Significant health and safety prosecution of former chief executive

29 April 2024

A hearing is underway in the Auckland District Court in relation to charges brought under the Health and Safety at Work Act 2015 (the HSW Act) against the former chief executive of Ports of Auckland Limited (POAL), Tony Gibson. This case is significant as it is the first time that a chief executive of a major New Zealand company has been personally charged with offences under the HSW Act in relation to a fatality.

Both Mr Gibson and POAL were charged in August 2021 with offences under the HSW Act. These charges related to the death of a port worker, Mr Pala’amo (Amo) Kalati who died on 30 August 2020 after being crushed when a container was dropped during a lifting operation.

POAL was charged as the PCBU (person conducting a business or undertaking). It pleaded guilty to the charges and was sentenced on 1 December 2023 to a fine of NZ$500,000. Mr Gibson pleaded not guilty and the trial, which began last week, is expected to last several weeks.

Mr Gibson was charged by Maritime New Zealand (Maritime NZ). Maritime NZ has power to bring prosecutions under the HSW Act in certain circumstances. In this case the matter falls under Maritime NZ’s jurisdiction as the workers in question were working on board a vessel when the incident occurred.  Maritime NZ is the regulator for health and safety incidents that occur on board ships as places of work, whereas WorkSafe is the regulator for land-based workplaces.   

Maritime NZ charged Mr Gibson with offences under sections 48 and 49 of the HSW Act. These sections relate to offences of failing to comply with a duty that exposes an individual to the risk of death, serious injury, or serious illness (section 48), and failing to comply with a duty under the HSW Act (section 49). A conviction for Mr Gibson under section 48 would carry a maximum fine of NZ$300,000, with the maximum fine under section 49 being NZ$100,000. 

The maximum fines are at these levels as Mr Gibson has been charged as an “officer” under the HSW Act. The term “officer” is defined in section 18 of the HSW Act and covers company directors, partners in a partnership, and persons occupying positions in body corporates that are comparable to that of a company director. The definition of “officer” also includes any other person in an organisation who occupies a position that allows the person to exercise significant influence over the management of the business or undertaking, such as a chief executive. However, the definition of “officer” expressly excludes people who merely advise or make recommendations to officers.    

Under the HSW Act, officers have a personal obligation to exercise “due diligence” to ensure that the organisation complies with its duties and obligations under the Act. When assessing whether Mr Gibson complied with his due diligence obligations as an officer, the Court will need to consider whether Mr Gibson exercised the care, diligence and skill that a reasonable officer would exercise in the same circumstances, including by taking into account the nature of POAL’s business, Mr Gibson’s position, and the nature of the responsibilities undertaken by him. 

In accordance with section 44(4) of the HSW Act, this assessment will also include considering whether Mr Gibson took reasonable steps to:

  1. acquire and keep up-to-date knowledge so that he could understand and test the information presented to him, and make informed decisions;
  2. understand the nature of POAL’s operations, the risks arising from those operations, and control measures in place;
  3. ensure POAL has appropriate resources and processes to eliminate or minimise health and safety risks;
  4. monitor POAL’s performance in relation to health and safety;
  5. ensure the PCBU complies with its legal obligations, regulations, codes of practices etc; and
  6. verify POAL’s performance (including reviews, audits, and safety observations).

While the outcome of this hearing will necessarily relate to the particular facts before the Court, the case is likely to provide some guidance as to the scope of the due diligence duty owed by officers under the HSW Act and how this interacts with the duties owed by the PCBU. 

Although the HSW Act has now been in force for eight years, limited guidance has been provided by the Courts on these issues given the nature of the matters that have proceeded to trial.  While the decisions relating to the Whakaari eruption provided guidance on some aspects of the HSW Act, they contained very limited guidance in relation to the due diligence duty. In the case of Whakaari, the Court noted that the evidence before it in relation to the three directors of Whakaari Management Limited (Andrew, James and Peter Buttle) was insufficient to prove the charges against them, noting that the charges needed to be proven against each of them individually. The impact of the Whakaari decisions was addressed in our recent health and safety webinar, which can be viewed here.

While there has been limited New Zealand authority on the scope of due diligence duties, a recent decision from the District Court of New South Wales (NSW) in Australia, SafeWork NSW v Miller Logistics Pty Ltd [2024] NZSWDC 58 (referred to by Mr Gibson’s defence counsel), considered an officer’s due diligence duties under an equivalent provision in NSW. In that case, SafeWork NSW (the NSW equivalent of WorkSafe) alleged that the sole managing director of the company breached his due diligence duties following an incident involving a worker being struck by a forklift. In that case, the Court held that although there had been a failure by the PCBU, the officer had not failed to exercise due diligence. In particular:

  • The managing director was not a “hands-off” director in relation to work health and safety. Among other things, the managing director had employed a health and safety manager (who kept the managing director informed of various health and safety related matters), he kept abreast of health and safety matters, and he never pushed back in relation to spending money on these matters. 
  • The Court held that the managing director “cannot know everything that is going on at any given moment” and that “[t]o run a corporation there must be a level of delegation”.

Whether the Court reaches a similar conclusion in this case is something that we will be watching with interest.

Given its significance, we will be following developments in this case and will provide further updates on it when available.

If you have any questions about the matters raised in this article, please get in touch with the contacts listed or your usual Bell Gully adviser.

Disclaimer: This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.