SafeWork NSW Prosecutes Owners

/in ,

NSW

SafeWork NSW v The Owners – Strata Plan No 93899 [2024] NSWDC 277

In response to the tragic death of a worker at Strata Plan 93899 and a significant legal case where the employer was fined $500,000 (with a 25% discount for an early guilty plea), plus costs (SafeWork NSW v Maluko Pty Ltd [2023] NSWDC 274) under the Work Health and Safety Act 2011 (NSW) (WHS Act), we produced training sessions and articles that delve into these critical issues.

In the next phase of the matter, the New South Wales District Court delivered a significant judgment in the case of SafeWork NSW v The Owners – Strata Plan No 93899 [2024] NSWDC 277 which involved determining the Owners Corporation’s liability.

Case Background

As you will remember, the case arose from a workplace safety incident at a strata-managed industrial property. SafeWork NSW, the state’s regulatory authority responsible for enforcing workplace health and safety laws, brought action against The Owners – Strata Plan No 93899, the legal entity representing the owners of the strata scheme.

In this case, SafeWork NSW alleged that the Owners Corporation had failed to comply with its obligations under the WHS Act, particularly in relation to maintaining a safe environment for workers and visitors to the property. The allegations centred around deficiencies in the management of common property, including issues with safety measures and risk assessments.

Key Issues

The core issues in the case involved:

  1. Compliance with WHS Obligations: Whether the Owners Corporation had met its statutory obligations to ensure the health and safety of workers and visitors, particularly in the context of maintaining common property areas.
  2. Duty of Care: The extent of the Owners Corporation’s duty of care under the WHS Act and whether it had taken reasonable steps to mitigate identified risks.
  3. Risk Management: The adequacy of risk management processes implemented by the Owners Corporation, including safety audits and maintenance practices.

Court’s Findings

The New South Wales District Court examined several critical aspects of the case:

  1. Extent of Liability: Whether the Owners Corporation, as a collective entity representing individual owners’ interests, could be held responsible for safety breaches in common areas. The court determined that it could.
  2. Breach of Duty: The court found that the Owners Corporation had breached its duty of care.
  3. Penalties and Orders: In light of these findings, the court imposed penalties on the Owners Corporation.

In making the claim, SafeWork claimed that the Owners Corporation failed to take one or more of the following reasonably practical measures to eliminate or reduce risk:

  • Undertake, or require the strata manager 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 the strata manager 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 remains untouched, open, and unlocked to allow access to the site until it is repaired or replaced by a competent person.
  • Develop and implement a safe work method statement or safe work procedure for the manual operation of the Gate.

These issues being accepted by the parties, the Court went on to determine the Owners Corporation’s level of culpability and found:

  1. The risk of the Gate falling was foreseeable. Even a cursory inspection of the rough and ready temporary repairs would have led to the realisation that there was no stopper and the Gate could slide past the southern rollers and then fall. Further, there was guidance material that disclosed the risk.
  2. The likelihood of the risk occurring was significant. This is particularly illustrated by the CCTV of the incident which shows that “Mr M” had to wrestle with the Gate to get it to move.
  3. The potential consequences of the risk were serious injury or, as happened, death.
  4. There were simple, no-cost steps available to eliminate or minimise the risk.
  5. There was no burden or inconvenience involved in those steps.
  6. The death of Mr M was caused by the breach of a safety duty by the Owners Corporation.
  7. This was a continuing offence, and the evidence shows that workers were exposed on several days to the risk, not just on 12 June 2020.
  8. The maximum penalty for the offence is a fine of $1,731,500, which reflects the legislature’s view of the seriousness of the offence. The penalty increased from $1,500,000 to $1,731,500 only two days before the incident, but during the period of the continuing offence committed by the Owners Corporation.
  9. The default of other parties (Maluko, who has already been sentenced, and the Strata Manager, who has pleaded guilty but is yet to be sentenced) made a significant contribution to the creation of the risk and the death of Mr M. However, the Owners Corporation had its own independent safety duty under the WHS Act. As the owner of the common property, which included the Gate, it had the power as well as the obligation to make the site safe.
  10. This case is not of the usual type which comes before the court, where a Person Conducting a Business or Undertaking (PCBU) conducting a for-profit business creates or ignores a risk to workers engaged or controlled by it. The risk here was created by persons unknown performing ad hoc repairs to put the Gate back into service before it could be professionally repaired.
  11. The Owners Corporation did report the damage to the Gate promptly to the strata managing agent and did follow up with the agent to arrange the repairs for the Gate.

Significance of the Case

This case is significant for several reasons:

  1. Clarification of Responsibilities: The judgment clarifies the extent of the responsibilities of Owners Corporations under the WHS Act. It underscores the importance of maintaining rigorous safety standards in common property areas and highlights the legal consequences of failing to do so.
  2. Impact on Strata Management: The case serves as a critical reminder for Strata Managers and Owners Corporations about their duty of care and compliance with workplace safety laws. It reinforces the need for proactive risk management and regular safety audits.
  3. Legal Precedent: The decision contributes to the body of case law concerning workplace safety in strata-managed properties, providing guidance for similar future cases.

What Should an Owners Corporation Do in Future?

This case and the previous case are stark reminders for Owners Corporations and Strata Managers that they need to act quickly when there is damage or an incident in a strata scheme. There needs to be a proper assessment (by experts if necessary) to determine the level of risk to people that come and go to the strata scheme.

There also needs to be quick and expedient resolution to any works required, signage and information sharing between owners and occupants on the risks involved, how the Owners Corporation and owners are reducing or alleviating that risk, the proposed works to be undertaken and what occupants should be doing to comply with any directions given.

Note 1: Owners Corporation and Managing Agent

As at the date of this paper, the issue concerning the Strata Manager has not been finalised (although in the decision the Court noted that the Strata Manager had pleaded guilty as well) and it is unknown whether further penalties or sanctions will be applied.

Note 2: Change to the Act Concerning the Provision for Insurance to Cover a Penalty

Effective from 10 June 2020, following the inclusion of Section 272A to the WH&S Act, it is no longer permissible for insurance products to indemnify the insured for penalties imposed under the Act for incidents occurring after that date.

This is significant as managing agents are often a Person Managing Work of a Contractor (PMWC), regardless of whether their client is exempt from being a PCBU under Section 7 of the Work Health & Safety Regulation 2020 (Regulation). This exemption from review may not apply to Owners Corporations where common property is used for non-residential purposes, like, short-term letting or telecommunications facilities.

Summary

The outcome of SafeWork NSW v The Owners – Strata Plan No 93899 [2024] NSWDC 277 marks a pivotal moment in workplace safety jurisprudence. With the New South Wales District Court’s finding of liability against the Owners Corporation, it underscores the critical importance of diligent safety practices in strata-managed properties. This case serves as a stark reminder of the legal obligations under the WHS Act, highlighting the severe consequences of failing to maintain safe environments for workers. Moving forward, Owners Corporations and Strata Managers must prioritise rigorous risk management and swift action to mitigate hazards, ensuring the safety of all occupants and visitors.

Written by Colin Grace, Founder and Partner, Grace Lawyers

If you require legal advice about an WHS incident, please contact us on 1300 144 436.