to express their feelings of grief and loss, and allows proper public respect to be paid to these feelings. In cases where there has not been a death, not only does the victim impact statement provide an opportunity for the victim to have proper public respect paid to their pain and suffering, but it also has a role to play in the determination of the appropriate sentence to be imposed by the Court. The statement will explain to the Court the extent of the impact the crime has had on the victim's life.

138 The court extends its deepest sympathy to Mrs Austin, Christie, Adam, Ben, Kelly, Lauren, their families and friends.

139 The maximum penalty in respect of the defendant is $550,000. Taking into account the seriousness of the offence, and the subjective factors referred to earlier, I impose a fine of $170,000.

140 I observe that absent the defendant's impressive approach to occupational health and safety in what is an inherently dangerous industry, together with the additional steps it took after the incident, the penalty would have been greater.

141 The prosecutor seeks a moiety and costs which I propose to grant.

Orders

142 I make the following orders:

1. The offence is proven and a verdict of guilty is entered.

2. The defendant is convicted of the offence, as charged.

3. The defendant is fined an amount of $170,000 with a moiety thereof to the prosecutor.

4. The defendant shall pay the prosecutor's costs of the proceedings in an amount as agreed or, if agreement cannot be reached, as assessed.

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Decision last updated: 22 May 2013