Keating v Fry [2012] WASC 15

On 9 October 2007, Mr Luke Aaron Murrie, an employee of D&G Hoists and Cranes Pty Ltd (D&G) was fatally injured when an L 68 pack of crane components slipped while it was being lifted and repositioned.

The company was prosecuted under the provisions of the Occupational Safety & Health Act, convicted and substantially fined.

The directors, Mr Keating and Mr Decesare, were also prosecuted and convicted in proceedings before a Magistrate. The appeal to the Supreme Court concerned the conviction and fines imposed upon the directors.

The conviction was appealed, principally on the grounds that the directors did not know that an unsafe system of slinging the load was being used. The evidence before the Magistrate had identified two methods of slinging such a load, one of which was unsafe. The directors had claimed that the method which was supposed to be used was a safe method. However, on the occasion in question, an unsafe method of slinging had been used and resulted in Mr Murrie's death.

The case for the prosecution was that even if the directors did not specifically know that the unsafe method of slinging was being used at the time, they knew, or ought to have known, that the unsafe method was used from time to time and that they had been negligent in failing to take steps to improve work place safety to avoid the risk.

Justice McKechnie concluded that the Magistrate had not been in error in convicting the directors on the evidence and dismissed the appeal against the conviction.

The company had been fined $90,000 and each of the directors $45,000. The penalties were also appealed on the grounds that they were manifestly excessive.

Justice McKechnie noted that the penalty imposed on the company was 22.5% of the total possible penalty and, given the seriousness of the offence, he was satisfied that it was not manifestly excessive.

As far as the penalties against the directors were concerned, His Honour noted that the Magistrate had applied the same arbitrary percentage (22.5%) in determining the penalty to be imposed upon them and he considered that such an approach was flawed.

Whilst the fines themselves were not manifestly excessive, His Honour found that the Magistrate was wrong to conclude that the fines could not be apportioned as a matter of discretion. As a result, he found that the fines should be set aside and determined that a fine of $90,000 should have been apportioned as follows:

  • D&G - $70,000
  • Mr Decesare - $10,000
  • Mr Keating - $10,000

The case illustrates clearly the consequences for a company and its directors of placing employees at risk in circumstances where there is some degree of neglect on the part of the company.

The fact that directors are also at risk of conviction for an offence on the basis of imputed knowledge is equally significant. In this case, the consequences in terms of penalty have been ameliorated to some extent by the appeal court's decision. However, in future cases, there is no guarantee that a Magistrate's approach at first instance will reflect that moderation.

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