Talley's Group Limited v Worksafe New Zealand [2018] NZHC 1565 (27 June 2018)

Last Updated: 19 July 2018

IN THE HIGH COURT OF NEW ZEALAND NELSON REGISTRY I TE KŌTI MATUA O AOTEAROA WHAKATŪ ROHE

CIV-2018-442-00007 [2018] NZHC 1565

UNDER	the Health and Safety at Work Act 2015
IN THE MATTER OF	an appeal pursuant to section 124 of the District Court Act 2016
BETWEEN	TALLEY’S GROUP LIMITED Appellant
AND	WORKSAFE NEW ZEALAND Respondent

Hearing:	6 June 2018
Counsel:	G P Malone for appellant D R La Hood and D M Brabant for respondent
Judgment:	27 June 2018

RESERVED JUDGMENT OF DOBSON J

Introduction

[1] This is an appeal from a judgment of Judge Zohrab in the District Court at Nelson delivered on 19 January 2018.¹

Background

[2] On 14 June 2017, Mr Tze Sheng Tan, an employee of the appellant (Talleys) suffered serious injuries to his hand and arm when cleaning a conveyer in a mussel processing plant operated by Talleys in Motueka.

¹ Talley’s Group Ltd v WorkSafe New Zealand [2017] NZDC 29068.

TALLEY’S GROUP LTD v WORKSAFE NEW ZEALAND [2018] NZHC 1565 [27 June 2018]

[3] After an investigation, WorkSafe inspector Mr John Conroy issued an improvement notice to Talleys as provided for under s 101(2) of the Health and Safety at Work Act 2015 (the Act). The notice gave Talleys nine weeks to remedy the alleged contravention of the Act which caused Mr Tan’s accident. That period was more generous than might otherwise have applied, because Mr Conroy understood that mussel processing was not going to take place in the intervening period. While it is operating, the conveyer is submerged in a bath, but during daily cleaning is elevated, thereby exposing the nip points. The improvement notice recommended that Talleys fit a guard to prevent access to nip points whilst the conveyer is running.

[4] On 11 July 2017, Talleys requested an internal review by WorkSafe of Mr Conroy’s decision, as provided for under s 131 of the Act. In doing so, Talleys relied on a report dated 10 July 2017 from BVT, a Christchurch engineering firm (the BVT report), which questioned the prudence of fitting a guard and recommended that Talleys seek to have the improvement notice cancelled.

[5] On 24 July 2017, Ms Lee-Anne Milne, a reviewer retained by WorkSafe as a regulator, confirmed Mr Conroy’s decision to issue the improvement notice.

[6] Mr Conroy arranged with Talleys to visit the site again on 3 August 2017, taking with him Mr Ngai Weng Low, a technical specialist employed by WorkSafe with expertise in engineering solutions for machinery such as conveyers. They held a discussion with Mr Nathan Howes, Talleys’ human relations manager, at the site. They conveyed Mr Low’s opinion that it was possible to install a guard to protect employees when the conveyer was elevated out of the bath for cleaning.

[7] Talleys then filed an appeal in the District Court against the regulator’s decision and an application to WorkSafe for a stay of the effect of the improvement notice. The application was dismissed and thereafter Talleys installed a fixed guard which did not incorporate material features recommended by Mr Low.

The District Court appeal

[8] The appeal was heard in the Nelson District Court by Judge Zohrab on 29 September and 23 November 2017.
[9] The basis for a first appeal to the District Court is provided for in s 135 of the Act, namely that the challenged decision is unreasonable. The parties agreed that this reflected the administrative law notion of unreasonableness and that was applied by the Judge. In short, Talleys had to establish that Mr Conroy’s decision to issue the improvement notice was not one that was reasonably open to WorkSafe.

[10] A preliminary issue before the District Court was whether the subject of the appeal was Mr Conroy’s original decision to issue the improvement notice or Ms Milne’s internal review. The Judge decided that it was the original decision, and there was no issue before me that the Judge’s reasoning in coming to that view was wrong.

[11] The essence of Talleys’ criticisms of Mr Conroy’s decision was that he had given primacy to the various health and safety obligations on a person conducting a business or undertaking (PCBU) required by the Act and other statutory instruments to provide all reasonably practicable safety measures for those working in the business. Arguably, Mr Conroy’s approach treated this sequence of obligations as independent of other obligations on Talleys, and ignored its inter-dependent obligations in the food safety context to devise processing systems that minimised the prospects of producing contaminated food products. In the production of half shell mussels, a particularly significant concern is to control the food-borne pathogenic bacterium Listeria monocytogenes (Listeria).

[12] Talleys’ stance is that the reduced safety risk to employees from installation of a guard competes with the increased risk that cleaning systems with a guard in place will be insufficient to prevent Listeria contamination. Talleys submits that when these two risks are balanced against each other, WorkSafe’s decision to require the installation of a guard was unreasonable.

The evidence

[13] The BVT report provided a risk treatment analysis for Talleys. Its authors were noted to be Mr Tim Mead and Mr Louw Butler. At the hearing in the District Court, the opinions expressed in the BVT report were the subject of evidence from Mr Matthew Bishop, the managing director of BVT, who confirmed his involvement
in preparing the BVT report. The executive summary of the BVT report treated the effect of the improvement notice as constituting a requirement for a fixed guard to be installed on the conveyer. BVT’s recommendation was that this requirement should be appealed, and that alternative plans to reduce the risk of injury be implemented.

[14] The BVT report, whilst prepared by engineers, included assumptions about the risks of exposure to Listeria. The extensive appendices to the report included a technical report by ESR on the risk profile of Listeria in processed, ready-to-eat meats, and BVT’s analysis drew on the contents of that. In cross-examination, Mr Bishop said they acquired sufficient expertise from a desktop review of information available about Listeria.

[15] Mr Howes also completed three affidavits in support of the appeal. His evidence addressed the importance of thorough cleaning and sanitising of equipment, including the conveyer in question, and the impairment to the most effective cleaning methods created by guards installed at the point where Mr Tan had caught his hand. Mr Howes addressed the alternative means of managing the risk of employee work injury by training and signage. He supported the engineering analysis undertaken by BVT that, in weighing the competing risks, the increased risk of Listeria contamination by inadequate cleaning outweighed the reduction in risk of employee injury obtained by installing a guard, when account was taken of the other available means of reducing that risk during the cleaning process.

[16] In response to the appeal, Mr Conroy prepared a report that summarised the matters he had taken into account in deciding to issue the improvement notice. His report annexed all the documents to which he referred, including file notes taken by various WorkSafe employees in dealing with the matter, reports of previous incidents at Talleys’ properties that had been investigated by WorkSafe, best practice guidelines issued by WorkSafe, photographs of the equipment involved and the engineering expert’s report from Mr Low.

[17] Mr Low also completed two affidavits and was cross-examined at the hearing. He identified three options for engineering solutions to address the risk of injuries to employees during the cleaning process. They included interlocked and removeable
guards across the top of the conveyer and guards preventing cleaners reaching the nip points on the conveyer. In the proposed solutions, electrical cut-offs would be provided so that when the guards were removed, power would be shut off to prevent the conveyer moving. A further option was to have light beams monitoring movement adjacent to the conveyer. If the light beam was interrupted by an employee’s body movement in the area adjacent to the nip points, power would similarly be cut off to stop the conveyer moving.

[18] To respond to BVT’s assessment of the risk of Listeria contamination, WorkSafe obtained a report from Mr Graham Fletcher, who is the team leader of seafood technologies at the New Zealand Institute for Plant & Food Research Limited in Auckland. Mr Fletcher’s professional speciality is research into the safety, spoilage, shelf-life, processing and packaging of chilled seafood and horticultural food safety. He has 37 years’ research experience and is an expert in microbial safety of seafood.

[19] Mr Fletcher’s report acknowledged the control of the Listeria bacterium as “[o]ne of the most difficult food safety and compliance risks for mussel processors”. However, he opined that the extent of the risk was less than attributed to it in the BVT report. Whereas BVT characterised the risk as “likely”, Mr Fletcher considered it as only “possible”. Mr Fletcher acknowledged the seriousness of the health risks that could arise for victims of Listeria poisoning who have low resistance or increased susceptibility to such bacterial infection. However, he considered the biggest risk from failing to eliminate Listeria is not that of causing illness to consumers, but the commercial risk of having to pay for expensive recalls and the resulting loss of brand value. This point was made particularly in relation to exports to the United States where very tight restrictions on the presence of the bacteria apply.

[20] Mr Fletcher was available for cross-examination at the hearing, but was not required.

The District Court judgment

[21] Judge Zohrab undertook a thorough review of the evidence given in the District Court, which comprised both affidavits and oral evidence including cross-
examination.² There was no substantial argument with the accuracy of the Judge’s record of the evidence. Rather, Talleys challenged the legal approach and the conclusions that the Judge had come to on the evidence.

[22] The Judge’s analysis focused on the different assessments of the extent of the risk of Listeria presented by Mr Bishop for Talleys, and Mr Fletcher for WorkSafe. The essence of Judge Zohrab’s reasoning is in the following paragraphs:

[256] However, Mr Fletcher is an expert with respect to Listeria and with all due respect to Mr Bishop, whilst Mr Bishop has looked at various credible sources of information, he is not an expert. Mr Fletcher is familiar with the historical context in which half shell mussels were sold and that there had not previously been outbreaks of illness. Mr Fletcher is of the view that Mr Bishop has significantly overstated the risk presented by the guarding of the machine with respect to the increased risk of Listeria, and I agree with Mr Fletcher’s opinion. In my view, the overstated risk has meant that BVT has recommended that Talley’s move to administrative controls of the risk, whereas a more objective consideration and application of s 30 of the Act, and, regulation 6 of the GRM Regulations, would suggest that installation of guarding and engineering controls or interlocks would have been more appropriate. In reliance upon Mr Bishop’s overstatement of the risk, Talley’s failed to engage in any meaningful assessment of guarding options which could achieve the dual purpose of protecting both their workers, and also the consumers of their mussels.

[257] I acknowledge, as does Mr Fletcher, that any form of guarding will increase the risk of Listeria. I acknowledge also the potential consequences for consumers of a Listeria outbreak. However, given the nature of the risk presented by the unguarded nips, it is a matter of settling on an appropriate guard and, more particularly, there is no requirement that the guard be fixed.

[258] Mr Low has identified several guarding options, all of which present substantially less risk with respect to food safety than posed by the guard installed by Talley’s, and which could have been discussed with Talley’s if they had taken up the option of an on-site discussion.

[259] In my view, guarding options of the type suggested by Mr Low, such as a guard in combination with interlocks and or light curtains, together with a suitable cleaning regime implemented by Talley’s, could as suggested by Mr Fletcher, contain the risk to “very small”.

[260] In my view, the appellant has failed to discharge the onus on it to satisfy me that the inspector’s decision was unreasonable. In my view, it was reasonably open to Mr Conroy on the evidence I have heard to believe that Talley’s was breaching the Act, or Regulations, by continuing to operate the conveyor without taking the corrective action required by the improvement notice.

² Talley’s Group Ltd v WorkSafe New Zealand, above n 1, at [47]–[179].

The High Court appeal

[23] This second appeal to the High Court is one brought under s 124 of the District Courts Act 2016, and is a general appeal. Applying the standard described in Austin, Nichols & Co Inc v Stichting Lodestar,³ Talleys has to establish that this Court should differ from the District Court’s decision. It is only if the High Court considers the decision under appeal is wrong that interference with it is justified.

[24] Mr Malone submitted that Judge Zohrab had erred in treating Mr Fletcher’s evidence as tipping the balance in the weighing of risks respectively of Listeria contamination in terms of food safety, and further injury to employees during the cleaning operation. Arguably, if the effect of Mr Fletcher’s evidence was correctly interpreted, the weighting on a numerical matrix used by Mr Bishop would still show that the risk of Listeria contamination had a greater value than reducing the risk of physical injury to the cleaning staff from the unguarded nip points on the conveyer.

[25] In his evidence, Mr Bishop said BVT had adopted a matrix for risk assessment that gave a value of 20 to the high risk rating of Listeria contamination, based on the potentially catastrophic consequences and the likelihood of it occurring. A value of 9 was given to the moderate risk rating of injury to cleaning employees. The matrix was used to assess the overall reduction in risk from installing guards to the conveyor. On BVT’s assessment, the risk to employees would be reduced by a smaller margin than the increase in risk of Listeria contamination once the cleaning operation was compromised by the presence of the fixed guard.

[26] The ranking of 20 depended on BVT’s classification of the Listeria risk as likely. In Mr Fletcher’s report, having stated he was unfamiliar with the matrix BVT had used, he offered the comment that the difference between BVT’s “likely” and his own “possible” would reduce the risk rating from 20 to 15 if another matrix he had previously used was applied.

[27] Assuming the matrix is reliable and that Mr Fletcher’s qualified suggestion was adopted to the different matrix, then on BVT’s matrix, the more important priority

³ Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.

would still be minimising the risk of Listeria contamination. This was because BVT ranked the severity of consequences of the Listeria risk more highly.

[28] Having reviewed all the evidence, I am mindful that Judge Zohrab had the advantage of observing Mr Bishop during cross-examination. Neither of us have been able to assess Mr Fletcher being questioned on the terms of his report. The important difference between them is on a topic in which Mr Fletcher had a long-established and credible expertise. In contrast, Mr Bishop, as an engineer, has considered generic reports on the topic as a non-expert. Mr Bishop was not inclined to accept any inadequacy in the basis for his opinion on the extent of the risk of Listeria contamination. Having reviewed the transcript of all his relatively thorough cross- examination by Ms Brabant, I am inclined to accept her characterisation of his evidence as somewhat combative or adversarial, as he was not prepared to make any concessions in the face of well-founded propositions inconsistent with the opinions he held to.

[29] Two other issues arise in placing reliance on the matrix used by BVT and the relative ranking of the risks that he identified in reliance on it. First, the steps undertaken to build up the numbers used to rank risks comparatively was described by Mr Malone as “an evaluative process”: in effect, the numbers depend on value judgements. Irrespective of the range of factors cited in arriving at the numbers used in the matrix, in the end they are determined to a material extent by perceptions of the relative importance of risks being considered. Given Mr Fletcher’s conclusion that the risk of Listeria contamination has been significantly overstated, there is sufficient concern raised as to the remaining risk ranking by BVT.

[30] Secondly, there is scope to doubt the accuracy of the factual assumptions made in the BVT analysis of the extent to which the addition of guards would impair the cleaning process. The BVT report characterised WorkSafe’s requirement as one “for fixed guarding to be installed”. The report’s analysis of impairment to thorough cleaning of the conveyer then assumed that a fixed guard would remain permanently in place whilst cleaning operations occurred. A fixed guard of the type contemplated by BVT was not among the options that Mr Low suggested on behalf of WorkSafe and
which options he would have aired with a BVT representative had they attended during Mr Low’s visits to the Motueka plant, as invited.

[31] The parties took different interpretations from the terms of the improvement notice. WorkSafe was inclined to deny that its terms positively required the fitting of a guard. Mr La Hood submitted that the identified contravention of the Act in exposing workers to trapping hazards in unguarded nip points of the conveyer during cleaning was accompanied only by the “recommended prevention or remedial measures” of fitting guards. Talleys and BVT took the terms of the improvement notice as requiring the fitting of guards. Despite the subtlety of WorkSafe’s argument that the terms of the notice did not preclude alternative means of remedying the perceived contravention, I accept that it was reasonable for Talleys to treat the practical effect of the improvement notice as a requirement to fit some form of guard.

[32] However, that does not justify treating the requirement as one for fixed guards. The dialogue WorkSafe was keen to have with Talleys’ personnel included suggestions for alternative types of guards, including those that could be removed during cleaning so long as the conveyer was turned off.

[33] The relevance of the difference is that BVT’s assessment of the impairment of the cleaning of the conveyer is overstated by the extent to which fixed guards make the cleaning more difficult than guards which are able to be removed during cleaning in a controlled fashion.

[34] Mr Malone sought to persuade me that BVT’s analysis was not done on this latter basis. Rather, the analysis was sufficiently broadly based to accommodate differences in the feasibility of thorough cleaning with various forms of removable guards that would allow access to the conveyer whilst it was turned off. Mr Malone cited several exchanges in the cross-examination of Mr Bishop dealing with the hypothetical circumstances in which guards other than the fixed guard that Talleys had installed were used for illustrative purposes.

[35] I do not accept Mr Malone’s characterisation of those passages from Mr Bishop’s evidence. He was responding to questions about circumstances different
from those which BVT had assumed to be the case in settling the comparative risk analysis in its report.

[36] I am satisfied that the BVT report attributed characteristics to a fixed guard that suggested the impairment to thorough cleaning of the conveyer would be materially worse than if any of the different solutions for guarding the conveyer as proposed by Mr Low were adopted.

[37] Accordingly, I respectfully agree with the assessment of risks as determined by Judge Zohrab. The effect of Mr Fletcher’s analysis is that the risk of Listeria is manageable. The increased risk of Listeria contamination from the addition of guards of the types proposed by Mr Low is insufficient to outweigh the improvement in employee safety that would thereby be achieved. It follows that I also agree with the Judge that Talleys cannot make out that Mr Conroy’s decision in issuing the improvement notice was not one reasonably open to him.

[38] Accordingly, the appeal is dismissed. I will receive memoranda on costs, limited to five pages, if the parties cannot agree.

Dobson J

Solicitors:

Solutions Law Office, Stoke for appellant

Luke Cunningham & Clere, Wellington for respondent