Maritime New Zealand v Fullers Group Ltd  NZDC 10157
Published 17 June 2020
Breach of duty as a PCBU — order for specified project — reparation — proportionality test — costs — Health and Safety at Work Act 2015, ss 36 (2), 37(1), 48(1), 48(2)(c) & 155 — Stumpmaster v WorkSafe New Zealand  NZHC 2020.
Following an incident where the Kea, one of the Fullers Group Ltd (Fullers) ferries collided with the wharf , injuring several passengers, while being berthed by a trainee master, Fullers pleaded guilty to a breach of their duties as a PBCU to ensure the health and safety of others and to provide any necessary information, training, or supervision.
Section 155 of the Act provides that the court may make an order requiring Fullers to undertake a specified project for the general improvement of work health and safety within a period specified in such an order. The maximum fine is $1.5 million. Maritime New Zealand (MNZ) sought a fine, reparation, a project order (as proposed by Fullers) and 50 per cent of their external costs.
The design of the Kea's propulsion system is uncommon in New Zealand, requiring "specific training and practice time to learn to operate". Fullers admitted that the trainee master had not had sufficient off-run training time, albeit that the supervising master had confidence in their ability to take the helm. Fullers further admitted that more prominent safety warnings and advice to passengers to remain seated while berthing were not provided, arguing however, that the level of culpability was less than that claimed by MNZ. Fullers sought a project order pursuant to s 155 of the Act and put forward a detailed proposal which was supported by MNZ.
In considering whether it is appropriate to make a project order, the court considered a list of factors suggested by the prosecution — that an order must demonstrably: (1) go beyond compliance with HSAWA; (2) have a meaningful connection to the conduct for which the defendant is to be sentenced; (3) not propose things which already exist; (4) require engagement from workers; and (5) require something above and beyond existing health and safety obligations. The court noted that although these factors follow logically from s 155 requirements, they "must remain guidelines not necessarily requirements". The court was satisfied that the proposed order would be for the general improvement of health and safety and provided a specific timeframe. It was further noted that in the view of the court project orders should be encouraged by prosecutorial authorities.
In regard to any reduction in a fine for the cost of a project order although there should usually be an element of a fine, in the view of the court there may be cases where a full dollar for dollar reduction is appropriate, distinguishing orders from reparation. A project order imposes a substantial monetary penalty, contributes an overall benefit to workplace safety and the beneficial effect should be given considerable weight in the balancing exercise involved in considering proportionality.
A total of $68, 336 was ordered as consequential loss and reparation to the victims. A further $19, 765 was ordered for costs to be paid to MNZ.
The court assessed culpability at the lower end of the medium range fixing a starting point of $450,000 for the fine. A 5 per cent uplift for previous convictions, deductions of 25 per cent for an early guilty plea and 5 per cent for remorse were applied leaving an end figure of $286,159. Taking into account proportionality, the court considered that a percentage deduction in relation to the project cost, as proposed by MNZ, would not be appropriate nor would a dollar for dollar reduction. From an estimated project cost of $300,750, the court allowed a benefit fixed at $200,000. Any additional costs associated with implementation of the project would be at Fullers cost.
Fullers were ordered to pay the full project cost, a remaining fine of $86,159, $68, 336 in consequential loss and reparation to be paid to the victims, and $19, 765 costs to be paid to MNZ. Judgment Date: 5 June 2020.
* * * Note: names have been changed to comply with legal requirements. * * *