WorkCover Authority of NSW v Karemen Pty Ltd

[2016] NSWDC 201

District Court

New South Wales

Medium Neutral Citation:	WorkCover Authority of NSW v Karemen Pty Ltd [2016] NSWDC 201
Hearing dates:	29 August 2016
Date of orders:	02 September 2016
Decision date:	02 September 2016
Jurisdiction:	Criminal
Before:	KEARNS DCJ
Decision:	The defendant is convicted. I impose a fine of $75,000 with a moiety to the Prosecutor. The defendant is to pay the Prosecutor’s costs as agreed or assessed.
Catchwords:	Sentencing; foreseeability; defective vehicle hoist; fatality; mid-range of objective seriousness; Fines Act 1996
Legislation Cited:	Work Health and Safety Act 2011 Crimes (Sentencing Procedure) Act 1999 Fines Act 1996
Category:	Sentence
Parties:	WorkCover Authority of New South Wales (prosecutor) Karemen Pty Limited (defendant)
Representation:	Counsel: Mr P Ginters, instructed by WorkCover NSW, appeared for the prosecutor Ms L-C Hutchinson, instructed by Koffels, appeared for the defendant
File Number(s):	2015/243575

Judgment

THE CHARGE AND PLEA

1. Karemen Pty Ltd is charged with an offence under s32 of the Work Health and Safety Act 2011 (the Act) in that on 16 April 2014, it was under a duty under s 19(1) of the Act and it breached that duty. Karemen has pleaded guilty.

THE EVIDENCE

2. The Prosecutor relied on a tender bundle, Exhibit PX 1. The defendant relied on affidavits of Ian Hooper of 23 August 2016, Tony Lombardo of 29 August 2016 and Rosetta Lombardo of 29 August 2016.

THE FACTS

3. Karemen is a family company owned by Anthony (Tony) and Rosetta (Rosa) Lombardo. It is effectively run by Tony Lombardo. For some time before 16 April 2014, its only employees were Tony Lombardo and Carl Sollazzo. Its business was motor vehicle repairs.

4. On 16 April 2014, Mr Rached brought his vehicle in for service. In order to repair the exhaust system, the vehicle was placed on a hoist and raised. The vehicle hoist was a Molnar Two-Post Hoist. What happened is described by Mr Rached as follows:

Carl put my car on the hoist and lifted it up. It was about 190cm to 2m off the ground. Carl was working on my car for about 5 minutes, he took two screws out. He went to take the third one off, he was using a very long tool to unscrew the screws.

The car started the move slowly back towards the rear passenger wheel side becoming unbalanced on the hoist. Carl used his right hand to grab onto the wheel axel to level the car as Carl pulled it the car came down fast. Carl was still under the car. He was hit by the front driver’s side bumper area on the back of his neck. The hit made him fall to his knees bent over.

[Agreed Statement of Facts, [14], Exhibit PX 1, tab A.]

5. Mr Sollazzo was fatally injured.

6. Mr Sollazzo was a qualified motor mechanic employed by Karemen for about 12 years. He carried out his duties under the direction of Mr Lombardo. The hoist was used once or twice daily by both Mr Sollazzo and Mr Lombardo.

7. The hoist had four supporting arms that could be moved into position underneath the body of a vehicle to support the vehicle whilst it was off the ground.

8. The arms were each equipped with a safety locking mechanism to prevent movement of the arms when positioned.

9. On 17 April 2014, inspection revealed that all four supporting arms were able to be moved backwards and forwards by hand despite being in the locked position. Australian Standard AS/NZS 1418.9:1996 Cranes (including hoists and winches) – Vehicle hoists stated that supporting arms of hoists shall incorporate locks to prevent movement of the arms once positioned. The hoist’s Manual recommended checks be conducted daily on the hoist’s safety mechanisms to ensure they were functioning properly. Daily checks of the hoist’s safety locking mechanisms would have revealed that they were not operating properly.

THE SENTENCING PROCESS

10. I bear in mind several matters. I bear in mind the purposes of sentencing as enumerated in s 3A of the Crimes (Sentencing Procedure) Act 1999. I bear in mind the purposes of the Work Health and Safety legislation, in particular ensuring the safety, health and welfare of workers and others on workplace premises. I bear in mind any relevant aggravating and mitigating factors, including any mentioned in s 21A of the Crimes (Sentencing Procedure) Act so far as any of those may be relevant.

11. I start my analysis with a consideration of the gravity of the offence. This is determined in part by the foreseeability of the risk of injury, the foreseeability of the consequences of the risk coming home and the measures available to avoid the risk.

12. The risk in this case was plainly foreseeable and so was the incident. It was plainly obvious that if the arms of the hoist were capable of movement, the load on them was capable of shifting and falling. The arms were easily capable of movement by hand even when in the locked position. The Standard and the Manual referred to earlier support foreseeability. Further, the Government of Western Australia in 2013 had issued a safety alert in respect of a fatality resulting from a vehicle falling from a two post hoist. One of the contributing factors was “Not all the support arms’ safety locking mechanisms were working” (Exhibit PX 1, tab 6A).

13. The consequences of the risk coming home in this case were plainly foreseeable and that included fatality.

14. Measures were readily available to Karemen to eliminate the risk. They are set out in [8] of the Summons as follows:

(a)   Providing the hoist with the locking mechanisms on its supporting arms in a condition such that they locked the supporting arms of the hoist into position when workers were working underneath a motor vehicle that was located on the hoist;

(b)   maintaining and servicing the hoist by:

i.   conducting daily checks on the hoist’s safety mechanisms, in particular the locking mechanisms on the supporting arms of the hoist, to ensure they were operating properly;

ii.   repairing any faults found during daily checks of the hoist prior to the hoist being used;

(c)   not permitting workers to use the hoist if the hoist’s safety mechanisms, in particular the locking mechanisms on the supporting arms of the hoist, were found to not be operating properly.

15. This matter falls in the mid-range of objective seriousness.

16. The injury was substantial and that is an aggravating factor (s 21A(2)(g) of the Crimes (Sentencing Procedure) Act).

17. Deterrence needs to be taken into account. This was a small business where the relationship between employee and employer was a close relationship. The incident has had a profound effect on Mr and Mrs Lombardo. One can have considerable sympathy for them and the defendant in this situation, but that should not impact on the need for general deterrence to be considered. It is not as if such enterprises, and there are several, are to be exempted from the need for deterrence. It does, however, play out in specific deterrence and, whilst I take that into account, it is ameliorated by this and matters I mention below.

18. The incident, tragic as it is, has affected Mr and Mrs Lombardo significantly and particularly affected Mr Lombardo in a way that he is particularly cautious now about safety measures.

19. Following the incident, WorkCover issued Karemen with an improvement notice requiring it to cease use of the hoist until a full inspection by a competent person was undertaken and the hoist declared safe. Inspection was done by Epsco Pty Limited. After the incident, Karemen undertook a number of general safety features including additional safe operating instruction signs at the hoist site and other matters set out at [46] to [48] of Mr Lombardo’s affidavit.

20. Mr Hooper’s affidavit sets out detail of Epsco’s inspection. To a large extent it does not assist in this sentencing process. The critical facts going to the cause of the incident were agreed and they were that all four supporting arms could be moved by hand despite being in the locked position and that allowed the vehicle to move and fall. Whatever else Mr Hooper found and whatever he did can only go to subjective considerations such as steps taken by the defendant post incident to rectify the problem and perhaps related and other problems. To the extent that any part of Mr Hooper’s affidavit is inconsistent with the agreed facts, I ignore it. The affidavit reveals annual inspections of the hoist by Mr Hooper since the incident.

21. Karemen has co-operated with the Prosecutor in the investigation of the incident and the prosecution. It accepts its responsibility for the incident and has expressed remorse. Consistent with this are the assistance offered and provided in respect of funeral arrangements and assistance to family members of Mr Sollazzo. Also consistent with that is the defendant’s guilty plea entered at a relatively early time. That plea also entitles the defendant to a discount on what would otherwise be the appropriate penalty. I consider a discount of 25% to be warranted.

22. The defendant has no prior convictions. In this regard, I note that Mr Lombardo has worked in the industry since 1971. The business run by the defendant, known by Tony’s Mechanical Repairs, has been operating since 1981 or 1982. Accordingly, it is a good record.

23. Mr Lombardo’s affidavit discloses that he bought the hoist in 1985 or 1986. He discloses some records of annual services in 1989, 1991, 1992 and 1998 and 2005. Since 2000, he says that he carried out service himself thinking he could do it properly having observed specialist servicemen do it prior to then. Christmas shut-down was a time when he did service and Mr Sollazzo did service with him then.

24. His affidavit sets out safety systems at a general level that were in place before the incident.

25. Paragraphs 24 and 25 of his affidavit contain the following:

Every time that we used the hoist, before loading a car onto it, Carl or I would test to see that the safety locking mechanisms on the arms were working. We would do this by squeezing the toggles to move the arm into position, releasing the toggles and seeing whether or not the arm “locked” into place. I personally did this every time I loaded a car onto the hoist, and I saw Carl doing the same thing. That is something I showed Carl how to do when he started working with us. The reason I can say with confidence that I did this check every time I loaded a car is that you had to move the arms into position before the car was put onto the hoist anyway, so moving each arm when in the locked position to check that it was stable first before putting the car underneath the arm only took an extra minute.

There was never a time prior to the accident that the arms moved when the toggles were in the “locked” position, either when I was using it or when I saw Carl using it.

26. It is difficult to know what to make of those paragraphs in light of the following agreed facts:

Daily checks of the hoist’s safety locking mechanisms as per the manual would have revealed that they were not operating properly.

and

The condition of the hoist’s safety locking mechanisms as inspected after the incident indicated that they must have been in poor condition for some time.

[ASOF [33], [34], Exhibit PX 1, Tab A]

27. My deliberations have proceeded on the basis of the agreed facts.

28. The defendant seeks relief under the Fines Act 1996.

29. There is no doubt that the defendant is barely managing to trade. It has liabilities over $100,000 in excess of its assets. In large measure the liabilities are loans owed to Mr and Mrs Lombardo who need to keep putting money into it. Mrs Lombardo’s affidavit states realistically that they do not expect to get back the money the company owes them. It barely makes a profit on its business. In the 2014 financial year, it made a loss of about $7,000. In that year, its salaries and wages totalled about $62,000. Plainly they were payments to Mr Lombardo and Mr Sollazzo. In the 2015 financial year, its trading statement reveals a profit before tax of about $22,000. Its salaries and wages that year were about $32,000. That is consistent with Mr Lombardo’s evidence about his weekly wage. The wages for that year are the wages paid to Mr Lombardo alone since the death of Mr Sollazzo. The company is barely managing to survive.

30. I bear in mind the maximum penalty in this case is $1,500,000. I note however that the maximum can be applied only in the most extreme of cases. Weighing heavily with me are the objective seriousness of this matter and the need for deterrence. Also weighing heavily is the financial position of the company. That is such that I propose imposing a fine which is meaningful, but is considerably less than would otherwise be the case. In the circumstances, the fine I propose is $100,000 reduced by 25% to $75,000.

ORDERS

31. The defendant is convicted.

32. I impose a fine of $75,000 with a moiety to the prosecutor.

33. The defendant is to pay the prosecutor’s costs agreed in the sum of $30,000.

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Decision last updated: 02 September 2016