Worksafe New Zealand v Sproull [2020] NZDC 25821 (4 December 2020)

Last Updated: 21 July 2021

EDITORIAL NOTE: CHANGES MADE TO THIS JUDGMENT APPEAR IN [SQUARE BRACKETS].

IN THE DISTRICT COURT AT PALMERSTON NORTH I TE KŌTI-Ā-ROHE KI TE PAPAIOEA

CRI-2019-054-003325 [2020] NZDC 25821

WORKSAFE NEW ZEALAND Prosecutor

v

DANIEL REUEL SPROULL Defendant

Hearing:	4 December 2020
Appearances:	A Everett and R Woods for the Prosecutor Defendant appears in Person
Judgment:	4 December 2020

ORAL JUDGMENT OF JUDGE J KREBS

[1] The defendant, Mr Sproull, is one of the directors and shareholders of three different companies. First, Sproull Farms Limited, next Gorge Fresh Limited and thirdly, Riverbend Organics Limited. Between them one or more of the companies operate or operates an agricultural business producing milk and selling milk from a property at 1152 Fitzherbert East Road in Aokautere.

[2] During the course of the hearing I have had access to a booklet of photographs produced as part of Exhibit 1. Behind tab 4 of Exhibit 1 is a series of photographs. Photograph 1 is a photograph taken at the property in Aokautere at 1152 Fitzherbert East Road showing a sign advertising a phone number for Yaw milk, farm fresh food

WORKSAFE NEW ZEALAND v DANIEL REUEL SPROULL [2020] NZDC 25821 [4 December 2020]

and the name Gorge Fresh Organics. Behind tab 27 are photographs 16 and 17. These, I understand are taken at the road entrance to the property and again advertise Gorge Fresh Organics with the reference to a cellphone number, 027 YAW MILK, and a website for gorgefresh.co.nz. The similar sign is seen in photograph 17, also with a Fonterra farm number, 44681, which I am told in evidence today traces back to one or more of these companies.

[3] I am quite satisfied that the dairy production and sale operation at the address is associated with at least Gorge Fresh Organics Limited and Sproull Farm Limited.

[4] WorkSafe New Zealand operates under the Health and Safety at Work Act 2015. The Department has a duty to investigate work sites such as the Sproull dairy operation in Fitzherbert East Road to ensure compliance with the legislation.

[5] To enable that to be completed the Chief Executive has power to appoint investigators to undertake that work. That power exists under s 163 of the Health and Safety at Work Act which I will refer to from now on as “the Act.”

[6] The appointment of such inspectors must be in writing. Section 164 of the Act provides for identity cards and states that the regulator must give each inspector an identity card that states the person’s name, their appointment and includes any other matters prescribed by regulations. Furthermore, it states that an inspector must, when exercising compliance powers under this Act produce his or her identity card for inspection on request.

[7] In the course of this hearing I have heard evidence from Ms Kuiti and a Ms West as well as a Ms McAdam. In respect of Ms Kuiti and Ms West I have had produced to me the notice in writing pursuant to s 163 appointing them to be inspectors under the Act and have received in evidence photocopies of their identity cards issued under s 164. I am satisfied that they are both duly appointed and current inspectors pursuant to the Act.

[8] Section 168 of the Act sets out the powers which inspectors have:

168 Powers of entry and inspection

(1) Subject to section 169, for the purpose of performing any function of the regulator or an inspector under relevant health and safety legislation, any inspector may, at any reasonable time, enter any workplace and—

• (a) conduct examinations, tests, inquiries, and inspections, or direct a PCBU or a person who is or appears to be in charge of the workplace to conduct examinations, tests, inquiries, or inspections:
  
• (b) be accompanied and assisted by any other person and bring into the workplace any equipment necessary to carry out the inspector’s functions:
  
• (c) take photographs and measurements and make sketches and recordings:
  
• (d) require the PCBU or a person who is or appears to be in charge of the workplace to ensure that the workplace or any place or thing in the workplace specified by the inspector is not disturbed for a reasonable period pending examination, test, inquiry, or inspection:
  
• (e) require the PCBU or a person who is or appears to be in charge of the workplace to—
  
  • (i) produce information relating to the work, the workplace, or the workers who work there; and
    
  • (ii) produce information relating to the PCBU’s compliance with relevant health and safety legislation; and
    
  • (iii) permit the inspector to examine and make copies of, or take extracts from, the information:
    
• (f) require the PCBU or a person who is or appears to be in charge of the workplace to make or provide statements, in any form and manner that the inspector specifies.
  

(2) An inspector may do any of the things referred to in subsection (1), whether or not—

• (a) the inspector or the person whom the inspector is dealing with is in the workplace; or
  
• (b) the workplace is still a workplace; or
  
• (c) the workers work in the workplace; or
  
• (d) the PCBU is still a PCBU in respect of the workplace; or

• (e) the workers still carry out work in any capacity for the PCBU; or
  
  • (f) in respect of any information, the information is—
    
    • (i) in the workplace; or
      
    • (ii) in the place where the inspector is; or
      
    • (iii) in another place.
      

(3) Despite subsection (1), an inspector must not enter a defence area except in accordance with a written agreement between the regulator and the Chief of Defence Force that is entered into for the purposes of this section and is for the time being in force.

(4) Despite subsection (1)(e), if all or any part of the information relates to a person’s health status and identifies the person, an inspector must not, without that person’s consent,—

• (a) require the production of information; or
  
• (b) examine the information; or
  
• (c) make a copy of, or take an extract from, the information.
  

(5) Nothing in this section affects the application of section 60 of the Evidence Act 2006.

(6) In this section, information includes any document.

[9] In summary the inspector may at any reasonable time enter any workplace and conduct any examinations, tests, enquiries and inspections or direct a person who appears to be in charge of the business or undertaking at that workplace to do so.

[10] Furthermore, pursuant to subs 1(f) an inspector may require the person conducting the business or undertaking or a person who appears to be in charge of the workplace to make or provide a statement or statements in any form and manner that the inspector specifies.

[11] Section 176 makes it an offence for any person on whom a duty is imposed by the legislation to give all reasonable assistance to do so and makes it an offence for the person to fail to do so with fines of $10,000 for an individual or $50,000 for a corporate entity.

[12] Section 44 of the Act provides that if a person conducting a business or undertaking has a duty or an obligation, in other words one to such as to comply with the requirements of an inspector under the Act, then an officer of the entity must exercise due diligence to ensure that the entity complies with that duty or obligation.

Subpart 3—Duties of officers, workers, and other persons 44 Duty of officers

(1) If a PCBU has a duty or an obligation under this Act, an officer of the PCBU must exercise due diligence to ensure that the PCBU complies with that duty or obligation.

(2) For the purposes of subsection (1), an officer of a PCBU must exercise the care, diligence, and skill that a reasonable officer would exercise in the same circumstances, taking into account (without limitation)—

• (a) the nature of the business or undertaking; and
  
• (b) the position of the officer and the nature of the responsibilities undertaken by the officer.
  

(3) Despite subsection (1), a member of the governing body of a territorial authority or regional council elected in accordance with the Local Electoral Act 2001 does not have a duty to exercise due diligence to ensure that any council-controlled organisation (as defined in section 6 of the Local Government Act 2002) complies with its duties or obligations under this Act unless that member is also an officer of that council-controlled organisation.

(4) In this section, due diligence includes taking reasonable steps—

• (a) to acquire, and keep up to date, knowledge of work health and safety matters; and
  
• (b) to gain an understanding of the nature of the operations of the business or undertaking of the PCBU and generally of the hazards and risks associated with those operations; and
  
• (c) to ensure that the PCBU has available for use, and uses, appropriate resources and processes to eliminate or minimise risks to health and safety from work carried out as part of the conduct of the business or undertaking; and
  
• (d) to ensure that the PCBU has appropriate processes for receiving and considering information regarding incidents, hazards, and risks and for responding in a timely way to that information; and
  
• (e) to ensure that the PCBU has, and implements, processes for complying with any duty or obligation of the PCBU under this Act; and

• (f) to verify the provision and use of the resources and processes referred to in paragraphs (c) to (e).
  

[13] The effect of s 44 is that where the person conducting business or undertaking is a corporate entity, then any officer of that corporate entity must exercise due diligence to make sure that the obligations are complied with.

[14] Mr Sproull in this case is prosecuted because he stands in the position of an officer of each of the three companies which it is said are entities conducting a business or undertaking at the premises.

[15] In November 2018 WorkSafe began the process of inspecting the Sproull dairy operation at Fitzherbert East road. I was told by Ms Kuiti that there were new worksite rules which had come into place and WorkSafe wanted to inspect and assess compliance of businesses in the area. At that point there was a particular focus on agricultural businesses such as the dairy operation at 1152 Fitzherbert East Road because they were seen to be sites of potential risk.

[16] Ms Kuiti contacted Mr Sproull through phone calls and emails in order to try and arrange cooperation for an inspection to be undertaken. There were difficulties in achieving this.

[17] On 4 December Ms Kuiti in the company of Ms McAdam who I have mentioned, made a spontaneous visit to the site. They had identified three properties which they would visit that day and I was told by Ms McAdam that this property was the second of those.

[18] They went onto the property, were met by a young man called Liam. Shortly thereafter Mr Sproull appeared in a ute and asked them to meet him at the gate of the property. At that point he declined to assist with allowing a visit and an inspection of the property. He was given a handout setting out his legal obligations including s 176 and s 168. The investigating officers left the property at that point.

[19] A series of emails followed during which Mr Sproull became insistent on seeing the written notice of appointment as inspector for the inspectors involved. This

was initially refused by Ms Kuiti and later by Ms West, but after sensible and pragmatic advice from within the department, and on reflection, the documents were provided to Mr Sproull in an email of 18 January 2019. That email and the two notices of appointment as inspector were produced to me as Exhibit 2 and I am quite satisfied that they were provided. I make no comment whether it was something which the department was obliged to do, but nonetheless it occurred.

[20] Over the next few months there were more attempts to arrange a meeting for an inspection at the property. On 29 March, and the email was sent to Mr Sproull advising that an inspection would be rescheduled to Thursday 2 May 2019. I observe that I am picking up the narrative at this point after a number of other communications had occurred which bear no relevance to my decision.

[21] The email of 29 March referred Mr Sproull to the duty he had to assist inspectors and reference to the fact that it would be an offence to hinder or obstruct an inspector. He was also referred to s 168 of the Act which I have already referred to, setting out the powers of entry and inspection.

[22] The email might have presented some difficulties if a charge had arisen alleging that Mr Sproull failed to comply with his obligations on 2 May 2019. That is because the email referred to Riverbend Organics Limited and referred to an address of [number deleted] Fitzherbert East Road, RD1, Palmerston North.

[23] I indicated earlier that I am satisfied that at least two of the Sproull companies conducted a business there, but I am not so satisfied that Riverbend Organics Limited conducted a business there. Furthermore, the address of [number deleted] Fitzherbert East Road is the private residential address of Mr Sproull. That is clear from the evidence I was given, but in particular from the Companies Office documents which demonstrate that that is his personal address as a director of the company. The department have no business conducting an inspection of his residential address.

[24] The inspection which was proposed for 2 May 2019 did not proceed despite the attendance of the investigators because Mr Sproull did not attend.

[25] Next there was an email of 16 May 2019. That email rescheduled the inspection for Friday 24 May at approximately 11 am. This email refers to what I believe to be the correct company or business, Sproull Farms YAW MILK or Gorge Fresh Organics. It also corrected the error made in relation to the address in the previous email of 29 March. The correct address is 1152 Fitzherbert East Road.

[26] By reference to the assessment or inspection proposed for 2 May, I am satisfied that the legal obligations set out in the 29 March letter were effectively imported into this letter and the obligations in any event were legal obligations.

[27] I am satisfied that given the correctness of the address and the names of the business sufficient to identify the purpose of the visit, the notice behind tab 26 in Exhibit 1, being the email of 16 May, was properly given and that Mr Sproull was aware of the date and time proposed for the inspection. I am satisfied that the notice was reasonable given all that had occurred before and I am satisfied that, pursuant to s 44 of the Act, there was a legal requirement on him as an officer of the company to exercise due diligence to ensure that the business operating at the address complied with the obligations.

[28] The obligation on the business was to provide all reasonable assistance to enable an inspector to enter, inspect, examine, enquire or exercise any other powers under the relevant health and safety legislation. If the investigators who attended on 24 May at 11 am as set out in the 16 May email notice, required Mr Sproull’s cooperation, it was reasonable for them to require his assistance and cooperation because they needed to access the property and the dairy operation on it.

[29] Behind tab 24 in the bundle of documents Exhibit 1 is a photograph of a sign attached to the outside of one of the buildings at the dairy operation. It is a health and safety statement issued by Sproull Farm Limited and Gorge Fresh Organics Limited. I say as an aside that that gives me further confidence that the business that was being inspected was indeed operated by one or both of those companies of which Mr Sproull was a director.

[30] The notice goes on to declare that there are dangerous things on the property, that they are managed to meet the requirements of the Crimes Act 1961, which in turn provides the duty of persons in charge of dangerous things, and importantly for the current exercise, included a statement in bold red type: No visitors without an appointment.

[31] Ms Woods as counsel for the prosecuting agency, rightly in my view, points out that it was reasonable for the inspectors to require Mr Sproull to attend to show them into the premises and allow them to inspect it, given that sign and that protestation. When they attended at the appointed time on 24 May 2019 Mr Sproull failed to attend, despite being required to do so.

[32] He had a duty to do so for the reasons I have set out above. I am satisfied that he, in failing to attend, breached that obligation and similarly breached an obligation to facilitate access to the inspectors Kuiti and West onto the property on the day in question.

[33] In those circumstances I find the first charge, CRN ending 1062 to be proved.

[34] I turn then to charge 2. I have already referred to the obligation of the operator of a business when required by an inspector pursuant to s 168(1)(f) to make or provide a statement in any form and manner that the inspector specifies. As part of their investigation the inspectors required Mr Sproull to provide a statement.

[35] By email of 4 June 2019 Ms Kuiti sent a letter to Mr Sproull and to Mrs Sproull, who I should say is also a director and shareholder of these companies, requiring them to provide an interview. The letter was addressed to the companies. The greeting was to Mr Daniel Reuel Sproull and Ms Jeanette Sproull. The preamble referred to the businesses and then in the third paragraph stated as follows:

I require Sproull Farms Limited, Gorge Fresh Organics Limited and Riverbend Organics Limited to make this statement at 1.30 pm on Monday 17 June 2019 at the Palmerston North WorkSafe office located at level 4, 65 Rangitikei Street, Palmerston North. I am requiring this statement to be made under s 168(1)(f) of the Health and Safety at Work Act 2015.

[36] That letter was dated 4 June which is just a little shy of two weeks prior to the appointed date. Plainly a company can only act through its shareholders and/or directors, but of course, s 44 obliges those company officers to exercise due diligence and ensure that the companies comply with the obligation or duty. It is clear that both Mr and Mrs Sproull had an obligation as directors and shareholders of the companies to attend at 1.30 pm on Monday 17 June 2019 as directed.

[37] I have heard evidence that there was no demur from the requirement, no reasonable explanation for non-compliance, but nonetheless Mr Sproull, who is the only defendant here, did not attend. That in my view is a failure under the Act and charge CRN 1063 is likewise made out. The charge is proved.

Judge J Krebs

District Court Judge

Date of authentication: 23/12/2020

In an electronic form, authenticated pursuant to Rule 2.2(2)(b) Criminal Procedure Rules 2012.