When will a landowner be liable for health and safety failings?
Learnings from WorkSafe New Zealand v Whakaari Management Limited
This is the last of the many judgments to emerge from the high-profile Whakaari / White Island (Whakaari) litigation. As is well known, forty-two tourists and five tour guides were on Whakaari when it erupted on 9 December 2019, tragically resulting in 22 deaths and significant injuries to the survivors.
Whakaari Management Limited (WML) owns Whakaari. It had license agreements with tour operators who brought tourists to Whakaari to experience the active volcano.
WorkSafe New Zealand (WorkSafe) prosecuted WML under the Health and Safety at Work Act 2015 (the HSWA) for failing to comply with the duty under s 37 of HSWA. That section requires a Person Conducting a Business or Undertaking (PCBU) which manages or controls a workplace to ensure, so far as reasonably practicable, that the workplace, the means of entering and exiting it and anything arising from it are without risks to the health and safety of any person.
WML argued that it did not manage or control Whakaari. Judge Thomas found that “[t]o be caught by s 37, a PCBU must in fact be exercising active control or management of the workplace in a practical sense”. It is not enough merely to own the workplace, make money from it or have the ability to manage or control it. His Honour held that WML did manage or control Whakaari because:
WML was not merely a passive landowner. It proactively set conditions around access to Whakaari and remained involved with tour operators and other relevant stakeholders as its own income depended on the tours’ success.
WorkSafe’s guidance states that landowners are not generally responsible for the risks from recreational activities conducted on their land except where the landowner / PCBU also provides the recreational activity. In WML’s case, the recreational activity was exposure to the active volcano and it was WML’s business to provide that.
WML failed to comply with its duty under s 37 to ensure, so far as was reasonably practicable, that the health and safety of persons it had permitted to be on Whakaari was not put at risk from work carried out as part of the conduct of its business or undertaking:
WML failed to engage the necessary expertise to assess risk from commercial tours on Whakaari. Such engagement needed to be ongoing because of the variable and unpredictable nature of the risk of eruption.
WML’s engagement with the Institute of Geological and Nuclear Sciences did not amount to obtaining expert advice on the risk of permitting tours on Whakaari.
It was insufficient for WML to rely on tour operators’ risk assessments when WML’s risk was fundamentally different from that of an individual tour operator and it did not take steps to verify that tour operators’ risk assessments were sufficient.
A previous eruption on 27 April 2016 (when, fortuitously, no one was on Whakaari) should have made it obvious to WML that the other parties’ risk assessment and management processes were inadequate and it could not rely on them.
The failure to conduct an adequate risk assessment meant WML could not take other reasonably practicable steps (for example, ensure adequate means of evacuation).
Judge Thomas found that WML’s failure was a significant and substantial cause of individuals being exposed to a risk of death or serious injury. WML may be liable for reparation amounting to several million dollars to the survivors and deceased victims’ families.
Judge Thomas dismissed a second charge against WML under s 36(2) which alleged that WML failed its duty to ensure that the health and safety of “other persons”, namely, tourists and workers on Whakaari, were not put at risk. His Honour relied on his own reasoning in WorkSafe New Zealand v National Emergency Management Agency and noted that WML never had workers on Whakaari and Whakaari was never WML’s workplace.
The decision will no doubt stimulate discussion. The Court’s rejection of a duty in respect of “other persons” under s 36(2), ostensibly because Whakaari was not WML’s workplace, sits a little uncomfortably with the finding that WML had a duty under s 37 in respect of persons it had permitted to be on Whakaari:
Section 36(2) does not refer to a “workplace”. To confine s 36(2)’s scope to “other persons in a workplace” places a gloss on the statutory language.
Section 36 creates the “primary duty of care”. In Linfox Logistics (New Zealand) Limited v WorkSafe New Zealand, the High Court held that s 36 “is properly viewed as setting out the Act’s foundational duty”, with the duties in ss 37 – 43 “more specific iterations of that foundational duty.” The Court’s reading of s 36(2) as narrower in scope to other persons than s 37 appears at odds with the High Court’s interpretation.
Article written by Aish Bagchi and Ben Finn.
For help with Health and Safety regulation please contact; Ben Finn, Stephanie Bishop or Tim Bain.