The recent health and safety decision, WorkSafe New Zealand v Mount Somers Sand Ltd [2021] NZDC 16270 will be of interest to all organisations managing risks to health and safety in-house, and to those who may wish to seek costs in the event of an unsuccessful prosecution by a regulatory agency such as WorkSafe.
Background
Mount Somers Sand Ltd (MSSL) is the operator of a small silica sand quarry. Its operation included extracting silica sand from a single high quarry face. The method of extraction involved collecting fallen sand from a trench at the toe of the face with a long-reach excavator and allowing additional sand to collapse gradually into the trench. MSSL’s two directors, who have significant experience in the extractive industries, were the only people who worked at the quarry face. Those individuals had conducted a hazard and risk assessment on behalf of MSSL and implemented a series of controls to manage slope-failure hazards. No documented system was used.
WorkSafe charged MSSL with a breach of s 36(1)(a) of the Health and Safety at Work Act 2015 (the HSWA) for failing to ensure, so far as is reasonably practicable its workers were not exposed to the risk of engulfment when extracting sand. WorkSafe claimed that MSSL had breached this obligation by failing to obtain a geotechnical report from an external person that was suitably competent and qualified to endorse its extraction method. WorkSafe formed its view after two brief visual assessments and their knowledge of the industry generally.
MSSL pleaded not guilty. In support of its defence, it engaged an external geotechnical engineer who inspected the site. That expert concluded that the extraction method implemented by MSSL was safe. WorkSafe did not challenge the expert’s conclusions but proceeded to trial on the basis that MSSL’s duty was to obtain that external geotechnical advice before it undertook extraction so it could be assured its approach was safe.
The District Court’s decision
Judge Maze dismissed the charge on the basis there was no case to answer. The Judge held that the primary duty at s 36(1)(a) required a PCBU to have a “competent person” assess hazards and risks and design an adequate method for extraction of sand. The Judge went on to say:
There is no basis to insert into that a requirement that the assessor not be an employee of the PCBU, or that he/she had an engineering degree, or that he/she was not linked as a contractor to the PCBU. … There is no basis in the wording of the Act to allow me to interpret that as a legal requirement for an engineer’s report.
The Court went on to find that the individual who conducted MSSL’s hazard and risk assessment was properly qualified to conduct it. It did not matter that he was not an engineer or that he was internal of MSSL.
Additionally, the Court found that there was no evidence that:
- The risk assessment was inadequate or flawed;
- The method of work was inadequate to deal with the actual hazards and risks; or
- That work occurred which did not conform to MSSL’s work method;
accordingly, that MSSL failed to comply with its s 36(1)(a) duty.
Indeed, the conclusions drawn by MSSL’s expert were the same as those of MSSL in relation to the hazards and risks at the excavation site.
The Court found there was no evidence that MSSL failed to comply with its s 36(1)(a) duty and dismissed the charge as it had effectively established its innocence.
Costs application
Following the Court’s decision to dismiss the charge, and a failed application by WorkSafe to amend the charge two months before trial, MSSL applied to recover a contribution to its legal costs from WorkSafe under the Costs in Criminal Cases Act 1967.
Costs are only rarely awarded in criminal cases and even when they are they must overcome a high threshold in order to exceed the outdated scale of costs prescribed in that Act.
Judge Maze held both that a costs award against WorkSafe was “entirely justified” and that an award in excess of the scale was warranted:
I am satisfied the charge ought never to have been laid and, once brought, it ought to have been withdrawn as soon as practicable, as on any objective assessment it should have been obvious the necessary evidence to prove the charge was not available. Costs in excess of the scale are necessary and justified to provide a just and reasonable contribution to MSSL’s actual legal costs.
Costs were also recoverable in relation to WorkSafe’s failed application to amend the charge which the Court held would be “at that date an abuse of process”.
The Judge was critical of WorkSafe’s failure to see that it did not have a valid case and described its decisions to reject MSSL’s proposals for resolution as “negligent”.
The Judge accordingly awarded costs comprising: a contribution to its costs for the period before WorkSafe was provided MSSL’s expert report; indemnity costs following that date; full expert costs; and disbursements. The total costs awarded were approximately $158,000.
Comment
The District Court’s decision on the dismissal application reiterates that the primary duty of care is not prescribed and that in certain circumstances it may be acceptable for a PCBU’s to adopt an approach that is not documented or strictly in accordance with standard industry practice or guidance.
The decision also confirms that risk and hazard assessments do not need to be carried out by someone external to the PCBU so long as the person conducting the assessment is suitably qualified and competent to do so.
It is understood that this is the first time a charge laid by WorkSafe has been dismissed on the basis there was no case to answer following trial.
The costs awarded against WorkSafe are substantial and unprecedented. This decision should act as a reminder that regulators must carefully review the evidence collected during an investigation to ensure that there is indeed an evidential (and legal) basis on which charges should be laid and, subsequently, pursued.
Duncan Cotterill Partner Olivia Lund and Associate Sean Brennan both acted for MSSL advising on strategy in relation to the prosecution, and conducting the trial, the application to dismiss the charge and the successful application for costs.
Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.
