This case note has been taken from the recently published second-edition of a Guide to ACT Strata Law. A physical copy of the full text can be purchased here.
The defendant (the Owners) owned and controlled the common property of a strata title industrial complex at a site in Berkeley, NSW (the site). On 12 June 2020 a damaged gate at the site fell and fatally crushed Mr Jose Martins.
Maluko Pty Ltd (Maluko) was a person conducting a business or undertaking (PCBU) at the site. The site was an industrial complex comprised of eight units, each occupied by a separate unit owner or tenant. Maluko initially owned and built the industrial complex at the site in approximately March 2017. It then sold off the units but leased Unit 5 itself.
Maluko’s business or undertaking involved building and concreting services. Maluko employed approximately five workers, including Mr Martins and Mr Steven Ferreira. Mr Ferreira was Maluko’s manager and sole director.
The site was managed and controlled, in part, by the Owners.
Pursuant to ss 106(1) and (2) of the Strata Schemes Management Act, the Owners had duties to properly maintain and keep in a state of good and serviceable repair the common property at the site and to renew and replace any fixtures or fittings comprised in the common property.
In 2019 the Owners executed an agreement appointing Chris Darby Strata Pty Ltd (Darby) as the strata managing agent for the site. The agreement gave Darby complete authority to effect repairs at the site, maintain the common property and engage qualified people to carry out repair work at the site.
A perimeter fence was built around the site and included a large heavy metal custom-built sliding electric gate (the gate). The gate was part of the common property at the site, so the ownership of the gate vested in the Owners.
On the night of 4 June 2020, a van collided with the gate at high speed. The gate remained upright but was bent out of shape, partially pulled off its track, and disconnected from its electric motor. As a result of the collision the gate was at a 30-degree angle and was inoperable. The NSW Emergency Services attended to the site and placed warning tape around the gate and the damaged guideposts.
Following the collision, the gate was not repaired, replaced, made safe or otherwise attended to.
On 5 June 2020, a number of occupants within the site undertook makeshift repairs to the gate. These repairs resulted in the gate being able to be operated manually. When operated manually the gate presented a risk of falling as a result of moving past the displaced stopper.
At approximately 5.45am on 12 June 2020, Mr Martins arrived for work at the site. Mr Martins’ usual duties involved him opening the gate and Maluko’s workshop before the arrival of the other workers.
While Mr Martins was attempting to open the gate, the gate became unstable and fell onto him. The gate pinned Mr Martins to the ground at the entrance to the site until other workers arrived about 15 minutes later and lifted the gate off him.
Mr Martins sustained fatal crush injuries as a result of the incident.
The Owners reported the damaged gate to Darby on the morning following the collision. The strata manager received approval on behalf of the Owners to arrange repairs to the gate and fence. That same morning on 5 June 2020, the strata manager issued a work order to iAutomate Gates and Doors to repair the damage, but Darby did not arrange for the gate to be repaired or replaced as a matter of urgency.
Neither Darby nor the Owners carried out or otherwise arranged for an immediate risk assessment to be conducted for the damaged gate. Neither was the gate locked out or otherwise removed from service following the damage.
The Owners did not remove the gate from service or post a sign to the effect that the gate was not operational pending its full repair or replacement. Nor did the Owners take any actions to prevent the manual operation of the gate, including using signs to the effect that the gate was not to be operated manually until it was fully repaired or replaced.
Mr Cameron Petrovski affirmed an affidavit on 17 June 2024. Mr Petrovski was the director of CMG Air Pty Ltd (CMG Air) which was the owner of a unit in the Owners’ strata. CMG Air and the owners of the other seven units of the strata complex form the owners corporation that is the defendant in these proceedings.
Mr Petrovski was authorised to make an affidavit on behalf of the Owners. All of the owners had read Mr Petrovski’s affidavit.
On behalf of the Owners, Mr Petrovski was “very sorry that the body corporate contravened its duty”. Mr Petrovski acknowledged that the Owners, “as a person with a degree of management and control of the premises [..]failed to comply with its duty to ensure the premises was without risks to safety.”
Mr Petrovski said that the Owners “is regretful that it did not take the steps set out in the Amended Summons to ensure the strata complex was without risk to safety, and that Mr Martins suffered fatal injuries.”
The Owners never anticipated such an incident occurring. Mr Petrovski said that prior to the incident, the Owners did not understand that they could be liable for breaches of the WHS Act.
The ownership of the strata units has not changed since 2017. Mr Petrovski listed the owners of each unit in the strata plan. The Owners do not employ any person on site to manage the common property.
Under the Strata Management Agency Agreement, the Owners delegated to Darby “full authority with no limitation for effecting repairs to and maintaining common property or engaging appropriately qualified tradespersons to undertake standard work orders”. Repairing the damaged gate was a standard work order as it was construction work with no requirement to work above three metres.
Prior to the incident, the Owners “relied heavily” on Darby to meet its obligations under the strata laws and to attend to any repair and maintenance issues. Each unit owner largely dedicated their time to running their business.
Before the incident, the Owners had found Darby to be “generally responsive to fixing any reported issues.”
Mr Petrovski said that before the incident, Darby had not provided the Owners with any guidance or information about their responsibilities under the WHS Act in relation to the common property.
Mr Petrovski said that none of the Owners turned their minds “to the issue of the gate falling and causing a serious risk to health and safety”.
During the offence period, the Owners held an insurance policy that was meant to cover legal expenses incurred in WHS matters up to an amount of $50,000 with an excess of $1,000. Soon after this prosecution commenced, the Owners made a claim on this policy which was not responded to in a timely manner. Following complaints to regulatory agencies, on 24 April 2024 the underwriters responded to the Owners, declining the claim for defence costs under the policy.
Following the incident, the Owners cooperated with SafeWork’s investigation which included complying with statutory notices and the Owners making themselves available to answer questions and provide information.
The Court findings about the defendant’s level of culpability was based on:
- The risk of the gate falling was foreseeable.
- The likelihood of the risk occurring was significant.
- The potential consequences of the risk were serious injury or death.
- There were simple no-cost steps available to eliminate or minimise the risk.
- There was no burden or inconvenience involved in those steps.
- The death of Mr Martins was caused by the breach of a safety duty by the Owners.
- 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.
- 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 default of other parties (Maluko, which had already been sentenced, and Darby, which has pleaded guilty but is yet to be sentenced) made a significant contribution to the creation of the risk and the death of Mr Martins. However, the Owners 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.
- This case is not of the usual type which comes before the court, where a PCBU conducting a for-profit business creates or ignores a risk to workers engaged or controlled by it.
- The Owners did report the damage to the gate promptly to the strata managing agent and did follow up the agent to have the gate repaired.
The Court found that the level of culpability of the Owners was in the lower end of the mid-range.
Maluko was also prosecuted for a breach of its health and safety duties arising under the WHS Act relating to the same incident. Darby was also prosecuted, and has pleaded guilty, but is yet to be sentenced.
The following factors lead the Court to conclude that the Owners were less culpable than Maluko:
(1) Maluko constructed the industrial units and the gate, so it had a unique insight into how the gate worked.
(2) Maluko was the employer of Mr Martins. Maluko knew that Mr Martins used to arrive at work early each morning and open the gate. Maluko knew that Mr Martins had manually opened the gate more than once in the days prior to the incident.
(3) Mr Petrovski and other owners were not aware that Maluko was causing the gate to be opened each day. All they saw was the gate in an open position when they attended the site.
(4) The Owners did promptly report the damage to the gate to its strata managing agent, with a request for the damage to be repaired.
The Court orders were:
(1) The Owners – Strata Plan No 93899 was convicted on 5 July 2024.
(2) The appropriate fine is $300,000 but that will be reduced by 25% to reflect the early plea of guilty.
(3) Order The Owners – Strata Plan No 93899 to pay a fine of $225,000.
(4) Order that 50% of the fine is to be paid to the prosecutor.
(5) Order The Owners – Strata Plan No 93899 to pay the prosecutor’s costs agreed in the amount of $40,000.
This is general information and should not be considered to be legal advice. You should obtain legal advice specific to your individual situation.
Author: Christopher Kerin