Citation: WorkCover Authority of NSW v Karemen Pty Ltd [2016] NSWDC 201
Court: District Court of New South Wales
Date: 2 September 2016
Judge: Kearns DCJ
Background
Karemen Pty Ltd was a small family-run motor vehicle repair business operated by Tony and Rosetta Lombardo. On 16 April 2014, a long-serving employee and qualified mechanic was working beneath a customer's vehicle that had been raised on a two-post hoist. The vehicle shifted and fell, striking the mechanic on the back of the neck. He died from his injuries.
Investigation revealed that all four supporting arms of the hoist could be moved by hand despite being set to the locked position. The relevant Australian Standard and the hoist's own manual both required daily checks of the locking mechanisms. The agreed facts established that such checks would have revealed the defective condition, and that the hoist's locking mechanisms had been in poor condition for some time before the incident.
Karemen was charged under section 32 of the Work Health and Safety Act 2011 with a breach of its primary duty of care under section 19(1). The company pleaded guilty.
Legal Issues
- What was the objective seriousness of the offence, having regard to foreseeability of risk, foreseeability of the consequences, and the availability of preventive measures?
- What weight should be given to aggravating and mitigating factors, including the fatality, the company's guilty plea, its remorse, co-operation, and its precarious financial position?
- What fine was appropriate, and should relief under the Fines Act 1996 be applied given the defendant's financial circumstances?
Decision
Kearns DCJ assessed the offence as falling in the mid-range of objective seriousness. The risk that a vehicle would shift and fall if the hoist arms could move while locked was plainly foreseeable, as were the potentially fatal consequences. A 2013 Western Australian safety alert about a fatality involving a similar hoist failure, together with the relevant Australian Standard and the hoist manual's daily-check requirement, reinforced that foreseeability. Preventive measures were readily available and straightforward.
The death of the worker was treated as a substantial injury and therefore an aggravating factor under section 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999. General deterrence carried significant weight, particularly because small businesses of this kind are not exempt from the deterrence rationale of workplace safety law. Specific deterrence was given less weight, given the profound effect the incident had on Mr Lombardo and the post-incident safety improvements Karemen undertook.
In mitigation, the court accepted the company's guilty plea (entered at a relatively early stage), its co-operation with investigators, its expression of remorse, and its assistance to the deceased's family with funeral arrangements. Karemen had no prior convictions, and the business had operated for over three decades without incident. A 25% discount was applied for the early guilty plea.
The defendant's financial position was a significant consideration. Karemen was barely trading, with liabilities exceeding assets by more than $100,000, and was kept afloat by loans from the Lombardos who did not expect repayment. While the maximum penalty under the Act was $1,500,000, the court imposed a substantially reduced fine that was described as meaningful but proportionate to the company's financial reality.
Orders Made
- Karemen Pty Ltd convicted of the offence under section 32 of the Work Health and Safety Act 2011.
- Fine of $75,000 imposed (reduced from $100,000 by a 25% guilty plea discount), with a moiety (half) payable to the prosecutor.
- Defendant to pay the prosecutor's costs in the agreed sum of $30,000.
Key Takeaways
- The District Court placed the offence in the mid-range of objective seriousness where a foreseeable risk was not eliminated through readily available and basic maintenance measures, even without evidence of deliberate disregard.
- Foreseeability was assessed by reference to multiple sources: the applicable Australian Standard, the manufacturer's manual, and a published safety alert about an analogous fatality in another jurisdiction. Each of these independently supported a finding that the risk, and its fatal potential, were plainly foreseeable.
- A 25% sentencing discount applied to a guilty plea entered at a relatively early stage of proceedings, consistent with established sentencing practice under the Crimes (Sentencing Procedure) Act 1999.
- Under the Fines Act 1996, a defendant company's genuine financial incapacity can justify a fine substantially below what the objective seriousness of the offence might otherwise attract, provided the reduced figure remains meaningful and accounts for the need for deterrence.
- General deterrence retained significant weight even in a small, close-knit family business where the offending arose from neglect rather than calculated risk-taking. The personal impact of the tragedy on the employer did not displace that consideration, though it reduced the weight given to specific deterrence.
Legislation and Cases Referenced
Legislation:
- Work Health and Safety Act 2011 (NSW), ss 19(1), 32
- Crimes (Sentencing Procedure) Act 1999 (NSW), ss 3A, 21A
- Fines Act 1996 (NSW)
Standards and Guidance:
- Australian Standard AS/NZS 1418.9:1996 – Cranes (including hoists and winches): Vehicle hoists
- Government of Western Australia Safety Alert (2013) regarding fatality from vehicle fall from two-post hoist
Cases cited: No cases were cited in the judgment.