The Court of Appeal in RH and JY Trust v WorkSafe New Zealand [2026] NZCA 12 has recently ruled that a trust can be considered a "person" under the Health and Safety at Work Act 2015 (HSWA). This means that a trust can be prosecuted and fined under HSWA despite the fact that trusts are not legal entities.
What the case was about
The case is a particularly sad one. A six-year-old child was tragically killed after being caught in machinery on a farm in 2020. WorkSafe laid charges against a number of entities, including the trust whose trustees owned the farm and against those trustees individually. The trust was charged as a PCBU (that is, a person conducting a business or undertaking). This gave rise to the key question – is a trust a "person" for the purposes of HSWA?
The conventional answer is "no". Trusts involve obligations that are owed by the trustees, but the trust itself is not a legal person, and all actions are legally done by the trustees. Legislation sometimes deems a trust to be a person for specific purposes but the HSWA does not, despite having a specific definition of person. The HSWA defines "person" as including a "body of persons, whether corporate or unincorporate". WorkSafe argued that this was wide enough to include a trust.
Three courts have now considered the question, each coming to a different conclusion.
In 2022, the District Court ruled that the trust could not be charged as a "person". In 2023, the High Court agreed that a trust is not a "person" but held that the trustees of the trust collectively could be a "body of persons" and could be charged collectively as a PCBU. The result was practically the same as if it were the trust itself that was charged.
The Court of Appeal has gone a step further in deciding that a trust can be a "person" for the purposes of HSWA.
The Court of Appeal decision
The Court of Appeal acknowledged that a trust is not a legal person and is "essentially a set of obligations that the persons who are trustees have" but held that this was not determinative.
The Court's reasons included:
- the maximum prescribed fines should be available against operations that involve a trust structure rather than the lower fines that apply to individuals – that requires trusts to be prosecuted;
- the definition of officer contemplates a wide range of unincorporated bodies to be PCBUs, and trusts should be included; and
- the prohibition on providing an indemnity for HSWA fines would mean that a trustee prosecuted individually would be unable to call on the trust assets. This was contrary to principles of trust law and was not thought to be what Parliament would have intended.
Dissent by Justice Whata
Whata J dissented, agreeing with the High Court that a trust itself would not be a person under the HSWA and that a prosecution could be brought against trustees in their capacity "as trustees", as is routinely done in civil litigation. Fines would be based on individual liability and trustees would have automatic recourse to trust property. Whata J found, contrary to the view of the majority of the Court, that would not breach the prohibition on a person indemnifying another for fines because the trust is not a person.
Why is this important and what should trusts be doing?
Trusts are common structures in New Zealand and often operate as businesses.
WorkSafe has throughout this prosecution indicated a clear preference to prosecute trusts rather than individual trustees. The Court of Appeal decision means that it can now do so. That in turn makes it more likely that other trusts will be prosecuted but suggests that it is less likely that individual trustees will be prosecuted.
That may be somewhat reassuring for some trustees. However, the decision is also significant in recording the Court of Appeal's view that trustees are in the position of officers, meaning that they will have distinct personal obligations to conduct due diligence under s 44 of the HSWA.
While appeal to the Supreme Court may be pursued, the Court of Appeal decision is the law for now, and for the foreseeable future.
The decision is a reminder that trusts should follow sound business practices in relation to health and safety – health and safety risks must be understood and managed, trusts should carry insurance that covers the cost of defending a prosecution, and trustees must understand their obligations, including their obligation to undertake due diligence of health and safety matters.
Trustees also need to be aware that how they will be "seen" by the courts will now be different in different contexts. In the health and safety context, the "trust" can be the relevant actor and defendant in any prosecution, but in all other contexts there is no such thing as a trust. Instead, there are trustees who face personal liability (subject to a right of indemnity etc) for their actions, and will be the relevant defendant in any litigation.