Dong SH Auckland Limited v Worksafe New Zealand

[2024] NZHC 575

IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY

I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE

CRI-2023-404-000338

[2024] NZHC 575

DONG SH AUCKLAND LIMITED

v

WORKSAFE NEW ZEALAND

Hearing:

2 February 2024

Appearances:

G Credo for the Appellant

K E Hogan and A Everett for the Respondent

Judgment:

18 March 2024

JUDGMENT OF POWELL J

[Appeal against conviction]

This judgment was delivered by me on 18 March 2024 at 4.00 pm pursuant to

r 11.5 of the High Court Rules

…………………..

Registrar/Deputy Registrar

DONG SH AUCKLAND LIMITED v WORKSAFE NEW ZEALAND [2024] NZHC 575 [18 March 2024]

[1]    Dong SH Auckland Limited (in liquidation) (“the appellant”) has appealed against its conviction in the District Court on three charges under the Health and Safety at Work Act 2015 (“HSWA”), namely:1

(a)failing, as a person conducting a business or undertaking (“PBCU”), to ensure as far as reasonably practicable the health and safety of other persons when carrying out its business or undertaking by exposing them to a risk of serious injury or death;2

(b)failing, as a PCBU, to ensure as far as reasonably practicable the health and safety of workers employed by the appellant while at work and carrying out the appellant’s business or undertaking by exposing them to a risk of serious injury or death arising from the collapse of a wall;3 and

(c)failing, as a PCBU, to ensure as far as reasonably practicable the health and safety of workers employed by the appellant, by exposing them to a risk of serious illness arising from asbestos.4

[2]    The convictions were in respect of the appellant’s role in the demolition of a residential building in Point Chevalier, Auckland during December 2017. There is no dispute that in the course of demolition work a structural wall collapsed causing damage to a neighbouring property, trapping the occupier of that property and creating a gas leak. The demolition also proceeded without taking any precautions for dealing with asbestos present at the site. The contractor undertaking the demolition, Quick Earth Moving Limited (“QEM”), pleaded guilty to similar charges to those on which the appellant was found guilty.

[3]    Although the appellant was neither the owner of the building nor the contractor undertaking the demolition works, Judge P Winter concluded the appellant was a PCBU for the purposes of the HSWA and as such failed to comply with the duty of

1      Worksafe New Zealand v Dong SH Auckland Ltd [2022] NZDC 21868.

2      HSWA, ss 48(1), 48(2)(c) and 36(2). Maximum penalty: a $1.5 million fine.

3      HSWA, ss 48(1), 48(2)(c) and 36(1)(a).  Maximum penalty: a $1.5 million fine.

4      HSWA, ss 48(1), 48(2)(c) and 36(1)(a).  Maximum penalty: a $1.5 million fine.

care it owed to its workers and to the property’s neighbours. As a result of that failure, both the workers and neighbours were exposed to a risk of death, serious injury or serious illness. His Honour concluded:

[51]    I reject the defence argument that these actions are not sufficient to establish that the defendant was a PCBU. The facts show that Mr Huo’s role went beyond mere conveyance of information or referral on behalf of the owner. The defence argues it was the owner who selected QEM as the contractor to carry out the demolition at the property. Although the owner did select QEM, that did not alter the defendant’s role of otherwise managing the project. This was clearly left to the defendant.

[52]   It is immaterial that the defendant did not fit a defined role such as the head contractor or the project manager. As previously discussed, the High Court in its decision has already established that a formal arrangement is not necessary for that purpose. The defendant acted on the owner’s behalf in organising and monitoring the development of the property whilst the owner was overseas. The defendant was responsible for preparing the site for demolition. QEM clearly treated the defendant as the owner’s representative in all matters relating to the on-site work that it was required to carry out during the time period relevant to this prosecution.

[53]   I therefore find it proved as a fact that the defendant adopted the role of or similar to a project manager and/or head contractor in relation to the demolition work carried out at the site. The specific label attached to the defendant’s role is not a material element in establishing that the company did in fact have a duty under the Act.

[4]    In its written submissions, the appellant contended Judge Winter erred in no less than nine separate ways:

(a)    Appeal point 1: The Judge erred in finding that a duty was owed in relation to the site.

(b)   Appeal point 2: The Judge erred in not making his determination with reference to the meaning of practicable steps, or otherwise failed to give reasons for his determination of the same.

(c)   Appeal point 3: The Judge erred in not making his determination with reference to the allegations set out in the particulars, or otherwise failed to give reasons for his determination of the same.

(d)   Appeal point 4: The Judge erred in ascribing Mr Huo’s actions to the Appellant when there was no reliable evidence for the same.

(e)    Appeal point 5: The Judge erred in concluding Mr Huo was able to answer questions confidently, where Mr Huo’s interview was conducted in English instead of Mandarin.

(f)   Appeal point 6: The Judge erred in finding that the Appellant was liable to take the reasonably practicable steps prescribed by the HSWA even when the Appellant had no ownership, control or influence, or contractual

relationship, over the construction site, but which would have been defined by a contract.

(g)    Appeal point 7: The Judge erred in finding that the Appellant was supervising the construction site or had control or influence over the site or the demolition contractor’s workers.

(h)   Appeal point 8: The Judge could not conclude that the Respondent’s expert evidence supported the Charges where the expert explicitly confirmed that the Appellant had no role on site.

(i)     Appeal point 9: The Judge erred in finding that the title of the Appellant’s role was immaterial, where the role formed part of the allegations.

[5]    On behalf of the appellant, Mr Credo accepted that the appeal was based on the proposition that the appellant had no substantive role whatsoever in respect of the demolition prior to the incident and that any formal role with regard to the demolition only arose after the incident. In Mr Credo’s submission the appellant could not, therefore, have been a PCBU and there were no practicable steps that the appellant could have taken to avoid the damage that resulted.

[6]    It was difficult to see why the appellant had chosen to pursue the appeal given it was placed in liquidation prior to sentencing and that as a result the appellant was not directed to pay the fine, nor ordered to pay costs. Given the corporate death of the company, the appeal appears moot. Mr Credo took instructions on this point and could give no good reason for pursuing the appeal, but indicated that the appeal was supported by both the liquidator of the appellant, and the sole director of the appellant, Linsheng (Colin) Huo.

Legal Principles

[7]    Section 229(1) of the Criminal Procedure Act 2011 (“CPA”) allows a person to appeal against their conviction to the High Court.5

[8]    Section 232 of the CPA sets out that an appeal against conviction must be allowed if, in the case of a Judge-alone trial, the Judge erred in his or her assessment of the evidence to such an extent that a miscarriage of justice has occurred, or a

5      Criminal Procedure Act 2011, s 230(b).

miscarriage of justice has occurred for any reason. In any other case the appeal will be dismissed.

[9]    The appeal is to proceed by way of rehearing, and it is for the appellant to show that an error has been made. The trial Judge will have erred if, on appeal, this Court comes to a different view on the evidence. In assessing whether there has been an error, this Court ought to exercise caution where the challenge is to credibility findings based on contested oral evidence, taking into account the advantages the trial judge may have had in hearing the evidence as it emerges during trial and in making an assessment of the witnesses.6

[10] The Court may make such order as to costs as it thinks fit, subject to any regulations made under the Costs in Criminal Cases Act 1967.7 In particular, the Court may, if it thinks fit, have regard to the frivolous nature of an appeal.8

Discussion

[11]   There is no merit to the appeal. The appellant’s basic proposition that the evidence reveals no role for the appellant prior to the incident simply does not stand scrutiny. As Ms Hogan submitted on behalf of Worksafe New Zealand (“Worksafe”), the appellant’s submission that its dealings prior to the accident were limited to a friendship between its director and the owner of the property is directly contrary to a substantial body of evidence before the District Court. Consequently, such submissions verge on being misleading and/or disingenuous.

[12]   In particular, there can be no doubt that the submissions put forward by Mr Credo completely chose to disregard the evidence of communications between the appellant and Worksafe, including two interviews between representatives of Worksafe and Mr Huo and his employee Wei (Vincent) Cheng. As Judge Winter noted,9 it is this material that shows conclusively that the appellant had, in fact, taken a substantive role in relation to the demolition and development prior to the incident.

6      Sena v Police [2019] NZSC 55; [2019] 1 NZLR 575.

7 Costs in Criminal Cases Act 1967, s 8(1).

8 Costs in Criminal Cases Act 1967, s 8(5).

9      Worksafe New Zealand v Dong SH Auckland Ltd , above n 1, at [50].

In particular, it shows that the appellant had responsibility on behalf of the owner of the property, who was absent overseas, for “all parts of the work from the demolition to the design and construction and the final completion”. To this end, the evidence of Mr Huo and Mr Cheng also shows that it was the appellant, and not the owner of the property, that appointed QEM to undertake the demolition. It was the appellant who dealt directly with QEM, and it was the appellant who purported to supervise QEM throughout, including on the day the accident occurred.

[13]   As a result, as Judge Winter concluded, it did not matter that the appellant did not have a convenient overall label used to describe the capacity in which it was involved. Likewise, as this Court previously determined in this case, the absence of a written contract between the owner of the property and the appellant also does not mean that the appellant can avoid liability.10 There was more than sufficient evidence for Judge Winter to conclude the appellant was a PCBU and guilty of each of the charges brought by Worksafe. As Ms Hogan summarised in her submissions, the evidence before the District Court included:

(a)Dong SH Auckland Limited was an incorporated company primarily carrying out project management. It also carried out construction work, the latter comprising about one third of its work.

(b)Its sole director was [Mr Huo].

(c)In none of the communications with Worksafe was it suggested that Mr Huo had only been involved in this project in a personal capacity. Answers provided by individuals at meetings, interview or via email described the company’s involvement with the project, and regularly used the word “we”.

(d)Mr Huo/Mr Cheng…told Worksafe Investigator Jenny Opie on 12 February 2018 that in November 2017 the owner of the property had asked Dong SH Auckland to manage the site which included to manage the subdivision of the site, resource consent, architect and builder.

(e)Mr Huo…admitted in a formal interview with Worksafe on behalf of Dong SH on 19 March 2018 that the owner had paid the defendant to project manage the development.

(f)Mr Huo…explained in a formal interview on 19 March 2018 that the owner of the property was one of his friends and that the owner’s intention was to demolish the previous building and build a new one

10     Worksafe New Zealand v Dong SH Auckland Ltd [2020] NZHC 3368.

therefore the owner left all parts of the work to him “from the demolition to the design and construction and the final completion”.

(g)Mr Huo…attended an onsite meeting with the owner and examined the condition of the building before the demolition began and before the purchase had been settled. Mr Huo noted the house was old and unoccupied. He identified that the building was dilapidated and there were a lot of cracks in the building and looked like it was about to collapse.

(h)Dong SH confirmed in the interview that there was no written contract as the defendant was friends with the owner, and they discussed the position over the phone.

(i)Further evidence of Dong SH’s role, consistent with it being a PCBU with influence and control includes:

(i)  Dong SH engaged QEM and was involved in the demolition.

(ii)   Once the wall collapsed on 20 December 2017, Mr Huo…was telephoned by QEM. Dong SH admitted this.

(iii)   At a meeting with Worksafe inspectors on 12 February 2018 Dong SH, through Mr Huo and Mr Cheng, explained that after the wall collapse [sic] Mr Cheng was to notify the neighbours and write a letter of apology to the neighbours. This position was also confirmed at the formal interview.

(iv)  Mr Huo and Mr Cheng said at the meeting on 12 February 2018 that they had arranged for the power and water to be disconnected on site and that Dong SH had arranged for fencing to be put around the property. This was further confirmed during the formal interview.

(Footnotes omitted)

[14]   In his oral submissions, Mr Credo accepted that the evidence noted by Ms Hogan was all evidence which Judge Winter was entitled to take into account in reaching his conclusion that the appellant was a PCBU and that the charges were proven. Other than the bare submission that Judge Winter erred in concluding Mr Huo was able to answer questions confidently,11 Mr Credo was not able to provide any reason as to why the District Court should not have placed weight on the extensive information provided by the appellant through Mr Huo and/or Mr Cheng prior to the trial, noting in particular that a translator was present during the two-hour interview on 19 March 2018.

11 See appeal point 5 set out at [4] above.

[15]   It is also clear, given the evidence available, that none of the rest of the specific appeal points advanced on behalf of the appellant can be sustained. As noted, the appellant cannot establish any of the appeal points raised regarding the sufficiency of the evidence, namely appeal points 1, 6, 7 and/or 9.12

[16]   Likewise, as the appellant had a supervisory role in respect of the demolition there were clearly practicable steps it could have and should have taken in relation to both the demolition itself and the asbestos, and this disposes of appeal point 2.

[17]   There is equally no merit in appeal point 4. On the contrary, the Act makes it clear that there is a presumption that the actions of a director acting within the scope of their authority are ascribed to their company.13 In any event, and as Ms Hogan submitted, the explanations provided by Mr Huo are couched as having been made on behalf of the appellant, and there is no evidence to suggest that Mr Huo was not acting in his capacity as a director.

[18]   Finally, I am satisfied there is likewise no merit in appeal point 8 which relates to the evidence of the respondent’s expert, Rikki Jones. Mr Jones was an expert in demolition. His evidence was focused on what should have been done differently in the demolition with reference to particular roles: in identifying the appellant as a property developer in the course of cross examination, there was nothing in Mr Jones’ evidence that was contrary to the conclusion reached by Judge Winter that the appellant was a PCBU. Even if it had, this was outside Mr Jones’ area of expertise, and was instead properly a matter for Judge Winter to determine on the basis of all the evidence before him.

Decision

[19]   The appeal is dismissed. As indicated at the hearing, leave is granted for Worksafe to seek costs. Submissions on behalf of Worksafe detailing the amount sought and, if appropriate, the entity or individuals against whom the costs are sought by Worksafe are to be filed by 27 March 2024. Submissions in opposition on behalf

12     See above at [11]–[14].

13     HSWA, s 161.

of the appellant and any other entity or person against whom costs are sought by Worksafe are to be filed by 10 April 2024, I will then determine costs on the papers.

Powell J