HSWA – Officer Duties

On 30 August 2020, Tala’amo Kalati (a POAL lasher) died when hit by a container that fell from a crane. He was working within an “exclusion zone” as directed by a POAL employee.

Maritime New Zealand (MNZ) charged POAL (PCBU) with two offences under s 48(1) Health and Safety at Work Act 2015 (HSWA); POAL pleaded guilty. Separately, MNZ charged CEO Mr Gibson as an officer under s 48 HSWA for breaching his s 44 duties.

MNZ alleged Mr Gibson failed to exercise the due diligence of an officer to take reasonable steps to:

1. ensure POAL used appropriate resources and processes regarding:
   (1) exclusion zones, and
   (2) lashing coordination; and
2. verification the use and provision of [the processes at (a) and (b)].

After a seven-week trial – which focused extensively on POAL’s systems as well as Mr Gibson’s reliance on senior management – Judge Bonnar convicted Mr Gibson on allegations 1(a) and 2 (as it related to the processes at 1(a)). He was acquitted on 1(b) and 2 (as it related to the processes at 1(b)). Mr Gibson was sentenced to a $130,000 fine (based on an assessment of high culpability) and ordered to pay $60,000 in prosecution costs.

The District Court declined to follow the approach in Doble, an Australian decision released shortly before the trial began.

Mr Gibson appealed against both conviction and sentence.

Mr Gibson advanced seven grounds against his conviction, including in relation to:

1. the prosecution’s reliance on repealed Australian cases with a reverse onus;
2. the lead prosecution expert evidence including reliance on a “paper-based” review rather than investigation; and
3. focusing on “ultimate responsibility” and “systems leadership”—concepts not in s 44 HSWA— which it was argued effectively made Mr Gibson a proxy for POAL’s failings.

The sentence appeal argued the fine was manifestly unjust.

The High Court made clear that PCBU failures are only background details and do not form part of the element of the charge against an officer.

Justice Gault emphasized:

It is important not to treat a senior officer as a proxy for the PCBU by conflating the PCBU’s failure … with the separate reasonable steps assessment required for an officer.

The prosecution’s reliance on older Australian cases with a reverse onus was described as a “distraction” given the statutory differences.

Gault J also agreed Doble involved a close statutory equivalent and correctly focused on the reasonableness of steps taken and reliance on advisors. MNZ’s submission (and the District Court’s finding) that Doble was incorrectly decided was called another “distraction”.

Gault J affirmed s 44 HSWA essentially involves an evaluative factual assessment. In technical terms: “it depends”. The decision provides limited assistance to officers wanting practical guidance around what exactly they need to do to meet their legal duty. However, it does provide welcome clarification on the legal test for due diligence obligations.

Gault J recorded that evidence of common practice among equivalent officers is relevant to, though not determinative of, what a reasonable person would do.

Gault J broadly accepted that:

1. an officer cannot be expected to know everything occurring in a complex business;
2. delegation is permissible; it must be proven that reliance on staff expertise was unreasonable;
3. the totality of the officer’s conduct should be assessed;
4. providing ample resources for health and safety and taking an active interest are evidence of diligence; there is no obligation to micromanage;
5. evidence of common practice of officers in equivalent circumstances may be relevant, but not determinative, to assess what a reasonable person should have done; and
6. evidence of what an officer was doing across the entire organization is relevant to the assessment (and the District Court had erred in treating this as irrelevant).

The Court confirmed that being a “responsible” officer should not lead to greater risk of liability than being irresponsible, a concept “entirely antithetical to the purposes of HSWA”.

The High Court stated that by charging as they did, the prosecution accepted Mr Gibson otherwise complied with his due diligence obligations.

Gault J also departed from the District Court on several evidential findings. For example, he:

1. found the Judge went too far in criticising Mr Gibson’s reliance on his Senior Manager;
2. considered the reference to a “culture” of non-compliance went too far;
3. rejected prosecution characterisations of Mr Gibson as “blind to obvious red flags” who “failed both at being proactive and on follow-through” and lacking “systems leadership”;
4. found the prosecution had understated Mr Gibson’s dedication, achievements and positive steps he took in additional to the Covid-19 burden he faced;
5. accepted that no resource constraints were placed on health and safety under Mr Gibson’s management;
6. did not agree that Mr Gibson’s focus was on people leadership to the exclusion of system improvement and health and safety; and
7. identified a number of positive steps that had been taken including various initiatives directed at critical risks.

The key question was whether a reasonable officer in the same circumstances would have taken further steps.

The High Court mostly agreed with the legal principles advanced on Mr Gibson’s behalf, but applying those principles did not change the outcome.

To grant the appeal, the Court required evidence of a miscarriage of justice. It found:

1. the Judge had not fundamentally conflated the duties of the PCBU and an officer;
2. the Judge was entitled to accept the thrust of expert evidence which was that Mr Gibson (despite being dedicated, conscientious and diligent), had not taken reasonable steps to put critical controls in place in relation to the appropriate exclusion zone around operating cranes. In particular:
   (1) it was Mr Gibson’s responsibility to seek improved performance measures to monitor policy effectiveness. He should have sought improved performance measures to monitor the effectiveness of the policy;
   (2) he could and should have done more to monitor and measure compliance in relation to the critical risk of handling loads; and
   (3) at least in part, it was Mr Gibson’s responsibility to implement a system that monitored and measured such compliance.

Despite its finding that culpability was “somewhat overstated” and the discount was not generous, the High Court found that the sentence was not manifestly excessive. Further, although it accepted submissions weighing against the cost award, including Mr Gibson’s level of success and prosecution conduct of the trial, the High Court considered the trial judge was best placed to assess those.

No reasonable steps or all reasonable steps? The Court accepted that “reasonable” does not mean perfect. The case against Mr Gibson turned on a narrow focus on one aspect of POAL’s complex operations. By charging in the way it did, the prosecution implicitly accepted that Mr Gibson otherwise complied with his due diligence obligations. Gault J accepted that he had taken reasonable steps including in relation to the critical risk in issue. However, it needed to assess whether “further reasonable steps should have been taken”. This raises the question: was Mr Gibson assessed by a standard of “due diligence” or “all due diligence”? (The latter being an acknowledged wider standard than the statutory language of s 44.)

Importance of clarity on allegation and particulars. Prosecutors must particularise the steps they allege a defendant failed to take to “fully and fairly inform the defendant” (Talley’s). If the prosecution case was not (as set out) that Mr Gibson failed to take reasonable steps, but rather there were specific omitted steps, these were not obvious from the charging document.

The nature of the enquiry determined by the charge. The High Court has previously cautioned that without clarity on exactly what a defendant failed to do in a charging document, the Court risks acting as a wide-ranging administrative Commission of Inquiry rather than undertaking a judicial function. In Doble, the inquiry of whether reasonable steps had been taken started with what the officer did. In Guilfoyle (another recent Australian case), the regulator articulated the specific steps the officer ought to have taken so the Court could consider whether it was necessary to take those steps to discharge the duty of due diligence. The questions arises whether a more focused enquiry would have produced a different assessment for Mr Gibson?

Will this be the last word? It remains to be seen if this will be the last word on these issues. It is by no means clear that the proposed amendments to the Health and Safety legislation would have (if applied here) make a substantive difference to the charges as they were laid against Mr Gibson.

An officer charged with an offence should have confidence that a prosecution has been brought only after a fair consideration of their individual conduct, taking into account what was done, and assessed against a standard that is grounded in reality not by reference to a hypothetical officer with infinite wisdom, capacity, and resource, with the crystal clarity of hindsight.