In a landmark decision issued on 26 November 2024, the District Court held that former Ports of Auckland (POAL) CEO Tony Gibson had failed to exercise his duty of due diligence as an "officer" of a PCBU under the Health and Safety at Work Act 2015 (the Act).
On 21 February 2025, Mr Gibson was sentenced and ultimately ordered to pay a $130,000 fine and $60,000 in costs.
The prosecution
As set out in detail in our note on the prosecution decision, the prosecution related to the tragic death of Mr Kalati in 2020 who worked at the port and was crushed when a suspended container fell on him from a crane.
Mr Gibson was found to have failed to ensure POAL clearly documented and implemented exclusion zones around operating cranes and to ensure that POAL verified its processes and procedures regarding these exclusion zones.
The sentence
Judge Bonnar KC had previously found that Mr Gibson had committed an offence under s 48 of the Act. In other words, the due diligence failures made it materially more likely that stevedores at the port would be exposed to the risk of death or serious harm. The Judge's finding rendered Mr Gibson liable for a fine of up to $300,000.
Judge Bonnar KC held that $140,000 was an appropriate starting point for a fine. The Judge accepted that a discount for good character should be applied, discounting the fine to $130,000.
Maritime New Zealand also sought costs of $180,000. The judge awarded $60,000 in costs, acknowledging that it was the first time that an officer of a large New Zealand organisation had been charged and that this could be considered a test case.
Mr Gibson may yet appeal the conviction and / or sentence. He has 20 working days from the date of his sentencing to do so.
Lessons for officers
While all cases have their unique features, the fine will set a benchmark for comparison in future cases. It is notable that the fine was set at about half the maximum fine, even though there appears to have been no suggestion that Mr Gibson was reckless or was deliberately underemphasising safety at the port.
In his decision finding Mr Gibson guilty, the judge had noted that Mr Gibson was an engaged and conscientious CEO, who had introduced a number of safety measures. However, there were also failures to take steps that should have been taken. The sentencing is another reminder to officers of the importance of systems to make sure that they do meet the standards required, including:
- having good quality information about the way work is actually being done (including compliance with safety systems), and not just relying on how it ought to be done; and
- ensuring that initiatives or recommendations are followed through to their conclusion and, if they cannot be implemented, properly documenting the reasons for that decision.
For more information, see our note on the prosecution decision.