A recent High Court decision1, challenged the widely accepted legal principle that trust is not a legal entity, and therefore cannot be subject to WorkSafe prosecution under the Health and Safety at Work Act 2015 (HSWA). Last year, the RH & Jury Trust (Trust) was charged by WorkSafe in relation to the death of a child in a farm accident. The Trustees were the legal owners of the dairy farm and farming operations are primarily carried out in the Trust’s name. In 2020, a young child was visiting his grandfather, who worked on the farm. The child’s jacket was caught in machinery, and he was fatally injured.
The question of law before the High Court was whether a trust (or its trustees collectively) could be considered a “person” under s16 of HSWA, which is defined to include “the Crown, a corporation sole, and a body of persons, whether corporate or unincorporate”. WorkSafe argued that interpreting a trust as a “person” was necessary for effective enforcement of HSWA.
The High Court preferred the interpretation that the trustees collectively fall within the definition of a “body of persons … unincorporated,” rather than a trust itself, and therefore would meet the definition of a “person” who could therefore be charged under the HSWA.
The High Court was cautious to apply principles from case law that a trust itself, rather than the trustees collectively, fall under the definition of a “person.” This approach is conceptually consistent with well-established trust law that a trust is not a legal entity and avoided the conceptual and practical difficulties of prosecuting a trust itself. However, this position may be different for a trust board of a charitable trust, which can be incorporated under the Charitable Trusts Act 1957 (and could therefore be considered a PCBU itself as “body of persons incorporated”, unless it is a “volunteer association” under s 17 of HSWA)). The High Court also found that s 29 of HSWA does not prohibit indemnity of trustees for any fine or infringement fee under a trust deed. This finding was made on the basis that if the provision were intended to override fundamental trust principles, it would be worded more broadly. Further, as a trust itself is not a “person” under HSWA, a trust does not fall within the prohibition that “a person … must not indemnify another person.” However, trustees will not always be indemnified from the trust assets if fined under HSWA. Whether a trustee will be indemnified will “depend on the specific facts, the trust deed and the general law of trustee indemnity.” This decision potentially has wide-reaching implications for many trustees. We note that independent schools, and the trustees of the trust boards who carry out operations with potential HSWA implications, should be mindful of their obligations under the HSWA.
This is timely for Trusts to consider given WorkSafe has charged the Whangārei Boys High School Board of Trustees for multiple alleged health and safety failures relating to the death of a student a year ago. Karnin Petera, aged 15, died during a school trip to Abbey Caves when they flooded in May 2023. Prior to the trip, the school completed a risk assessment, finding that Abbey Caves were “prone to flooding” in heavy rain. The trip went ahead, despite Northland being under a MetService heavy rain warning. Sixteen people were rescued from the cave, but Karnin’s body was not recovered until hours later. WorkSafe has since encouraged school boards of trustees to “reflect on their own systems and processes to ensure they are meeting legal requirements for education outside the classroom.”
If you have any questions or queries please get in touch with Senior Solicitor, Hanna Tevita, at Simpson Grierson.
1 WorkSafe New Zealand Mahi Hauhau Aotearoa v RH & Jury Trust [2023] HZNC 3871.
