Maritime New Zealand v Glass Bottom Boat Limited
[2019] NZHC 81
•5 February 2019
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CIV-2018-404-000600
[2019] NZHC 81
BETWEEN MARITIME NEW ZEALAND
Appellant
AND
GLASS BOTTOM BOAT LIMITED
Respondent
Hearing: 13 September 2018 Appearances:
R E Schmidt-McCleave for Appellant
H M Campbell and K M Proctor-Western for Respondent
Judgment:
5 February 2019
JUDGMENT OF COURTNEY J
This judgment was delivered by Justice Courtney on 5 February 2019 at 4.00 pm
pursuant to R 11.5 of the High Court Rules Registrar / Deputy Registrar Date………………………..
MARITIME NEW ZEALAND v GLASS BOTTOM BOAT LTD [2019] NZHC 81 [5 February 2019]
Introduction
[1] On 30 January 2017, a Maritime NZ (MNZ) inspector issued Glass Bottom Boat Ltd (GBB) with an Improvement Notice and a Prohibition Notice in relation to its commercial maritime services in the Goat Island Marine Reserve north of Auckland. The notices were issued under the Health and Safety at Work Act 2015 (HSW Act). In April 2018 Judge M E Sharpe allowed GBB’s appeal against the issuing of the notices1. MNZ appeals that decision and seeks orders setting aside the District Court decision and reinstating the Prohibition Notice.2
[2]The grounds of appeal are that the Judge erred by:3
(a)failing to conduct the appeal on a de novo basis;
(b)holding that the Inspector was required to identify a specific breach of the HSW Act in issuing the Improvement Notice;
(c)wrongly interpreting the word “unreasonable” in s 135 of the HSW Act;
(d)wrongly identifying the relevant statutory duty on GBB;
(e)finding that because there had been no previous accidents there was no “imminent or immediate” safety risk justifying the issuing of a Prohibition Notice under s 103 of the HSW Act.
[3] The first appeal to the District Court was brought under s 135 of the HSW Act. Section 135 does not expressly permit or prohibit a second appeal. Section 124 of the District Court Act 2016 provides a general right of appeal to the High Court against a decision of the District Court where no other enactment expressly confers a right of appeal or expressly provides there is no right of appeal. Because the HSW Act does not expressly permit or prohibit second appeals, s 124 of the District Court Act governs
1 Glass Bottom Boat Ltd v Maritime New Zealand [2018] NZDC 4351.
2 The Improvement Notice has since expired and so cannot be set aside.
3 A further ground of appeal was abandoned during the course of the hearing.
the appeal.4 Although this appeal is a second appeal, it appears that a general right of appeal exists without the constraints usually applying to second appeals. The correct approach is therefore that described in Austin, Nichols & Co Inc v Stichting Lodestar; if MNZ persuades me that the District Court’s decision is wrong it will be entitled to a fresh assessment in this Court.5
Relevant background
The Goat Island Reserve and its use
[4] The area known as Goat Island Marine Reserve is also known by a number of names – Cape Rodney-Okakari Point Marine Reserve, Goat Island Marine Reserve and Leigh Marine Reserve (the Reserve). Within the Reserve is a beach with Goat Island across from the beach.
[5] GBB runs sightseeing tours in a glass bottom boat, the Aquador, in the Reserve. It has operated in the Reserve since 1979, though GBB only bought the boat and the business in October 2013. The Aquador is the only commercial vessel operating tours in the Reserve. The boat’s glass bottom allows passengers to view the Reserve underwater while remaining dry. It is designed to operate within the Reserve and through the Goat Island channel. It has a shallow draught to enable it to safely traverse the channel at all times. The boat is said to only travel at five knots because bubbles accumulate under the glass if that speed is exceeded, which makes it difficult to see the bottom. Especially through the channel, the boat generally travels at a speed of only three knots. The channel between the beach and Goat Island is also popular with other recreational water users, including swimmers, snorkelers and divers. The Aquador operates in the same water space as these other recreational users. A number of commercial operators hire out kayaks, stand up paddle boards, snorkels and dive tours. In addition, recreational and commercial boat owners pass through the channel. The area is especially busy between December and February.
4 This is the approach also taken by Dobson J in Talley’s Group Ltd v WorkSafe New Zealand [2018] NZHC 1565.
5 At [23].
[6] Around 300,000 people visit Goat Island each year and it was usual for there to be a few complaints each year, generally from or instigated by local commercial users of the Reserve competition with the Aquador. However, over the entire time the boat had been operating in the Reserve, it had never struck a person.
[7] Self-evidently, however, the operation of a commercial motor vessel in the same area as swimmers and divers creates safety risks. The Aquador is designed to load and unload passengers from the beach, which involves the boat passing through swimming and diving areas. It has prop guards which are permanently attached the vessel and which surround the propellers to prevent the propellers hitting swimmers. In peak times, it was GBB’s practice to have an extra crew member who acted as a “spotter” of people in the water.
[8] At the relevant time, GBB’s operations manual referred to the following safety measures:
(a)A sign on the beach by the boat ramp informs beachgoers of the tour schedule.
(b)15 to 20 minutes before the boat departs, the skipper confers regarding weather conditions, density of reserve visitors, presence of other operators, boating schedule and how many trips are planned.
(c)The boat crew guide people in the water out of the path of the boat as it moves away from shore.
(d)A whistle is used along with voice and arm gestures to gain the attention of those in the water to encourage them to move away and alert them to the direction the boat is heading. In failure of that, a steel bar tapped on the aluminium surface of the boat is used to alert those in the water, as it can be heard underwater.
(e)The boat crew are tasked with keeping an eye out for problems. This includes informing the skipper of any snorkelers, kayakers or divers in
the water as the boat is in motion, loading and unloading. Crew are not to assume the skipper has seen what other crew members have observed.
(f)Radio contact between shore and boat crew is required when the captain arrives to enquire about water conditions (visibility, wind, swell, swimmers etc); the tour returns through the channel to inform the skipper of any snorkelers, kayakers, divers in the water; and to communicate with the skipper when clearing the beach.
(g)Swimmers are to be kept at a safe distance from propellers, taking into account water and vessel movement. A distance of three metres is recommended.
(h)Distance is to be used as a guide: 15 metres – beware, 10 metres – alert the skipper, three metres – neutralise the engines.
Complaints about the Aquador
[9] Between late December 2016 and early January 2017, MNZ received complaints regarding GBB’s operation. The complaints related to alleged close calls or about the boat berthing or moving too close to people in the water, or its movements requiring water users to take evasive action.
[10] MNZ’s inspector, Mr Patterson, was tasked with investigating the complaints. On 12 January 2017, he commenced a “working document” internal memorandum to MNZ Northern Compliance Manager, Mr Neil Rowarth, on the matter. He noted that over the past six years there had been several reported incidents of the boat operating in close proximity to swimmers, snorkelers, and guided groups within the reserve. Investigations of the incidents determined there were no compliance-based issues, but there was an element of risk-based issues given the vessel operated in close proximity to swimmers, and because of a contributing factor the complaints identified, which was that the operator of the vessel would yell and behave aggressively towards swimmers if the vessel approached them or vice versa.
[11] Having observed the situation and spoken with swimmers and swim operators and reviewed previous contact with the operation, the Inspector determined that the primary risk was propeller or vessel strike. Contributing factors were high density of swimmers in the water, aggressive nature of the operators and no apparent alteration in process to accommodate high swimmer density, which indicated poor health and safety management processes. The Inspector considered that the likelihood of severe injury was probable. He considered that exposure to the risk could be described as immediate or imminent.
[12] On 19 January 2017, the Inspector called GBB’s sole director, Scott Pennington, and asked to meet. Mr Pennington was not available. The Inspector claimed that Mr Pennington was defensive when requested to provide information regarding his operation. The same day, the Inspector emailed a request for information about the assessment of hazards and risks and associated procedures and processes relating to the operation of the boat in close proximity to swimmers. He advised that, at first instance, he wished to engage with Mr Pennington to ensure the suitability of the assessment and mitigation process, and advised that he would provide any education about those obligations.
[13] Mr Pennington replied by email on 24 January 2017 with a document labelled “Chapter 3 Boat Beach ops” (the relevant part of the operation manual). He invited the Inspector to make suggestions. The Inspector considered that the manual did not feature much relating to safety management of the vessel in close proximity to swimmers. He believed that the activity in the workplace involved a serious risk to the safety of others and the operator appeared not to be meeting the requirements of the HSW Act. As a result, he began internal communications within MNZ as to the options and conditions for issuing notices under the HSW Act.
The prohibition and improvement notices
[14] On 26 January 2017, the Inspector emailed Mr Pennington, advising that he believed the information provided did not adequately demonstrate that the risks associated with the operation of the vessel in close proximity to swimmers were being managed as required under the HSW Act. He required further information and
indicated that GBB could be in breach of the HSW Act. He advised that if GBB was unable to provide any further information directly related to the management of the risk, MNZ may undertake compliance action against GBB.
[15] Mr Pennington replied the next day, referring the Inspector to the operations manual already provided and the industry guidelines for vessel operations in the vicinity of swimmers. He advised that GBB had put recommendations from a 2016 MTOC audit in place and had “a safe management structure in place”.
[16] At 7pm on 30 January 2017, the Inspector emailed Mr Pennington to say that he would be available to meet the next day to discuss the request for information. Mr Pennington replied the next morning that he was unable to meet. The Inspector issued the Improvement Notice and Prohibition Notice later that day.
[17] The Improvement Notice was issued on the basis of the Inspector’s belief that ss 306 and 36(2) of the HSW Act7 were being contravened or were likely to be contravened because there was limited or inadequate risk assessment and implementation of processes and procedures for the hazards associated with operating the vessel in the vicinity of swimmers. It required GBB to conduct a risk assessment of the hazards arising from operating the vessel in the vicinity of swimmers and to implement controls for the risks identified. It recommended focusing on the areas of swimmer density, and for GBB to consider restricting the operation of the vessel in areas where risks relating to operating the boat in the vicinity of swimmers exist.
[18] The Prohibition Notice was issued on the basis that the same provisions were being or were likely to be contravened, and the activity that gave rise to the risk that those provisions were contravened was propeller strike or vessel strike due to the operation of the vessel in the vicinity of swimmers. The same reasons for believing the sections were infringed were given, namely that there was insufficient or
6 Section 30 requires a person on whom a duty is imposed under the Act to eliminate risks to health and safety so far as is reasonable practicable, and if it is not reasonably practicable to do so, then to minimise those risks so far as is reasonably practicable.
7 Section 36(2) of the Act requires a PCBU (defined in s 17 as, inter alia, “a person conducting a business or undertaking”) to ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.
inappropriate risk assessment and mitigation provided by the respondent. The Prohibition Notice prevented GBB from conducting vessel operations by way of entering or transiting in the channel between Goat Island and the immediate foreshore.
[19] On 13 February 2017, GBB applied for an internal review of the decisions to issue the notices. This review was completed by MNZ on 27 March 2017. The reviewer made an amendment to the Improvement Notice but confirmed both notices.
First ground of appeal — should the appeal have been conducted as a de novo hearing?
[20] Appeals to the District Court are governed by Part 18 of the District Court Rules. Rule 18.19 provides that an appeal is by way of rehearing i.e. the appeal is heard and determined on the basis of the record of the oral evidence given below, subject to the discretionary powers to rehear the whole or any part of the evidence or even to receive further evidence.8 In such cases, an appellate court is slower to disturb a discretionary decision of a court that has had the advantage of seeing and hearing the witnesses.9
[21] In the District Court, however, GBB asserted that the appeal should be conducted de novo i.e. an entirely new hearing where the appellate court may hear the evidence afresh and the parties are entitled not only to call the witnesses originally called but also further witnesses as they choose. The appellate court approaches the case afresh and does not start from the presumption that the decision under appeal is correct. The onus is as it was in the original proceeding.10
[22] The Judge agreed with GBB and held that because there was no hearing leading to the decision to issue the notices GBB had had no real opportunity to put its case forward:11
In the present case, there was no hearing on which the decisions are based. The Appellant had no real opportunity to put its case forward. The authority
8 See Housing New Zealand Corporation v Salt [2008] DCR 697 at [10]–[11], citing Shotover Gorge Jet Boats Limited v Jamieson [1987] 1 NZLR 437 (CA) at 440.
9 Shotover Gorge Jet Boats Limited v Jamieson [1987] 1 NZLR 437 (CA) at 440.
10 At [10]. See also Chief Executive of the New Zealand Customs Service v Jury [2017] NZCA 356 at [53].
11 At [12] – 5.
which made the decision was administrative. I agree with counsel for the Appellant: in such cases, natural justice requires that the opportunity to put its case forward must be available on appeal.
Pursuant to s 135(3) HSWA, the Court must enquire into the decision. Again I agree with counsel for [MNZ] that this requires the Court to look beyond what was before the Inspector at the time he made the decision. The Court cannot satisfy that requirement by treating this matter as an Appeal by way of rehearing where it would consider the record before it to determine if the decisions appeals from were reasonable. To this end I have read, heard and considered all the evidence proffered by the parties, including the Appellant’s two affidavits, viva voce evidence of Mr Pennington and an affidavit on behalf of the Respondent.
As I consider that s 135 (3) of the HSWA provides for a de novo Appeal, Rule DCR 18.19 does not apply.
The Respondent neither seeks to defend or justify the decisions to issue the Notices. It assisted the Court by explaining the decision-making record and provided statutory context to MNZ’s role under the relevant legislation.
[23] MNZ accepts the Judge’s decision that the hearing should have been conducted de novo. Its complaint is that, despite concluding that the appeal should be conducted de novo, the Judge failed to conduct the hearing on that basis. Specifically, she did not adjourn the matter to allow the parties to provide further evidence, with the result that the hearing was an amalgam of a de novo hearing and a rehearing, with the procedure followed effectively that of a rehearing under Part 18 of the District Court Rules. For example, MNZ submits that evidence in the form of affidavits from Mr Patterson and Mr Pennington were filed with leave of the District Court pursuant to r 18.16.
[24] It is correct that the Judge proceeded on the basis of both oral evidence from Mr Pennington and affidavit evidence from the Inspector; the hearing took place on 23 and 24 January 2018, with the Inspector providing a second affidavit on 24 January 2018. In her decision, the Judge held that the appeal was properly conducted de novo. She referred to the bundle, affidavit and Mr Pennington’s viva voce evidence.
[25] MNZ relied heavily on the process followed by the District Court Judge in Talley’s Group Ltd v Worksafe NZ as showing that the Judge in this case had erred in her approach.12 In Talley’s, Judge Zohrab did not rely on a bundle of documents as the
12 Talley’s Group Limited v Worksafe NZ [2017] NZDC 29068 affirmed in Talley’s Group Limited v Worksafe NZ [[2017] NZHC 1565.
Judge did here, but instead heard full viva voce evidence with cross-examination from both parties, including evidence from the relevant inspector, affidavit evidence from the internal reviewer who had confirmed the Inspector’s decision and technical and expert evidence.
[26] However, simply because there was a full oral hearing in Talley’s does not mean that is required in every case. In Shotover Gorge Jet Boats Ltd v Jamieson the Court of Appeal observed that a de novo hearing:13
… would include a full hearing of oral evidence if any party so insisted … There would of course be nothing to prevent the District Court, if the Judge saw fit and the parties agreed, treating all or part of the evidence taken before the Authority as evidence for the purposes of the District Court hearing. As regards at least some of the recorded evidence, that course might be convenient. It could be highly desirable to save costs and unnecessary repetition of the same point of view.
(emphasis added)
[27] Whilst parties may seek a full hearing of oral evidence in a de novo hearing, there is no obligation on the Judge to require that if the parties do not wish it. It seems clear that MNZ did not seek that. It knew that GBB wished to adduce oral evidence and was permitted to do so. MNZ, however, filed an updating affidavit from the Inspector on the second day of the hearing position but did not seek to adduce oral evidence. In these circumstances, I do not accept that the Judge’s approach was wrong.
[28] Finally, it is notable that in this Court, MNZ did not refer to any evidence it says could or should have been adduced.
[29]This ground of appeal fails.
Second ground of appeal — does s 101 of the HSW Act require the Inspector to identify a specific breach of the Act?
[30] This ground of appeal relates to the Improvement Notice. Section 101 provides:
Power to issue improvement notices
13 Shotover Gorge Jet Boats Limited v Jamieson [1987] 1 NZLR 437 (CA) at 440.
(1)This section applies if an inspector reasonably believes that a person –
(a)is contravening a provision of this Act or regulations; or
(b)is likely to contravene this Act or regulations.
(2) The inspector may issue an improvement notice requiring the person to –
(a)remedy the contravention; or
(b)prevent a likely contravention from occurring; or
(c)remedy the things or activities causing the contravention or likely to cause a contravention.
[31]The Improvement Notice stated:
I Sean Patterson,
being an inspector appointed under s 163(1) of the Health and Safety at Work Act 2015) (“the Act”) reasonably believe that you,
(a)“are contravening a provision of the Act or regulations made under the Act, or
and require you to remedy this actual or likely contravention, or the things or activities causing or likely to cause contravention
Legislative provision s 30 s 36(2)
How the legislative provision is or is likely to be contravened:
Limited or inadequate risk assessment and implementation of process and procedures for the hazards associated with the operation of vessel in the vicinity of swimmers.
Recommended prevention or remedial measures
Conduct a risk assessment of the hazards arising from operating a vessel in the vicinity of swimmers and the mitigation of these risks, focus on the areas swimmer density, and consider restricting the operation of the vessel in areas were (sic) these risks exists (sic).
[32] The Judge held that because s 101 specifically provides that it applies if “an inspector reasonably believes that a person is contravening or likely to contravene a provision of the Act”, the Court must enquire into whether the Inspector had identified a specific breach which was occurring.14 She found that the events of January 2017 were such that the Inspector had not given GBB a reasonable opportunity to provide
14 At [45].
evidence of “implementation of process and procedures for the hazards associated with the operation of a vessel in the vicinity of swimmers”, as recorded in the improvement notice. No meeting had taken place and the Inspector should have given GBB more notice of the meeting or tried to arrange a meeting Mr Pennington could attend once he had ascertained Mr Pennington’s unavailability. Mr Pennington should also have been given the opportunity to answer the four complaints MNZ had received.
[33]The Judge found that:15
There is no provision in the HSWA relating to a risk assessment. The Inspector’s view that the Appellant’s risk assessment was not up to his standard or in the form that he preferred was irrelevant as lack of a risk assessment was not and could not of itself be a breach of the HSWA.
[34] The Judge referred to Rovera Scaffolding ACT Pty Ltd v Director General of the Chief Minister, Treasury and Economic Development Directorate (administrative review),16 where the Court held in relation to similar Australian legislation that an improvement notice was not properly issued if the perceived risk was not a breach of the Act. The Judge agreed, and considered that because the Inspector did not identify a specific or likely breach of the Act, he could not have reasonably believed GBB was contravening or likely to contravene a provision of the HSW Act.17
[35] MNZ argued that s 101 did not necessarily require the Inspector to inquire into whether a specific breach of the HSW Act was occurring but rather, that it was for him to reasonably believe that the person is contravening or likely to contravene a provision of the Act. It distinguished Rovera Scaffolding on the basis that the relevant Australian legislation expressly required an inspector to reasonably believe that the person “is contravening or has contravened” the Act before an improvement notice can be issued. In comparison, s 101 permitted a notice to be issued for a “likely contravention”.
15 At [55].
16 Rovera Scaffolding ACT Pty Ltd v Director General of the Chief Minister, Treasury and Economic Development Directorate (administrative review) [2016] 127 ACAT (ACT Civil and Administrative Tribunal).
17 At [56]–[57].
[36] Ms Schmidt-McCleave, for MNZ, submitted that the Inspector was not suggesting that the HSW Act required a risk assessment in a particular form and the failure to so provide was a breach. Rather, he was not satisfied that adequate assessment of the risk of operating the Aquador in the vicinity of swimmers had been conducted. Consistent with this, the Inspector recommended remedial measures such as conducting a risk assessment and implementing controls for the identified risks, and that these should focus on the areas of swimmer density, and that restricting the operation of the vessel in such areas should be considered. She argued that a reasonable belief by the Inspector that there was a failure to conduct such a risk assessment would contravene, or be likely to contravene, ss 30 and 36(2) of the HSW Act.
[37] Ms Campbell, for GBB, submitted that the contravention or breach must be described with sufficient particularity to enable the duty holder to be able to remedy the breach. She submitted that to have a “reasonable belief” under s 101, the Inspector needed to turn his mind to the elements of the provisions allegedly being contravened, and be satisfied that the elements of that test are met and argued that this is supported by s 102, which requires inspectors to identify the section being contravened and how. She pointed out that, as an example, in Talley’s Group Ltd v WorkSafe New Zealand, the inspector had supported his view that s 36(1) was not being complied with because he considered the elements of s 36(1) were met to the extent necessary by identifying Talley’s failure to take two specific practical steps that would have ensured, as far as reasonably practicable, the safety of workers, in relation to a particular piece of machinery.18
[38] I agree with GBB that the specific contravention or likely contravention of the Act must be identified. If it is not, there is no objective basis on which the recipient of the notice can improve or that improvements can be measured. I therefore agree the Inspector was wrong to rely on the failure to perform an adequate risk assessment as being a breach or likely a breach; such an omission is merely the backdrop to any specific breach or likely breach.
18 Talley’s Group Ltd v WorkSafe New Zealand [2017] NZDC 29068 at [104]–[106].
[39] It is true that in the Prohibition Notice the Inspector identified the risks of boat or propeller strike to swimmers. If he reasonably formed the view that there was insufficient evidence of those risks being minimised or adequate mitigation measures being put in place, he could reasonably have believed that ss 30 and 36(2) of the Act were being breached but the identification of those grounds in the Prohibition Notice does not affect the invalidity of the Improvement Notice.
[40]This ground of appeal fails.
Third ground of appeal – the Judge’s interpretation of “unreasonable” in s 135
[41] Section 135 of the HSW Act provided the jurisdiction for GBB to appeal against the internal review of the Inspector’s decision:
(1) An eligible person may appeal to [the District Court] against an appealable decision on the grounds that it is unreasonable.
[42]The Judge held that “unreasonable” in s 135:19
… should be interpreted as carrying the ordinary meaning of something which goes beyond the bounds of what is reasonable as opposed to the public law definition of decisions taken in bad faith, irrational decisions or giving inappropriate weight to irrelevant consideration (Wednesbury unreasonable).
[43] The Judge then examined the statutory context and the circumstances in which the notices were issued and concluded that there had been substantive unreasonableness in the issuing of the Prohibition Notice and procedural unfairness in the issuing of the Improvement Notice; she considered that the Inspector had predetermined the outcome, there was a lack of evidence to support his views about GBB’s attitude to health and safety and a lack of due process in the investigative process.
[44] MNZ submitted that Judge Sharpe erred in her interpretation of “unreasonable” in s 135. It maintained that, leaving aside whether Wednesbury unreasonableness applies, s 135 requires public law considerations to be applied in an appeal brought under that section; factors such as predetermination, bad faith and breaches of natural
19 At [80].
justice are to be considered. However, MNZ went on to submit that, notwithstanding that error, the Judge actually applied public law considerations in the ultimate decision in some respects such as the breach of natural justice and predetermination. Ms Schmidt-McCleave submitted that consideration of the notices under a full public law framework would have resulted in a determination that the decisions to issue the notices were reasonable.
[45] GBB argued that MBZ had misinterpreted the Judge’s decision and that the Judge, while excluding Wednesbury unreasonableness, had nevertheless applied a “fairly orthodox public law-type consideration”. Contrary to MNZ’s assertion, she had not rejected the public law definition of unreasonableness.
[46] In my view, the way the Judge expressed herself at [80] of her decision suggested a rejection of the public law approach to the concept of unreasonableness. If that was intended, it was an error. I agree with the statements in Talley’s Group Ltd v WorkSafe New Zealand in which Judge Zohrab accepted the parties’ submission that the decision in issue would have been unreasonable if it met the conventional test for unreasonableness in administrative law:20
(1) The statutory basis for the issuing of a notice did not exist, i.e. a reasonable belief that the person conducting the business or undertaking (“PCBU”) was breaching the Act or Regulations, or was likely to be breaching the Act or Regulations by continuing to operate the conveyor without taking the corrective action required by the notice;
(2) In reaching that decision, and having regard to all of the information above available to them, the decision maker:
(a) Took into account irrelevant factors;
(b) Failed to take into account relevant factors; or
(c) Erred in the interpretation or application of the law; or
(d) Exhibited an improper purpose or motive or bias; or
(e) The decision maker made a decision that no reasonable decision- maker could have made.
20 At [42].
[47] On the appeal, Dobson J noted that the parties had agreed that “unreasonable” reflected the administrative law notion of unreasonableness.21
[48] However, two things suggest that the Judge may not have intended to reject public law principles. First, it is clear that the Judge was relying on the commentary from Mazengarb’s Employment Law, which states, in relation to s 135, that:
The word “unreasonable” has acquired the status of a term of art in public law as applying in extreme cases to decisions taken in bad faith; or which are irrational; or which give inappropriate weight to irrelevant considerations …
[49] Secondly, the Judge actually proceeded on the basis of public law principles, finding unreasonableness as a result of breach of natural justice, predetermination and lack of evidence. As I have noted, MNZ recognised this fact.
[50] Therefore, all that remains of MNZ’s argument on this ground of appeal is its assertion that “a consideration of the Notices under a full public law framework would have resulted in a determination that the decisions to issue the notices were reasonable”. However, no argument was advanced to show what errors the Judge made in her assessment of the case that would have led to that finding. These findings were ones based on findings of fact and I am not satisfied that the Judge made any error in this regard. In these circumstances, there is no basis on which to conclude that the Judge’s error in explaining the approach she intended to take led to an error in her ultimate decision.
[51]This ground of appeal fails.
Fourth ground of appeal – the interaction between ss 30, 36 and 37.
[52] The Prohibition Notice was issued pursuant to ss 105(1)(a), 30 and 36(2). Section 105(1)(a) permits an inspector to issue a prohibition notice if he or she reasonably believes that:
(i)an activity is occurring at a workplace that involves or will involve a serious risk to the health or safety of a person arising from an immediate or imminent exposure to a hazard; or
21 At [9].
(ii)an activity may occur at a workplace that, if it occurs, will involve a serious risk to the health or safety of a person arising from an immediate or imminent exposure to a hazard; …
[53] In comparison to the Improvement Notice, the Prohibition Notice identified the risk and the reasons for his belief that the risk existed;
Matter or activity that does or will give rise to the risk:
Propeller strike or vessel strike due to the operation of a vessel in the vicinity of swimmers.
Basis for believing grounds exist:
Insufficient or inappropriate risk assessment and mitigation provided by PCBU, Observation by Inspector of site and work being undertaken.
[54]Under s 36(2), GBB was required as a PCBU to:
… ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.
[55]Section 37(1) requires:
A PCBU who manages or controls a workplace must ensure, so far as is reasonably practicable, that the workplace the means of entering and exiting the workplace and anything arising from the workplace are without risks to the health and safety of any person.
[56]Section 30 sets out the principles applying to duties imposed by the Act:
(1)A duty imposed on a person by or under this Act requires the person
–
(a)to eliminate risks to health and safety, so far as is reasonably practicable; and
(b)if it is not reasonably practicable to eliminate risks to health and safety, to minimise those risks so far as is reasonably practicable.
(2)A person must comply with subsection (1) to the extent to which the person has, or would reasonably be expected to have, the ability to influence and control the matter to which the risks relate.
[57] However, more than one person may have the same duty imposed by or under the Act at the same time.22 As MNZ acknowledged, other PCBUs operated in the same area and were subject to the same duties as GBB. In that situation, s 33(3) applies:
If more than 1 person has a duty for the same matter, each person –
(a)retains responsibility for that person’s duty in relation to the matter; and
(b)Must discharge that person’s duty to the extent to which the person has the ability to influence and control the matter or would have had that ability but for an agreement or arrangement purporting to limit or remove that ability.
[58] In determining whether it was reasonable to issue the Prohibition Notice, the Judge held that:23
[GBB] lacks the ability to control and influence who enters the marine reserve or the channel as a work place. There are others who also operate commercial businesses in the reserve. They too, have an obligation to eliminate or minimise the risks to health and safety so far as reasonably practicable, to the extent of their ability.
The duty on [GBB] to ensure so far as reasonably practicable that the health and safety of other people is not put at risk from the work carried out as part of the conduct of the business needs to be read in light of the duty to manage risks set out in s 30, qualified by the extent to which the PCBU has the ability to control and influence the matter, together with the duty imposed by s 37 on PCBU who have control of a work place.
I find that when the Inspector determined there was a specific breach of HSWA, he failed to take into account the competing and overlapping duties discussed above. He also failed to take account of the many other recreational boats which provide swimmers with exposure to (arguably greater) hazards. Yet no attempt to modify or regulate their actions appears to have been contemplated.
[59] The Judge then noted that if GBB is required to have things like underwater cameras, signage, and underwater acoustic systems (as indicated at the hearing), then all other motor-powered vessels, whether recreational or otherwise, should be subject to the same requirements. She considered GBB was not treated even-handedly, given it was issued a prohibition notice when other recreational and commercial motor- powered vessels in the area, which do not have greater protections against hazards than GBB, were not treated identically.
22 Health and Safety at Work Act 2015, s 33.
23 At [93]–[95].
[60] MNZ submitted that the relevant duty was that arising under s 36(2) i.e. the work being carried out as part of the business or undertaking. Ms Schmidt-McCleave argued that GBB had control over these risks. She submitted that the Judge had wrongly treated the relevant duty as including that arising under s 37 and s 30(2) as applying to the workplace (over which GBB does not have control because of the presence of other boats and people). In any event, the fact that GBB could not fully control the area of operation, i.e. the channel, increased the importance of effectively addressing the risks by ensuring that they provided for the presence of other operators and visitors in the area.
[61] I do not agree that the only relevant duty is that arising under s 36(2). The Aquador was, clearly, a workplace in its own right. GBB owed duties in respect of what happened on board the vessel as well as the duties relating to how it was operated in terms of safety to other boat users and swimmers. Nor, given the various activities that take place concurrently in the Reserve, could it be said that GBB had complete control and influence over the risks identified in the Prohibition Notice. The Judge identified the risk that needed to be managed was the risk of harming swimmers by contact with the boat or propellers,24 and also noted that GBB neither managed or controlled the water of the reserve. Undoubtedly, GBB had significant control over potential interaction between other users of the area and the Aquador but I do not consider that the Judge made any error in identifying s 30(2) as a relevant consideration.
[62] I do not agree with the Judge’s finding that all other vessels operating in the area, including recreational users, should be subject to the same requirements, such as underwater cameras and acoustic systems, as the Aquador. However, it is evident from
[98] – [100] of the decision that the Judge was satisfied that GBB had discharged its duty to minimise the risks created by its operation.
[63]This ground of appeal fails.
24 See [85], [89] and [91].
Fifth ground of appeal —the finding that there was no “imminent or immediate” safety risk
[64] As noted earlier, s 105(1)(a)(i), which grants an inspector the power to issue a prohibition notice, requires that the inspector reasonably believe that an activity is occurring at a workplace and involves or will involve a serious risk to the health or safety of a person “arising from an immediate or imminent exposure to a hazard”.
[65] As part of her reasoning that the Inspector acted unreasonably in issuing the Prohibition Notice, the Judge held that:25
In the Memorandum, the Inspector stated that the exposure to the risk could be described as imminent or immediate and therefore the issue of a Prohibition Notice was prescribed by the guidance material. However, it is unclear how the Inspector considered that the exposure was imminent or immediate and I do not understand how or why he reached that conclusion.
…
As there have been no accidents or even what might be described as “close calls”, it is hard to see that there was urgency to issue a Prohibition Notice. Equally, I see no evidence of an imminent or immediate exposure to a hazard requiring the immediate cessation of work by [GBB] in the channel.
[66] MNZ submitted that the Judge failed to recognise that the Inspector’s focus was the elimination or minimisation of risk, being a stated purpose of the HSW Act. Ms Schmidt-McCleave argued that the words in s 105 “imminent” and “immediate” must be read in light of the purpose in s 3(1)(a), which provides that the main purpose of the Act is to provide for a balanced framework to secure the health and safety of workers and workplaces by – “protecting workers and other persons against harm to their health, safety, and welfare by eliminating or minimising risks arising from work or from prescribed high-risk plant”. MNZ submitted that the Judge overlooked the fact that the “elimination or minimisation of risk” was the Inspector’s focus when issuing the prohibition notice, which is in keeping with the purpose of the Act.26 Further, MNZ submits that to require urgency based on “accidents” or “close calls” before a prohibition notice can be issued is to misinterpret the test to be applied by an
25 At [68] and [100].
26 Section 3(1)(a) provides that the main purpose of the Act is to provide for a balanced framework to secure the health and safety of workers and workplaces by – protecting workers and other persons against harm to their health, safety, and welfare by eliminating or minimising risks arising from work or from prescribed high-risk plant”.
inspector under s 105 of the HSW Act. Just because there have been no prior accidents, does not mean there was no imminent or immediate safety risk.
[67] In my view MNZ has conflated the reasons that the Judge gave for her finding. She did not find that the lack of prior incidents meant that there was no imminent or immediate safety risk. She found that there was no evidence of imminent or immediate exposure to a hazard that required immediate cessation of work. Clearly, she did not accept the evidence that MNZ relied on about the perceived risk as demonstrating the existence of that risk. In this regard, Ms Campbell pointed out that MNZ received some of the complaints in December 2016 but did not contact GBB until mid-January 2017, suggesting that any risk was not imminent.
[68] In any event, I see no error in taking into account that there had been no previous incidents in determining whether sufficient measures were in place, and whether swimmers coming into contact with the boat (i.e. the hazard) was imminent or immediate. On that basis, despite the extent of the potential harm being significant, as it could cause severe injury, the fact that there was no evidence to support an imminent or immediate exposure was relevant. While risks operate prospectively, the fact that nothing had happened in the past over a long period of time was relevant information to inform the assessment of that risk.
[69] The Inspector had received four complaints about the use of the Aquador. While he noted in his internal report that there had been previous incidents of the Aquador operating in close proximity to water users over the past six years, none involved compliance-based issues. The complaints did not identify very close calls or something that might suggest there might be imminent or immediate exposure. I accept that the Inspector was entitled to make an independent assessment of whether a prohibition notice was required; as MNZ identified, the point of a prohibition notice is to quickly prevent serious risks to health or safety continuing. Ms Schmidt- McCleave submitted that, in light of the complaints received about the Aquador’s activities, the Inspector’s observations and the lack of reassurance he received about risk minimisation, it was reasonable for the Inspector to believe that he had grounds to act under s 105(1)(a). But on appeal that is not the question; MNZ needed to
persuade me that the Judge’s assessment of the evidence before her was wrong, which it has not done.
[70] This ground of appeal fails. For reasons I explain under the seventh ground of appeal, even if it had been reasonable to consider there was an immediate or imminent exposure to the hazard, I consider there are other procedural improprieties that render any such belief unreasonable.
Sixth ground of appeal – finding of breaches of natural justice
[71] The Judge found that the Inspector’s failure to give Mr Pennington the opportunity to respond to the complaints against GBB and taking action against GBB but not other vessel operators in the area amounted to breaches of natural justice. MNZ submitted, first, that these findings were wrong. Ms Schmidt-McCleave pointed to the evidence that the Inspector had made more than one attempt to arrange a meeting with Mr Pennington to discuss the complaints. Although that is correct, Mr Pennington’s evidence was to the effect that he had been unable to meet on the day proposed and MNZ had not given him details of the complaints but simply proceeded to issue the notices without giving him a fair opportunity to respond to them.
[72]For example, Mr Pennington said in evidence that:
Had I had the opportunity with [the Inspector] at the beginning, we would’ve identified what exactly it as that he was asking for and we have that information.
[73] Mr Pennington also said that the Inspector’s concern regarding a lack of instruction to skippers regarding what to do with swimmers was contained in other chapters of the manual and he would also orally brief skippers and undergo a formal training procedure with them. Mr Pennington said:
… it sounded like [the Inspector] was asking for something specific which we didn’t quite understand what he was asking for, and there again I’d just clarify it was so open-ended that we didn’t really know what to give him. So that’s why we sent him that ops.
[74] Further, while there was no documentation making the propeller guard props use mandatory, he used them as a matter of course in any event. In terms of the
Inspector’s concern about skippers knowing what speed to travel at, the boat itself also could not operate above three to five knots in order to operate properly for tours, and was otherwise restricted to five knots in the area due to the Navigation Safety Bylaw and Maritime Rules, Part 91.
[75] As the Judge identified, there was no opportunity for Mr Pennington to answer the complaints MNZ had received, which may have clarified what procedures were (or were not) in place. The investigation occurred over the course of roughly two weeks, during the high season of GBB’s business. The Judge heard from Mr Pennington. Clearly, she accepted his account. There is no basis on which to interfere with that finding.
[76] MNZ also argued that that the Judge was wrong to find that the issuing of notices was discriminatory as a result of treating GBB differently from other vessels using the area; such a finding would unduly encroach on the role of the regulator and the balancing exercise (including limited resources) the regulator must undertake when considering when to take enforcement action and what type of action to undertake. I accept this submission. However, it does not affect the outcome that follows from my rejecting the previous submission. I am not persuaded that the Judge’s finding that there was a breach of natural justice in relation to allowing GBB to respond to the complaints was wrong.
[77] Finally, MNZ submitted that, in any event, breaches of natural justice were cured by the right of appeal.27 Although it is correct that procedural defects may be cured by the opportunity to examine the circumstances in full in the context of an appeal, that principle does not assist MNZ. The breaches of natural justice found to have occurred were addressed by the Judge’s decision to quash the notices. But that does not mean that MNZ can assert that no breaches occurred.
[78]This ground of appeal fails.
27 Citing Calvin v Carr [1980] AC 574.
Result
[79]The appeal is dismissed.
[80]GBB is entitled to costs. Parties may file memoranda as follows:
(a)on behalf of GBB, within 10 working days of the date of this judgment;
(b)on behalf of MNZ, within a further 10 working days; and
(c)any reply within a further seven working days.
P Courtney J
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