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Posted 22 August 2024
Category: Strata, WH&S
Following on from our article regarding SafeWork NSW v Maluko Pty Ltd [2023] NSWDC 274 (“Maluko”), another notable judgment has been handed down by the Court, but this time against The Owners – Strata Plan No. 93899 (the “Owners Corporation”).
This case was determined with respect to the same factual events as Maluko. The important facts concerning this recent criminal case of SafeWork NSW v The Owners Strata Plan No 93899 [2024] NSWDC 277 (the “Decision”) have been summarised and set out in this article.
Similar to the decision in Maluko, the Court found that the Owners Corporation breached its duty as a “person conducting business or undertakings (“PCBU”) involving management or control of workplaces” pursuant to section 20(2) of the Work & Healthy Safety Act 2011 (NSW) (the “Act”).
As a result of this finding of breach of duty, the Owners Corporation was penalised with a fine in the sum of $225,000.00, plus an order for costs in the sum of $40,000.00.
Section 20(2) of the Act provides that a PCBU:
“… must ensure, so far as reasonably practicable, that the workplace, the means of entering and exiting the workplace and anything arising from the workplace are without risks to the health and safety of any person.”
Following the Decision, group title structures such as owners corporations who are PCBU’s should ensure that they have the following:
Where to start?
Take our quiz: I’m an Owner – Does my scheme need a WH&S policy? to determine if your group title structure needs a policy and if so how can we help.
How can we help?
A strata managing agency agreement will usually leave it to an owners corporation to comply with its own work health and safety obligations that became issues in this case. Bannermans Lawyers can assist owners corporations through the Bannermans WH&S Package for Building Owners! This will include:
If you are interested in acquiring in any of the above, please contact Bannermans Lawyers on 02 9929 0226 or on enquiries@bannermans.com.au for advice on how to proceed.
Prosecution’s Case
The Owners Corporation pleaded guilty to the amended summons filed by the prosecution (the “Amended Summons”), which stated that the Owners Corporation failed to comply with its duty under section 20(2) of the Act “between 5 June 2020 and 12 June 2020”, being the period during which the damage occurred to the gate and extending to the date on which the fatality occurred (the “Offence Period”). Extracted from paragraph 7 of the Decision; the reasoning was as follows:
“The defendant (Owners Corporation) failed to ensure so far as is reasonably practicable, that the Site, the means of entering and exiting the Site, and anything arising from it were without risks to the health and safety of any person, and in particular, Mr Martins in that it failed to take one or more of the following reasonably practicable measures to eliminate, or alternatively minimise if not reasonably practicable to eliminate, the risks to the health and safety of any persons:
Undertake, or require Chris Darby to arrange, an immediate risk assessment in relation to the safety and security issues at the Site arising from the motor vehicle incident and the resulting damage to the Gate.
Take the Gate out of service immediately after the motor vehicle incident and post signage to the effect that the damaged Gate was not to be operated manually until it was fully repaired or replaced. Implement, or require Chris Darby to implement, measures to keep persons away from the damaged Gate, such as temporary barricades, exclusion zones and/or warning signs.
Direct that the damaged Gate not be touched and remain opened and unlocked so as to allow access to the Site pending the repair or replacement of the damaged Gate by a competent person.
Develop and implement a safe work method statement or safe work procedure for the manual operation of the Gate.”
The Amended Summons also pleaded that the following guidance material was not considered by the Owners Corporation, despite being available at the time of the incident (extracted from paragraph 41 of the Decision):
Owners Corporation’s Conduct following the Incident
The conduct of the owners corporation following the incident is summarised below.
Financial Affairs of the Owners Corporation
On 24 January 2023, the Scheme was valued at $1,955,000.00 for insurance purposes.
Mr Petrovski, a lot owner in the Scheme, prepared an affidavit (which is a sworn statement used as evidence in legal proceedings). Annexed to this affidavit were the following documents, which set out the Owners Corporation’s financial position (extracted from paragraph 77 of the Decision):
The Owners Corporation’s financial position was reflected in the most recent financial report, which confirmed the following (extracted from paragraph 78 of the Decision):
In preparation for the sentencing hearing, each lot owner was requested to submit information detailing how a monetary penalty would affect them. Mr. Petrovski compiled the submissions from each owner and included pertinent documents such as financial statements, tax returns, and letters.
Owners Corporation’s Insurance Matters
The Owners Corporation held an insurance policy that was intended to cover legal expenses incurred in WHS matters. However, the insurer declined the claim after the Owners Corporation lodged complaints with regulatory agencies.
The Owners Corporation’s Level of Culpability
The findings of the Court regarding the Owners Corporation’s culpability were based upon the following:
These findings underscore the Owners Corporation’s significant responsibility for maintaining safety in common areas and highlight the legal implications of failing to address foreseeable risks.
Mitigating Factors
In considering the determinative issue of whether the maximum penalty applies, the Court took into account the Owners Corporation’s mitigating factors.
Here are the key mitigating factors considered by the Court in sentencing the Owners Corporation:
In summary, the Court took into account the Owners Corporation’s financial situation, lack of prior offenses, remedial actions, remorse, and cooperation as mitigating factors in determining the appropriate sentence.
Penalty and Court Orders
With consideration to the Owners Corporation’s mitigating factors, the Court made the following orders (extracted directly from the Decision):
For more information regarding Work Health & Safety requirements, watch Bannermans Lawyers ‘WH&S – Requirements for Group Title Schemes’ webinar to learn about the importance of your scheme having a WH&S policy.
Related articles
Important WH&S Case Update for the Strata Industry: Part 1
Work Health & Safety Implementation Guide
Work Health & Safety Act 2011 and the Work Health & Safety Regulation 2011
Is Your Strata Scheme Exempt From Complying With WH&S?
Safety Reports in Strata Schemes and Occupiers Liability
Owners Corporation’s Duty to ensure safety of the Common Property
Asbestos Compliance under the Work Health and Safety Regulation 2011 for Group Title Structures
Need a Work Health and Safety Policy? New easy and inexpensive option
***The information contained in this article is general information only and not legal advice. The currency, accuracy and completeness of this article (and its contents) should be checked by obtaining independent legal advice before you take any action or otherwise rely upon its contents in any way.