TAURANGA TOURISM SERVICES LIMITED AND WORKSAFE NEW ZEALAND
[2024] NZHC 2813
•30 September 2024
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
I TE KŌTI MATUA O AOTEAROA TĀMAKI MAKAURAU ROHE
CRI-2024-404-331
[2024] NZHC 2813
BETWEEN TAURANGA TOURISM SERVICES LIMITED
Appellant
AND
WORKSAFE NEW ZEALAND
Respondent
Hearing: 3 September 2024 Appearances:
P W David KC and S E Wroe for Appellant S P Symon and D B Dow for Respondent
Judgment:
30 September 2024
JUDGMENT OF O’GORMAN J
This judgment was delivered by me on Monday 30 September 2024 at 10 am
Registrar/Deputy Registrar
…………………………………
Solicitors/Counsel:
SBM Legal, Auckland Paul David KC, Auckland Sarah Wroe, Auckland
Meredith Connell, Auckland
S T A Forrest, WorkSafe NZ, Wellington
TAURANGA TOURISM SERVICES LIMITED v WORKSAFE NEW ZEALAND [2024] NZHC 2813
[30 September 2024]
[1] Tauranga Tourism Services Ltd (TTSL) appeals against a decision of Judge E M Thomas declining to award costs to the appellant under the Costs in Criminal Cases Act 1967 (CCCA).1
[2] TTSL was one of 13 original parties prosecuted by WorkSafe following the eruption of Whakaari/White Island on 9 December 2019. TTSL was prosecuted under ss 36(2) and 48(1)–(2) of the Health and Safety at Work Act 2015 (HSWA). By the time the trial commenced on 11 July 2023, there were six remaining defendants — the owners of the island (Whakaari Management Ltd, WML), WML’s three directors,2 ID Tours New Zealand Ltd (ID Tours) and TTSL.
[3] At the close of the prosecution case, ID Tours and TTSL applied for a dismissal of the charges against them, pursuant to s 147 of the Criminal Procedure Act 2011. On 12 September 2023, those applications were granted.3 In a separate costs decision issued on 27 May 2024, Judge Thomas declined to award any costs to ID Tours and TTSL.4 TTSL has applied to appeal that costs decision.5
[4]TTSL engaged counsel on a low fee/partly pro bono basis. TTSL paid
$93,440.36 (excluding GST) on invoices totalling $153,440.36 (excluding GST). The difference of $60,000 (excluding GST) for trial costs is unpaid. I understand it will not be pursued as a debt, but on the basis that, if costs awarded to TTSL are more than what has been paid to date, then the surplus is payable to TTSL’s counsel. As such, TTSL submits that an award of $120,000 (approximately 78 per cent of invoiced fees) is appropriate and below a full indemnity amount.
1 WorkSafe New Zealand v ID Tours New Zealand Ltd [2024] NZDC 11804.
2 Andrew, James and Peter Buttle.
3 WorkSafe New Zealand v ID Tours New Zealand Ltd [2023] NZDC 19521. On 9 October 2023, WorkSafe filed an application in the High Court seeking leave to appeal this decision. However, that application was subsequently withdrawn by WorkSafe on 19 February 2024.
4 WorkSafe New Zealand v ID Tours New Zealand Ltd, above n 1.
5 Criminal Procedure Act 2011, s 271.
Legal principles
Law on appeals
[5] This appeal is brought pursuant to s 271 of the Criminal Procedure Act, giving the court broad powers to confirm, vary or set aside the decision.6
[6] An appeal against a decision to refuse to make an order for costs is an appeal against the exercise of discretion. Accordingly, the court ought not interfere with the initial decision unless the appellant shows:7
(a)the court acted on a wrong principle;
(b)failed to take into account some relevant matter;
(c)took account of some irrelevant matter; or
(d)was plainly wrong.
Law on costs in criminal cases
[7] The decision to award costs to a successful defendant is discretionary: the court may “order that he be paid such sum as it thinks just and reasonable towards the costs of his defence”.8
[8] All relevant circumstances, including the factors in s 5(2) of the CCCA, must be considered:
(2) Without limiting or affecting the court’s discretion under subsection (1), it is hereby declared that the court, in deciding whether to grant costs and the amount of any costs granted, shall have regard to all relevant circumstances and in particular (where appropriate) to—
(a)whether the prosecution acted in good faith in bringing and continuing the proceedings:
6 Criminal Procedure Act, s 274.
7 Harriman v Police [2015] NZCA 285 at [14]; Kemp v Police [2014] NZHC 1012 at [4]; and
R v Reid [2007] NZSC 90, [2008] 1 NZLR 575.
8 Costs in Criminal Cases Act 1967, s 5(1).
(b)whether at the commencement of the proceedings the prosecution had sufficient evidence to support the conviction of the defendant in the absence of contrary evidence:
(c)whether the prosecution took proper steps to investigate any matter coming into its hands which suggested that the defendant might not be guilty:
(d)whether generally the investigation into the offence was conducted in a reasonable and proper manner:
(e)whether the evidence as a whole would support a finding of guilt but the charge was dismissed on a technical point:
(f)whether the charge was dismissed because the defendant established (either by the evidence of witnesses called by him or by the cross-examination of witnesses for the prosecution or otherwise) that he was not guilty:
(g)whether the behaviour of the defendant in relation to the acts or omissions on which the charge was based and to the investigation and proceedings was such that a sum should be paid towards the costs of his defence.
[9]Section 5(2) of the CCCA is qualified by the following:
(a)There is no presumption for or against the granting of costs.9
(b)No defendant shall be granted costs by reason only that the charge has been dismissed.10
(c)No defendant shall be refused costs by reason only of the fact that the proceedings were properly brought and continued.11
[10] In appeals concerning costs, appellate courts have held that trial judges are best placed to exercise this discretion. In Burmester v Burmester, an appeal against a decision to award costs in Family Court proceedings, Gilbert J said:12
A decision to award costs involves the exercise of a discretion taking into account a myriad of factors that the trial Judge is best placed to assess. The Court on appeal will always hesitate before disturbing a decision as
9 Costs in Criminal Cases Act, s 5(3).
10 Section 5(4).
11 Section 5(5).
12 Burmester v Burmester [2015] NZHC 1494 at [6].
discretionary as one involving costs. This is why appeals against costs decisions seldom succeed.
[11] Similarly, in Ministry of Fisheries v Maruha (NZ) Corporation Ltd, an appeal against a decision to award costs under the CCCA, this Court said:13
[28] An appellate Court is reluctant to disturb an order for costs. I endorse what was said by Wild J in Pestell v Nationwide Trafalgar Real Estate (2001) 15 PRNZ 480:
[15] Appeals against costs orders are hard to win. That is because fixing costs is quintessentially the exercise of a judicial discretion. In Thoroughbred & Classic Car Owners Club Inc v Coleman 25/11/93, CA203/93 Cooke P said (at p 2):
“It is unusual for an appeal to be brought to this Court on costs only and only rarely could an appeal succeed in that field, for this Court is always especially reluctant to disturb a decision of a High Court Judge on a matter as discretionary as that of costs.”
...
[41] In this case the Judge was seized of the matter and fully aware of all of the background, and he was in the best position to determine those special circumstances. Having sat through a lengthy trial he is in the best position to have a proper feel for the prosecution case and the nuances of the trial.
[12] This principle was reiterated by the Court of Appeal in W v R.14 In declining the application for trial costs, the Court of Appeal repeated its observation in Banks v R that the trial court is usually best placed to address cost questions including allegations about the basis on which the prosecution was brought.15
[13] The Costs in Criminal Cases Regulations 1987 prescribe the maximum scale upon which costs are to be paid under the CCCA. That scale is broadly based on the number of court appearances and some disbursements. However, the inadequacy of these scale costs because the rates have not been updated for “so long” is well-established.16
13 Ministry of Fisheries v Maruha (NZ) Corporation Ltd HC Christchurch CRI-2006-409-20, 9 June 2006 at [28] and [41].
14 W v R [2020] NZCA 283.
15 At [11] referencing Banks v R CA428/2014, 1 December 2015 at [2].
16 See for example R v Lyttle [2022] NZCA 52, (2022) 30 CRNZ 825 at [19]; and Blackwood v R
[2020] NZCA 504 at [11].
[14] The Court has a discretion to make an order in excess of the scale if it is satisfied that, having regard to the special difficulty, complexity or importance of the case, it is desirable to do so.17 In doing so, the following principles apply:
(a)The use of the word “special” means that it is not enough to say that the case was difficult, complex or important. It must be of a difficulty, complexity or importance much greater than is ordinarily encountered.18
(b)The prosecutor’s conduct does not need to be in bad faith or of great seriousness for the court to consider costs above scale. However, any costs order must still be reasonable.19
(c)A prosecutor may be vulnerable to a costs order where it brings and loses what is plainly a test case that was demonstrably weak.20
(d)The amount of any costs award is a matter for the court, but awards are typically modest. Indemnity costs are extremely rare.21
(e)In exercising the discretion, it is relevant that the scale was intended to limit very high costs awards, which have a chilling effect on future prosecutions, but it is also relevant that accused persons may expend substantial sums on their defence when their liberty, reputation and finances are at stake.22
17 Costs in Criminal Cases Act, s 13(3); and R v Bublitz [2018] NZHC 373 at [58].
18 T v Collector of Customs HC Christchurch AP 167-94, 28 February 1995 at 2.
19 Williams v Waimate District Council [2013] NZHC 2922 at [75], [84] and [88]–[90].
20 David Bullock and Tim Mullins The Law of Costs in New Zealand (LexisNexis, Wellington, 2022) at [10.3], referencing BW Camping-Ground Ltd v New Zealand Police [2016] NZDC 25601, [2017] DCR 251.
21 At [10.9], referencing Harding-Rereti v Department of Corrections [2021] NZCA 470 at [51]. See also BW Camping-Ground Ltd v New Zealand Police, above n 20, at [20].
22 At [10.10], referencing Registrar of Companies v Feeney HC Auckland CRI-2011-404-12, 21 June 2011 at [35].
Factual background
[15] Both ID Tours and TTSL were intermediaries in the supply chain between passengers on cruise ships operated by Royal Caribbean Cruises Ltd (RCCL), and the tour provider White Island Tours Ltd (WIT). The supply chain is depicted below:
[16]Their respective roles can be summarised as follows.
(a)WIT operated tours on Whakaari through a licence agreement with WML that provided WIT with the exclusive right to conduct tours via boat. WIT transported customers and guides from the wharf in Whakatāne to Whakaari on one of three vessels leased by WIT.
(b)TTSL is an Auckland-based tourism business that consists of its director Karl Petrie and (at the time) an assistant. It had no presence in Tauranga or Whakatāne. TTSL was one of the ticketing agents that sold WIT tours. TTSL had an exclusive agreement with WIT to book tours for cruise liner passengers. TTSL acted as an intermediary between WIT and ID Tours to sell tickets to RCCL cruise passengers. TTSL’s work in relation to those tours was to:23
(i)manage bookings on behalf of WIT;
(ii)co-ordinate with relevant parties to ensure that the logistics of getting paying customers to the start of the tour were taken care of; and
(iii)in the case of customers from the RCCL cruise ship, arranging the necessary transport from the Port of Tauranga by booking the bus to take passengers to the Port of Whakatāne.
23 WorkSafe New Zealand v ID Tours New Zealand Ltd, above n 3, at [1].
(c)ID Tours was exclusively contracted to deliver shore excursions for RCCL passengers at all New Zealand ports. ID Tours was required to complete a Universal Bid Template (UBT) for every shore excursion it was providing to RCCL. The UBT for Whakaari required ID Tours to provide information about the tour description, restrictions and advice, tour content and, specifically, to attach a waiver, if any was required for the tour. The Whakaari tour required a waiver (the safety terms and declaration), but, as discussed at [20] below, the cruise passengers did not in fact receive that documentation.
[17] GNS, a Crown Research Institute and New Zealand’s lead agency for monitoring volcanoes, uses monitoring equipment set up on Whakaari as well as external observations and measurements to assess Whakaari’s level of volcanic unrest, set its Volcanic Alert Level (VAL) and issue Volcanic Alert Bulletins (VABs) to notify the public and civil defence agencies of changes to Whakaari’s VAL or its monitored parameters.
[18] VALs range from 0 to 5. Whakaari, as an active stratovolcano, is never at VAL0. VALs from 3 and above are for when the volcano is in an eruptive episode, so the VAL1 and VAL2 are the relevant ones from a tour risk assessment perspective:
(a)VAL1 means minor volcanic unrest, with volcanic unrest hazards; and
(b)VAL2 means moderate to heightened volcanic unrest, with volcanic unrest hazards and the potential for eruption hazards.
[19] WIT’s safety terms and declaration for the Whakaari tour contained information about some of the risks posed by a tour, including risks involved with the boat voyage to Whakaari and the uneven terrain that is covered during a tour. However, the risk of an eruption was not specifically referred to; the terms vaguely referred to this by stating “a live volcano has risk”, but this was not explained further. There were separate sets of safety terms for VAL1 and VAL2. The safety terms did not set out what VAL1 and VAL2 meant in relation to the other alert levels.
[20] The documentation containing the safety terms and declaration was not provided to all customers prior to booking tours. The safety information available before booking varied depending on where the tour tickets were purchased:
(a)For tours booked at WIT’s office, a staff member would ensure a copy of the safety terms and declaration document was provided to customers and signed before departure.
(b)For tours booked through WIT’s website or a third party, customers also received a copy of WIT’s safety terms and declaration upon arriving at the WIT office on the day of their tour. They did not receive it when they booked their tour. Those customers were not able to receive a refund if they changed their mind about going on the tour having read the safety terms and declaration.
(c)Customers who booked through a cruise company like RCCL did not receive the safety terms and declaration document at all. They had even less information on which to assess whether or not to go on the tour than the customers in the other two categories.
[21] In any event, WIT ultimately accepted (pleading guilty) that the safety terms and declarations were wholly inadequate, not sufficiently informing paying customers about the hazards, the risk, and the consequences of an eruption.24
[22] TTSL was charged on the basis that it failed to consult, co-operate and co-ordinate with WIT and ID Tours to obtain appropriate and up-to-date health and safety information about tours on Whakaari and to ensure this information was provided to RCCL passengers. In particular, WorkSafe alleged the following in its summary of facts:
(a)While TTSL had obtained the VAL1 safety terms and declaration from WIT and passed it on to ID Tours, it did not take any steps to satisfy
24 WorkSafe New Zealand v Whakaari Management Ltd [2024] NZDC 4119, (2024) 20 NZELR 399 at [17]–[18].
itself that this information was being provided to RCCL passengers. TTSL should have consulted with ID Tours to ensure that the information was being provided.
(b)TTSL did not advise ID Tours that Whakaari had moved to VAL2 prior to the eruption, nor did it ensure that ID Tours was providing updated information to RCCL passengers given the indicated change in volcanic activity.
(c)TTSL did not have a safety management system itself, nor did it have or obtain any knowledge of WIT’s safety management system, including when or how VAL information was imparted to RCCL passengers.
(d)TTSL did not undertake sufficient monitoring or review of the provision of safety information to RCCL passengers. TTSL should have consulted, co-operated and co-ordinated on either side of the supply chain to ensure that RCCL passengers were receiving up-to-date health and safety information at some stage before boarding the boat to Whakaari.
[23] In the investigative interviews, Mr Petrie stated that TTSL had relied on WIT as the tour operator and a registered adventure activities operator to ensure that health and safety information was provided to RCCL passengers. TTSL described itself as an “intermediary agent” of WIT and said it did and would only pass on information when it was requested to do so by WIT. There were no failings of that type by TTSL.
District Court
[24] In a decision issued on 4 May 2022, Judge Thomas dismissed the charges against the National Emergency Management Agency (NEMA), pursuant to s 147 of the Criminal Procedure Act (the NEMA s 147 decision):25
25 WorkSafe New Zealand v National Emergency Management Agency [2022] NZDC 8020.
(a)Read in conjunction with s 36(1),26 reference in s 36(2) to “…work being carried out as part of the business and undertaking” means the process of carrying out that work (work activity) rather than the result of that work (work product).27
(b)That interpretation was supported by the language and structure of s 36 and the Act as a whole, including the indicators of purpose within the Act,28 and the legislative history in Australia and New Zealand.29
(c)NEMA did not have any duty under the HSWA to ensure the health and safety of customers and tour operators to Whakaari,30 because NEMA’s work activity (as opposed to its work product) did not extend that far.
[25]In a costs judgment issued on 29 March 2023, Judge Thomas awarded costs of
$40,000 in favour of NEMA (NEMA sought a higher sum given that its actual costs were in excess of $800,000, but WorkSafe opposed any higher sum).31 WorkSafe did not act in bad faith in bringing and continuing the prosecution, even though WorkSafe had backtracked on earlier assurances that it would not prosecute NEMA.32 WorkSafe was entitled to test the unsettled scope of the duty under s 36(2), and there was a high public interest in avoiding a chilling effect on prosecutors from a fear of an adverse cost awards.33
[26] Based on the NEMA s 147 decision, ID Tours applied prior to trial for the charges against it to be dismissed under s 147. TTSL did not make any equivalent application.
26 At [8].
27 At [7], [18] and [28].
28 At [11]–[17].
29 At [18]–[23].
30 At [17].
31 WorkSafe New Zealand v National Emergency Management Agency [2023] NZDC 5863, [2023] DRC 102.
32 At [6].
33 At [10].
[27]On 14 March 2023 ID Tours’ first s 147 application was declined:34
(a)Outside of the Act, what ID Tours was required to do was likely to depend upon what it was contractually bound to do or what other persons conducting a business or undertaking (PCBUs) may have understood it would do, with both aspects in dispute.35
(b)The prosecution evidence at its highest, was that ID Tours did have obligations in transmitting health and safety information along the chain and/or held itself out as doing so. For example, in a bid document to RCCL, ID Tours represented that it operates adventurous tours and “we live and breath [sic] our Safety Management System…this covers…all risk assessments…sightseeing venues…emergency procedures and safety procedures.” 36 This potentially supported an interpretation that ID Tours did have those contractual obligations or held itself out as performing those tasks.37
(c)Interpreting PCBU as potentially including a supply chain (dependent on the facts) was consonant with the Act’s purpose, Parliament’s intention, the current conditions of the adventure tourism industry and the current context in which the Act sits within that industry.38
[28] At trial, WorkSafe relied on Dr Carolyn Deuchar (an Associate Director and Senior Research Fellow at the New Zealand Tourism Research Institute) for evidence about the adequacy of TTSL’s processes as a member of a supply chain and from Patrick O’Sullivan of WIT on the relationship between WIT and TTSL and his expectations of how that would operate.
(a)Dr Deuchar identified that the basic communication system between WIT, TTSL and ID Tours was “able to communicate risk and safety
34 WorkSafe New Zealand v ID Tours New Zealand Ltd [2023] NZDC 4627.
35 At [11].
36 At [12].
37 At [14].
38 At [17]–[19].
information through the supply chain to participants e.g. via email”. She expected that there would have been a written record to show that WIT passengers had received and acknowledged WIT’s waiver and she expected WIT to have driven this process. She stated that she would not usually expect a ground handler to get participants to read and sign a waiver for an adventure tourism activity unless the inbound tour operator/ground handler was specifically requested to do this as part of their services. On the facts, Dr Deuchar said there seemed to have been an arrangement for TTSL to handle the waiver, but the evidence of Mr Petrie that she referenced did not support that.
(b)Mr O’Sullivan of WIT gave evidence of his expectation that the waiver form given to TTSL would be passed on to ID Tours, who would pass it to RCCL so that passengers would see that documentation before any tour began. Due to an oversight by WIT, the VAL2 form was not sent to TTSL.
(c)There was no evidence that Mr Petrie or TTSL was asked to communicate anything about the change in alert levels.
[29] After the close of the prosecution case, ID Tours and TTSL both applied under s 147 of the Criminal Procedure Act for dismissal of the charges against them. Those applications were granted on 12 September 2023.39 The basis for the dismissal was that the evidence as it eventuated at trial did not, beyond a reasonable doubt, establish the existence of a duty owed by those defendants to the customers visiting Whakaari.
(a)Neither TTSL nor ID Tours, had workers on Whakaari. That was never their workplace. They did not influence or direct the workers of the tour operators in the carrying out of their work.40
39 WorkSafe New Zealand v ID Tours New Zealand Ltd, above n 3.
40 At [11].
(b)Finding a s 36(2) duty where there was none owed under s 36(1) would offend against language of the provisions, the purpose of the HSWA and Parliament’s clear intention in passing it.41
(c)Dr Deuchar testified that supply chains, including this one, could readily accommodate the need to coordinate and consult on safety information and ensure the necessary information got to the right people at the right time. The effect of Dr Deuchar’s evidence, taking WorkSafe’s case at its highest, was that the supply chain structure would not have prevented WIT meeting its obligation to provide safety information.42
(d)Accordingly, no duty was owed by TTSL or ID Tours under s 36(2).
[30]However, in the subsequent costs decision issued on 27 May 2024,
Judge Thomas declined to award any costs to ID Tours and TTSL:43
(a)The supply chain scenario in relation to s 36(2) liability was previously untested in New Zealand.44
(b)The NEMA s 147 decision was distinguishable because it did not involve an entity in a commercial supply chain, which was one of the reasons why the pre-trial application by ID Tours was dismissed.45
(c)Based on the intended evidence at trial, one possible interpretation was that the duty owed by a tour operator such as WIT might be shifted down the supply chain (e.g. ID Tours had held itself out as having the responsibility to pass on health and safety information to RCCL).46
41 At [12].
42 At [18].
43 WorkSafe New Zealand v ID Tours New Zealand Ltd, above n 1.
44 At [8].
45 At [8].
46 At [9].
(d)When the evidence emerged at trial, it became apparent that the supply chain did not have that effect. Until that evidence was given and tested, WorkSafe had a properly arguable case. It acted in good faith in bringing and prosecuting the charges. It had evidence sufficient to support the charge in an area where there were different possible interpretations open to the court in respect of the relevant legislative provisions. The charges were not dismissed on a technicality, but on the evidence as it emerged at trial.47 It followed that WorkSafe could properly charge both TTSL and ID Tours and maintain the prosecutions after NEMA’s successful s 147 application.
(e)In respect of TTSL, without an award of costs it was unable to pay the full extent of its legal bill. However, TTSL must assume some responsibility for failing to insure itself. That TTSL’s legal team was prepared to assume the risk of underpayment should not mean that WorkSafe pays for that, in the context of a fairly and reasonably brought prosecution.48
Points on appeal
[31] TTSL alleged that Judge Thomas made the following errors of law in declining to award costs:
(a)Finding that the NEMA s 147 decision was distinguishable.
(b)Failing to consider TTSL’s position in the supply chain separately from ID Tours.
(c)Failing to consider fully and appropriately the considerations in s 5(2) of the CCCA and all relevant circumstances. In particular, TTSL says that, had the Judge done so, he would have identified that:
47 At [10].
48 At [14].
(i)in terms of s 5(2)(b), the prosecution did not have sufficient evidence at the commencement of the proceedings to support the conviction of TTSL, in the absence of contrary evidence. In particular, there was no evidence that TTSL’s work included the provision of safety information or that it had failed to pass on any relevant safety information when asked to do so; and
(ii)in terms of s 5(2)(g), TTSL and Mr Petrie were co-operative throughout. Mr Petrie attended interviews and answered questions openly and frankly. TTSL did not make any unnecessary applications that added to the cost of the proceeding.
(d)Taking into account irrelevant considerations of insurance, and that TTSL’s lawyers assumed some risks of under-payment.
Analysis
NEMA decision and questions of law
[32] I deal first with the appeal point of an alleged error in distinguishing the NEMA s 147 decision.
[33] Although this is an appeal of the costs decision only, and not the first s 147 application by ID Tours, the appellant says there is an underlying error in both, that the legal meaning of s 36(2) of the HSWA can vary depending on context. When considering how the NEMA s 147 decision applied to ID Tours, Judge Thomas stated, “I must also, however, consider context”.49 In support, the Judge referenced s 10 of the Legislation Act 2019. Section 10(1) provides that the meaning of legislation must be ascertained from its text and in the light of its purpose and its context.
[34] This in turn raises the question of the dividing line between statutory interpretation as a question of law, and the application of legal principles to facts.
49 WorkSafe New Zealand v ID Tours New Zealand Ltd , above n 3, at [13].
Often the key disputed issue involves mixed issues of law and fact. As observed by the Supreme Court in New Zealand in Bryson v Three Foot Six Ltd:50
It involves a question of law only when the law requires that a certain answer be given because the facts permit only one answer. Where a decision either way is fairly open, depending on the view taken, it is treated as a decision of fact, able to be impugned only if in the process of determination the decision maker misdirects itself in law.
[35] Section 10(1) of the Legislation Act refers to context as being relevant for ascertaining the legal meaning of legislation as a matter of law. Generally, this will be the legislative context, and the general range of circumstances that the provision is intended to govern. Context is also central for applying a provision (correctly interpreted) in any given case, but then it is the individual factual circumstances that matter.
[36] In this case, Judge Thomas was not asserting that s 36(2) has different interpretations as a question of law. Rather, he sought to apply the same single interpretation,51 which he arrived at after considering the statutory context. Interpreting s 36 in the NEMA s 147 decision, Judge Thomas drew a line between the process of carrying out work (work activity), and the result of that work (work product).52 He held that liability under s 36(2) only arises from the former.53 Such a meaning was flexible enough to impose a potential duty in a supply chain context, depending on the facts. At the time of the first s 147 application by ID Tours, Judge Thomas could not eliminate WorkSafe potentially establishing at trial that ID Tours had work activity obligations to transmit health and safety information along the chain and/or held itself out as doing so. In other words, the work activity of that particular entity might have included those obligations, in which case liability could attach. I do not read his decisions as accepting that the entirety of a “supply chain” would be treated as a single PCBU regardless.
50 Bryson v Three Foot Six Ltd [2005] NZSC 34, [2005] 3 NZLR 721 at [21].
51 See Mazengarb’s Employment Law (online ed, LexisNexis) at [HSWA36.9.3], referencing Whitaker v Delmina Pty Ltd (1998) 87 IR 268 on the point that “conduct of the … undertaking” is a broad expression that takes its meaning from the context in which it is used”.
52 WorkSafe New Zealand v National Emergency Management Agency, above n 25, at [7].
53 At [8], reading s 36(2) alongside s 36(1).
[37] Accordingly, I see no error on this ground. In the first s 147 application by ID Tours, Judge Thomas sought to apply that same legal interpretation of s 36(2) but held that the position of ID Tours was distinguishable from NEMA’s situation on the facts, with the final application of that test not possible until there was no longer any uncertainty about the scope of its work activity. By the time of the next s 147 application, after the prosecution evidence had closed, that uncertainty had been resolved. The result for both ID Tours and TTSL was then the same as for NEMA, based on an application to different facts.
Differences between ID Tours and TTSL
[38] The criticism of Judge Thomas not considering the position of ID Tours separately from TTSL when determining costs has more merit.
[39] The first s 147 application by ID Tours was refused on the basis that there was some evidence that ID Tours had contractual obligations in relation to the provision of health and safety information or that it had held itself out as providing that information. That did not apply to TTSL, but Judge Thomas was not required to assess that separate question until TTSL made its own s 147 application.
[40] In his costs decision, Judge Thomas grouped ID Tours and TTSL together to analyse whether WorkSafe had a proper arguable case for its evidence to be tested at trial.54 Judge Thomas implied that a turning point came during the cross-examination of Dr Deuchar and her response to questions from the bench.55 However, based on the witness statements and notes of evidence outlined at [28] above, I accept the appellant’s submissions that this simply reinforced the expected witness evidence concerning TTSL — WorkSafe had no expected evidence to substantiate that TTSL (as opposed to ID Tours) had assumed its own work activity obligations to provide health and safety information or that it failed to pass on information it had been expressly asked to. The witness evidence called from Dr Deuchar and Mr O’Sullivan came up to brief (to the extent admissible56), but simply did not extend that far. Given
54 WorkSafe New Zealand v ID Tours New Zealand Ltd, above n 1, at [9]–[11].
55 At [10].
56 Dr Deuchar’s role was to give expert opinion evidence, so her mistaken interpretation of Mr Petrie’s factual evidence did not have any overriding evidential value.
this important factual distinction, I consider it was an error not to assess the position of TTSL separately from ID Tours when determining costs.
Alleged failure to consider relevant factors
[41] It follows that Judge Thomas failed to consider the factor in s 5(2)(b) of the CCCA properly, namely whether at the commencement of the proceedings the prosecution had sufficient evidence to support the conviction of TTSL in the absence of contrary evidence. Judge Thomas purported to analyse that factor by grouping ID Tours and TTSL together. They are different legal entities and there was no sufficient evidence against TTSL in its own right.
[42] There is no express reference in the costs decision to s 5(2)(g), and the fact that TTSL and Mr Petrie were co-operative throughout, including not causing unnecessary costs. I do not see this as an error, because it seems that Judge Thomas did not give it any particular weight (arising in the context of statutory compulsion powers),57 given the relative significance of the other factors that were expressly discussed.
Alleged weight given to irrelevant factors
[43] Ordinarily, the fact of insurance cover or its absence is considered irrelevant to the issues of liability or damages in a proceeding:58
... as a general proposition it has not, I think, been questioned for nearly 200 years that in determining the rights inter se of A and B the fact that one or other of them is insured is to be disregarded ... I cannot wholly ignore a principle so widely applicable as that a man insures at his own expense for his own benefit and does not thereby suffer any derogation of his rights against another man.
[44] Similarly, the liability or otherwise of a party to meet another party’s costs is not affected by the mere fact of one or other being insured.59
57 Health and Safety at Work Act 2015, s 168.
58 Shirley v Wairarapa District Health Board [2006] NZSC 63, [2006] 3 NZLR 523 at [25], quoting Viscount Simon in Lister v Romford Ice and Cold Storage Co Ltd [2957] AC 555 at 576−577.
59 At [26]. However, insurance is not always irrelevant — on the facts in Shirley v Wairarapa District Health Board, it was agreed that Mr Shirley would meet the risk of any claim against him personally, including a claim for costs, by means of insurance cover paid for by the Board. This was a reason for not awarding costs in favour of Mr Shirley against the Board.
[45] For the above reasons, I accept that TTSL’s insurance position should have been treated as an irrelevant factor. However, where that point was discussed,60 I read the costs decision as saying that the underpayment or otherwise of TTSL’s legal team was treated as irrelevant, so I do not consider that aspect in error.
Analysis on appeal
[46] I have found there were two errors in the costs decision: not assessing the position of TTSL separately from ID Tours; and consequently, not properly determining under s 5(2)(b) whether at the commencement of the proceedings the prosecution had sufficient evidence to support the conviction of TTSL in the absence of contrary evidence.
[47] Accordingly, there is jurisdiction on appeal to confirm, vary or set aside the decision, or to make any other orders considered appropriate.61 In making that assessment, I set out my own analysis of the CCCA s 5(2) factors (acknowledging the neutral starting points referred to in [9] above):
(a)I accept that the prosecution was acting in good faith in bringing the proceedings. However, the first two s 147 discharge decisions should have caused WorkSafe to reassess before trial whether there was sufficient evidence to continue the charge against TTSL.
(b)On the legal test as found by Judge Thomas in the two earlier s 147 decisions, I do not consider that the prosecution had sufficient evidence at the commencement of the proceedings (or at any time) to support the conviction TTSL in the absence of contrary evidence. To the extent that WorkSafe decided, in good faith and in the public interest, to pursue TTSL as part of a wider supply chain test case, I consider it unfair for TTSL to bear the full financial burden of that (a point I return to below).
60 WorkSafe New Zealand v ID Tours New Zealand Ltd, above n 1, at [14].
61 Criminal Procedure Act, s 274.
(c)The prosecution took proper steps to investigate any matters suggesting that TTSL might not be guilty. This is not a case where there was any evidence of TTSL failing to pass on health and safety information when requested, or it assuming work activity requiring it to do so — WorkSafe’s investigations discovered that. WorkSafe’s case against TTSL was based on an assertion of a wider duty imposed under s 36(2) of the HSWA on all parties within the supply chain.
(d)I accept that the investigation into the offence was conducted in a reasonable and proper manner.
(e)There was no evidence to support a finding of guilt on TTSL’s part — the charge was not dismissed on a mere technical point.
(f)The charge was dismissed because TTSL established under s 147 of the Criminal Procedure Act that TTSL is not guilty based on the prosecution evidence. The dismissal as against TTSL did not depend on cross-examination or defence evidence.
(g)TTSL and Mr Petrie were co-operative in relation to the acts or omissions on which the charge was based and the investigation and proceedings.
[48] In a prosecution of WIT and ID Tours, TTSL’s witness evidence (from Mr Petrie) could still have been called without TTSL being charged, or if the charge against TTSL had been withdrawn. It seems that WorkSafe’s decision to proceed with the charge against TTSL was based on a broader concept that a duty should be imposed under s 36(2) for all businesses in the supply chain, requiring them proactively to address end service provider risk, effectively treating them all as a single PCBU. While WorkSafe was entitled to pursue such a test case, this would have represented a significant extension beyond the interpretation in the NEMA s 147 decision. As was sufficiently clear and predictable from the ID Tours s 147 decision, Judge Thomas rejected that approach.
[49] I consider that an above scale costs award in the sum of $40,000 is reasonable and appropriate in the circumstances, balancing the risk of a chilling effect on prosecutors against the burden suffered by TTSL defending the charge:
(a)This was a high profile and tragic case of national importance and at a level of difficulty, complexity and importance much greater than is ordinarily encountered for prosecutions of this type.
(b)I have accepted that the prosecutor’s conduct was not in bad faith, but nor does it need to be for costs to be awarded above scale.
(c)WorkSafe brought and lost a test case about the scope of the HSWA s 36(2) duty in a supply chain. While this was initially justified based on cases that contemplated a wider duty but without the issues being argued properly (therefore there were no adverse rulings),62 the NEMA and ID Tours s 147 decisions provided clarity on the legal test, including in a supply chain context. WorkSafe could have anticipated how that test would then be applied by the same Judge to the evidence they intended to call about TTSL, even if TTSL did not bring its own s 147 application prior to trial.
(d)On the other hand, if TTSL had made its own application at the same time as ID Tours (or shortly after), its different factual position might have been examined earlier, saving its own trial costs.
(e)Consistent with most criminal cases where costs are awarded,63 I consider the award should remain reasonably modest and cannot be expected to indemnify the appellant.
62 WorkSafe New Zealand v National Emergency Management Agency, above n 31, at [9]–[10].
63 See helpful summaries in The Law of Costs in New Zealand, above n 20, at [10.12]–[10.13].
(f)An award of $40,000 was made in favour of NEMA64 and against Inflite Charters Ltd.65 These amounts are relevant considerations on parity grounds.
Result
[50]I allow the appeal and award TTSL costs of $40,000.
[51] Neither the CCCA nor the Criminal Procedure Act provides an express mechanism for an entitlement to costs on a successful application for costs, but there is a discretion under s 162 of the Senior Courts Act 2016.66
[52] If the appellant continues to seek such costs for this appeal, then (absent agreement) the appellant may file and serve written submissions within 10 working days and the respondent may file and serve written submissions within 10 working days thereafter. I will then determine those issues on the papers.
O’Gorman J
64 WorkSafe New Zealand v National Emergency Management Agency, above n 31.
65 WorkSafe New Zealand v Inflite Charters Ltd [2022] NZDC 5627. Inflite Charters Ltd pleaded guilty to one charge laid under ss 36(2) and 48 of the Health and Safety and Work Act 2015. Judge Thomas imposed a fine of $227,500 payable by instalments over five years and ordered costs payable to the prosecution of $40,000.
66 The Law of Costs in New Zealand, above n 20, at [10.17], referencing Bublitz v R [2019] NZCA 379 at [58] and fn 58, in which the appeal was dismissed on the grounds that the Judge was entitled to consider that the costs ought to lie where they fell.
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