Director of Public Prosecutions v Misz Pty Ltd
[2024] VCC 1449
•18 September 2024
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-22-01445
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| MISZ PTY LTD |
-
JUDGE: | HIS HONOUR JUDGE PALMER | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 September 2024 | |
DATE OF SENTENCE: | 18 September 2024 | |
CASE MAY BE CITED AS: | DPP v Misz Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2024] VCC 1449 | |
REASONS FOR SENTENCE
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Subject:Criminal Law - Sentence
Catchwords: Failing to ensure the workplace was safe and without risks to health – crane warning system disabled by use of bulldog clip leading to a risk of crane being operated outside safety parameters – primary sentencing principle general deterrence – primary sentencing factor objective seriousness of breach – capacity to pay
Legislation cited: Occupational Health and Safety Act 2004.
Cases Cited: DPP v Frewstal Pty Ltd (2015) 47 VR 660; DPP v Vibro-Pile (Aust) Pty Ltd( 2016) 49 VR 676; AM Design and Construction Pty Ltd v The Queen [2018] VSCA 312; DPP v Heavy Mechanics Pty Ltd [2023] VSCA 69.
Sentence: $160, 000 fine with conviction
6AAA:$220, 000 fine with conviction
APPEARANCES: | Counsel | Solicitors |
| For the DPP | Ms F Holmes | Office of Public Prosecutions Victoria |
| For the Accused | Mr G Casement | Sladen Legal |
On 3 June 2019, a crane tipped over at a construction site in Dandenong South. The company responsible for the crane’s operation, Misz Pty Ltd (‘Misz’), has pleaded guilty to a single charge under s 26(1) of the Occupational Health and Safety Act 2004 (‘the OHS Act’), of failing to ensure, as a person who has to any extent the management or control of a workplace, that the workplace was, so far as was reasonably practicable, safe and without risks to health. The maximum penalty for this offence is $1,450,710.
Circumstances of the offending[1]
[1] The offending is set out in more detail in the Summary of Prosecution Opening for Plea (10 September 2024). I have also read and taken into consideration Submissions on behalf of the Director of Public Prosecutions (15 August 2024); Defence Outline of Plea Submissions (10 September 2024); Addendum Prosecution Submissions on Sentence (16 September 2024); and Further Defence Outline of Plea Submissions (16 September 2024).
In June 2019, Misz was engaged to undertake structural lifting works on an extension to a building on the Frankston-Dandenong Road in Dandenong South. This involved lifting and installing pre-fabricated steel structures which formed the roof of the extension.
On the morning of 3 June 2019, one of the directors of Misz, Zeljko Krajacic, drove Misz’s 60 tonne crane onto the site and around to a driveway at the rear of the building. The crane was set up on the concrete driveway (rather than on the adjoining soft and unstable ground). The prevailing weather conditions were windy. Wind can affect the safe operating parameters of a crane.
The builders had engaged a rigging company, Transilworks Pty Ltd (‘Transilworks’), to install the steel components of the extension. The owner of Transilworks, Gavrila Faur, discussed the set up and lift with Mr Krajacic. Two Transilworks riggers, John Ardellen and Alex Marc, assisted the installation.
Mr Faur and the two riggers completed the assembly of the steel roof structure on the concrete driveway near the crane. The structure was then hooked up to the crane. The site supervisor, Karl Hoffner, asked Mr Krajacic to lift the structure and advise how heavy it was. Mr Krajacic did so, and informed Mr Hoffner that it was too heavy for him to lift onto the roof.
After discussions, the structure was partially dismantled so as to reduce its weight and allow Mr Krajacic to lift it. As Mr Krajacic commenced the lift, the two Transilworks riggers were on a nearby elevated work platform (‘EWP’).
When the structure was nearly in place, the crane tilted to its right hand side, the boom of the crane made contact with the roof of the building, and the load crashed down onto the building, close to the EWP. Mr Krajacic had to crawl out of the crane’s cabin. That no-one was injured or killed, when they might easily have been, is a matter of pure luck.[2]
[2] The scale of the risk is evident from the photographs taken after the incident: Depositions, Exhibits 13 and 22.
Mr Krajacic later told the WorkSafe informant that a gust of wind had pushed the crane out of radius, and that it had slewed to the right.
During the recovery process, another WorkSafe inspector observed that an instrument in the cabin displayed a lift weight that would have been outside the crane’s safety parameters. The prosecution submits that this suggests that the crane may have been being operated outside its safety parameters, as further evidenced by the very fact that it tipped over. However, the prosecution accepts that it cannot prove this.
The inspector also observed that a bulldog clip had been used to disable a warning system in the cabin. There was a lack of evidence about precisely how this warning system operated, including whether it manifested in a visible or audible alarm. What is clear, however, is that the warning system did not prevent an operator from operating the crane outside its safety parameters, but was designed to warn them of the fact that they were doing so. The bulldog clip disabled the warning system such that it would not warn the operator if a lift exceeded the crane’s safety parameters.
I do not need to determine whether an operational warning system would have prevented the crane from tipping over on the day of the incident; and I would not, in any event, be able to do so, given the lack of evidence on matters such as:
a.Whether the crane was being operated outside its safety parameters at the time of the incident;
b.Whether the wind gust at the time of the incident was unforeseeable and whether it transformed what would otherwise have been a safe lift into an unsafe one;
c.Whether the warning system would have been triggered prior to the incident if it had not been disabled; and
d.Whether the operator would have been able to avoid the crane tipping over if the warning system had triggered.
However, by its plea of guilty, Misz has acknowledged that:
a.There was a risk that if the crane was not operated within its safety parameters, it could fall down, exposing persons in the workplace to the risk of death or serious injury by being struck or crushed by the crane, the load or by building damage.
b.The crane was fitted with a safety device warning system that indicated to the operator if the crane was being operated outside its safety parameters.
c.It was reasonably practicable for Misz to reduce the risk by ensuring that the warning system was not disabled.
d.At the time of the incident, Misz failed to adopt that measure, in that the warning system had been disabled with a bulldog clip.
Seriousness of the offending
The principles that apply to sentencing for OHS offences are well-established.[3] The first is that offences under the OHS Act are risk-based rather than outcome-based. In this case, I am sentencing Misz for the gravity of its failure to reduce the risk of its crane tipping over, not for the consequences (or lack of consequences) of that failure.
[3] See DPP v Frewstal Pty Ltd (2015) 47 VR 660; and DPP v Vibro-Pile (Aust) Pty Ltd (2016) 49 VR 676.
This can seem counter-intuitive for someone not familiar with this area of the law. A serious failure that has little or no consequences may merit a higher penalty than a minor failure that causes terrible consequences, even a death.
The primary sentencing purpose for OHS offences is general deterrence, particularly in cases such as this one where the offending involved a risk of death or serious injury. The primary sentencing factor is the objective seriousness of the offending (with subjective matters playing a subsidiary role):
a.The gravity of a contravention is determined by two factors: the seriousness of the breach (that is, the degree of departure from the duty); and the extent of the risk resulting from the breach;
b.The second of these factors – the extent of the risk – is a product of two further factors: the likelihood of the occurrence of a safety endangering event as a result of the breach; and the potential gravity of the consequences of that event.
In this case, the breach involved a deliberate disabling of a safety system. For that reason the offending involves a high degree of departure from the statutory duty. However, the evidence does not establish that the bulldog clip was used to disable the warning system on a permanent or regular basis. I will therefore sentence Misz on the basis that this was an isolated departure from its duty.
However, the defence did not offer any explanation as to why the warning system was disabled on the day of the incident. In the absence of such an explanation the obvious inference is that the warning system was disabled in order to allow the crane to be operated near to, at, or beyond its safety parameters, without the warning being triggered. That inevitably makes it a serious breach.
That said, the disabling of a warning system is not as serious, in my view, as the bypassing of, for example, an interlock or override device which actually prevents a machine from being operated in an unsafe manner.[4]
[4] As in Dotmar Epp v The Queen [2015] VSCA 241 (Maxwell P, Priest and Kaye JJA).
I also accept that the evidence does not suggest that Misz took a cavalier or corner-cutting approach to the lift in general. The crane was set up on an appropriate stable base; Mr Krajacic and others had discussions about how to carry out the lift safely; those others also had expertise and responsibility in ensuring that the lift was safe; and the weight of the structure was reduced before the lift was attempted.
I therefore find that the offending is in the lower half of seriousness for the (very serious) category of offences involving the deliberate disabling or bypassing of a safety system.
The extent of the risk resulting from the breach is harder to determine. I feel comfortable in finding that there must be a reasonable chance of a crane tipping over if it is operated outside its safety parameters; and a reasonably high chance of someone being seriously injured or killed if a crane does tip over.
It is more difficult to quantify the extent to which the risk of a crane falling over is reduced by an operational warning system. This is because it is unclear how reliable or effective the warning system was; whether the crane was fitted with any other safety devices that addressed the same risk; and because, even if the warning system was triggered, an operator would still be free to disregard it and continue to operate the crane outside its safety parameters.
Nevertheless, the point of the warning system was clearly to reduce the risk of the crane being operated outside its safety parameters (and Misz has admitted as much by pleading guilty to the charge as particularised), and it must therefore be assumed that an operational warning system would have reduced the risk of that happening, and therefore have reduced the risk of serious injury or death as a result of the crane tipping over.
Taking these matters as a whole, and notwithstanding the fact that no-one was injured as a result of the breach, I find that the level of seriousness of the offending was high, albeit not the highest level of seriousness.
Current sentencing practice
The prosecution referred me to two relevant comparator cases, both of which involved cranes and which were prosecuted in the Magistrates’ Court.[5] The prosecution acknowledged that neither case was factually on all fours with the offending in this case. The defence referred me to a third Magistrates’ Court decision involving a crane. [6]
[5] L.Arthur Pty Ltd (convicted and fined $20,000) and Imagebuild Group Pty Ltd (convicted and fined $24,000).
[6] Maxitrans Pty Ltd (Ballarat Magistrates’ Court, 18 January 2022, fine of $25,000).
I accept that these cases may reflect current sentencing practice in the Magistrates’ Court for cases such as this. However, while the identity of the sentencing court is not a sentencing factor – like cases should be treated alike regardless of which court is imposing the sentence – the fines imposed in these cases appear to me to be an order of magnitude lower than the fines typically imposed in this court or, more importantly, by the Court of Appeal for offending of comparable seriousness.
The fact that no injuries resulted from the breaches in any of those cases may explain why the cases were prosecuted in the Magistrates’ Court rather than in this court. However, given the risk-based nature of OHS offending that feature is not relevant to an assessment of the seriousness of the offending.[7] I will therefore sentence in accordance with what I understand to be the sentencing practice currently adopted in this court and by the Court of Appeal.
[7] Although it is not relevant to the seriousness of the offending, the fact that no-one was injured or killed in this case is still relevant when comparing the sentences imposed in different cases. This is because the impact on victims of the offending is not a factor I am required to take into account in this case (because there were no victims), unlike in many other sentences for offending under the OHS Act.
Subjective matters
Misz is the corporate trustee of the Krajacic Family Trust. It is a small crane hire business, established in 2015, which traded as Steel and Precast Erectors. The company’s directors are Mr Krajacic, and his wife Melissa Krajacic. Mr Krajacic operated the company’s only crane. Mrs Krajacic was admitted to practice as a solicitor in 2003.
Prior to the incident, the company had no convictions or WorkSafe involvement. This is to its credit. It was well regarded in the industry.[8] Nor, in the five years since the incident, has the company engaged in any further offending. There is little need, therefore, for specific deterrence.
[8] See three character references filed on behalf of the company.
Following the incident, the company’s insurance premiums substantially increased, and – with Mr Krajacic traumatised by the incident – the company sold the crane. Mr Krajacic now operates smaller cranes on a contract basis for others; and the directors have started a new tip trucking business, including purchasing a tip truck on finance.
The company provided some fairly limited (but unchallenged) information about its financial position:
a.From 2017 to 2023, the company had modest profits (or small net losses), with the exception of the year in which it sold the crane involved in the incident, in which it recorded a profit of $266,549;
b.The company is no longer trading; and
c.The company and the trust currently both have zero assets, as well as a $15,000 GST liability.
Although not (yet) in liquidation or administration, the company clearly has limited capacity to pay a fine. This raises the following principles:
a.The amount of a fine should be moderated to take account of a company’s capacity to pay. [9]
b.However, a company’s capacity to pay is not a dominant sentencing factor, and does not override the need for a fine capable of serving the purpose of general deterrence.[10]
c.If it is clear that even a moderated fine would not be paid, then I should effectively ignore the company’s current financial circumstances and impose the fine that would otherwise have been appropriate.[11]
[9] Sentencing Act 1991, s 52(1).
[10] DPP v Heavy Mechanics Pty Ltd [2023] VSCA 69 at [85] (Niall and Macauley JJA; Priest JA dissenting).
[11] R v Denbo Pty Ltd (Supreme Court of Victoria, Teague J, 14 June 1994); applied in DPP v Concord Group Pty Ltd [2019] VCC 1846 at [28] (Judge Lyon); and DPP v Bradbury Industrial Services P/L (under administration) [2023] VCC 1029 at [136]-[137] (Judge Rozen).
In my view, the main thing that stands in the way of the application of the third principle above is the assurance that counsel for Misz gave about the company’s intention to pay any fine that was imposed. Counsel told me, in effect, that as a practising solicitor, Mrs Krajacic – who was sitting behind him – would want a company of which she was a director to meet its legal obligations. I note that the Court of Appeal has previously taken similar assurances into account as a reason to moderate a fine. [12]
[12] Di Tonto v The Queen; AM Design and Construction Pty Ltd v The Queen [2018] VSCA 312 at [29]-[30] (Priest and Weinberg JJA).
In this case, the assurance was given to me in open court by an officer of the court (counsel) on the instruction of another officer of the court (Mrs Krajacic), who was present when the assurance was given. In those circumstances, I feel obliged to give her assurance significant weight. On the basis of those assurances, I will therefore moderate – and very significantly moderate – the amount of the fine I impose so as to reflect the company’s limited financial capacity.
That said, general deterrence remains a central sentencing consideration, and significant fines can still be imposed on companies with limited capacity to pay. In Di Tonto & AM Design, for example, the company was (like Misz) effectively a one-man operation; entered a very early plea of guilty; had very limited capacity to pay; was guilty only of a negligent breach (unlike Misz); and its breach did not result in any injuries. Nevertheless, the Court of Appeal considered that a fine of $190,000 was appropriate, accompanied by a $50,000 fine for the director.[13]
[13] Di Tonto v The Queen; AM Design and Construction Pty Ltd v The Queen [2018] VSCA 312 at [31] (Priest and Weinberg JJA). Even larger fines were imposed on small companies with limited capacity to pay in DPP v Heavy Mechanics Pty Ltd [2023] VSCA 69; DPP v Best Benchtops and Stone Pty Ltd [2022] VCC 2296; and DPP v Palladian Three Pty Ltd [2022] VCC 325.
In this case, Misz was co-operative with the WorkSafe investigation and pleaded guilty. By pleading guilty Misz has acknowledged that its conduct exposed people at the construction site that day to a serious risk to their health and safety, although it was apparent on the taking of the company’s plea that this was not an easy thing for Mr Krajacic to acknowledge.
I do not accept the defence submission that this was a “constructive” early plea; but I do accept that there were a number of issues that needed to be resolved before a plea agreement could be reached. Regardless of its timing, the plea saved the courts, witnesses, prosecuting agencies and the community as a whole time, money, inconvenience and uncertainty.
Orders
Had the company not pleaded guilty, I would have imposed fine of $220,000. Instead, I convict the company and impose a fine of $160,000.
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