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The recent decision of WorkSafe New Zealand v Mount Somers Sand Ltd [2022] NZDC 12056 is significant because WorkSafe was required to pay the defendant’s costs after the Court found there was no case to answer.
Mount Somers Sand Ltd (MSSL) was prosecuted by WorkSafe under s36(1)(a) of the Health and Safety at Work Act 2015 (HSAWA) for failing to ensure, so far as is reasonably practicable, the health and safety of its workers when extracting sand at its Canterbury quarrying operation.
The charge against MSSL was dismissed on the basis there was no case to answer and a lesser charge was also declined.
MSSL sought costs from WorkSafe. The District Court criticised WorkSafe’s decision to prosecute and its conduct of the prosecution and awarded MSSL a significant portion of its legal fees.
Background
MSSL is a small three-person quarrying operation. Silica sand was extracted by pulling sand with an excavator into a catch trench from the bottom of an 80m high slope face. The directors, who were also employees, had considerable experience in the extractives industry and had developed working practices to operate safely.
In 2018, two WorkSafe investigators made an unannounced inspection. In the 15 minutes they were on site, they formed the view that there were risks of catastrophic failure of the slope from which the silica was being extracted. They concluded there was a grave risk of someone being engulfed in sand and seriously injured or killed.
WorkSafe issued a prohibition notice to MSSL on the basis that it was or was likely to be contravening its duty to ensure the health and safety of its workers because “the extraction method was no supported by a plan designed by a geotechnical engineer”. WorkSafe recommended MSSL obtain a geotechnical report to support its extraction methods.
A further prohibition notice was issued the following year relating to risk of serious injury or death arising from the “lack of a geotechnical assessment and design”. Again, MSSL was recommended to obtain a geotechnical assessment.
MSSL pleaded not guilty. In support of its defence MSSL commissioned a geotechnical report by a geotechnical engineer. The geotechnical engineer concluded that the risks and hazards identified by WorkSafe were overstated and highly unlikely.
After receiving the geotechnical engineer’s report, MSSL invited WorkSafe to withdraw the charges. WorkSafe declined.
Liability Decision
WorkSafe did not challenge MSSL’s geotechnical engineer’s findings – therefore, the evidence before the Court was that the MSSL employee was not exposed to risk of engulfment leading to serious injury or death. The Court held there was no case to answer.
WorkSafe then sought to reduce the charge against MSSL to one relating to the failure to obtain a geotechnical assessment (prepared by a qualified geotechnical engineer) before the work began.
The Court found that the primary duty under s36(1)(a) HSAWA required a PCBU to have a “competent person” assess the hazards and risks. That competent person could be an employee of the PCBU and did not have to have a professional engineering qualification.
On the evidence, an inspection by a competent person (one of the directors of the company) had occurred. His assessment was supported by the geotechnical engineer’s findings. Further, there was no evidence that:
- The person assessing the risk lacked sufficient experience to make the assessment of hazards and risks;
- The assessment was flawed or inadequate;
- The work methods and protocols were flawed or inadequate to minimize risks;
- The work on site breached the work methods or protocols MSSL had developed;
- MSSL failed to assess the hazard; and
- MSSL failed to comply with its duty under s36(1)(a) of the HSAWA.
The Court held there was no case to answer and declined to allow the less charge.
Costs Decision
MMSL applied to recover a portion of its legal costs from WorkSafe under the Costs in Criminal Cases Act 1967.
Costs in criminal cases are unusual, at the Court’s discretion, and subject to prescribed limits. The Court can only go beyond these in cases where there is special difficulty, complexity, or importance. Indemnity costs (a party’s actual costs) or those in excess of scale costs may be awarded “in cases of bad faith or where the applicant for costs established innocence or should never have been charged”.
WorkSafe’s decision to proceed with the prosecution after the geotechnical evidence was circulated was labelled “unfortunate and negligent”. Its decision to proceed when it did not have reasonable prospects of success was criticised and described as demonstrating “a lack of good faith and a high degree of carelessness”.
In this case, the Court was “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 towards MSSL’s actual legal costs”.
MSSL was awarded the costs of preparing its geotechnical evidence in full. It was awarded a contribution to its legal fees (on a 2B basis) up to the date it invited WorkSafe to withdraw the charges and its actual fees after that time. In total this came to $158,537.62.
As far as we are aware, this is the most significant costs award made against WorkSafe.
If you have any questions in relation to this article or require specific advice in relation to a health and safety matter, please feel free to get in touch with Hesketh Henry’s Health & Safety Team.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.
