The Supreme Court has recently heard arguments in an appeal against the Court of Appeal’s decision that a trust, or the trustees of a trust acting collectively, can be a “person” charged with offences under the Health and Safety at Work Act 2015 (HSWA).

The Supreme Court’s decision is expected to be issued later in 2026 and should provide much needed clarity regarding the application of the HSWA to trusts with two or more trustees. HSWA amendments may also follow.

If the Court of Appeal’s approach is upheld, a trust or its trustees - collectively and in their capacity as trustees - may be prosecuted for breaches of the HSWA, with higher maximum penalties than can be imposed on an individual. Under that approach, a trustee may potentially be exposed to collective liability for the acts or omissions of their co-trustees.

You can read our previous article on the High Court decision here, and the full Court of Appeal decision is available here.

The facts

On a visit to a dairy farm owned by the RH & JY Trust (Trust) in 2020, a young child was fatally injured after his jacket was caught in farm machinery.

The trustees of the Trust - two individuals and a trustee company at the time of the accident - were the legal owners of the farm, and the farming operations were primarily carried out in the Trust’s name.

WorkSafe New Zealand (WorkSafe) brought charges against the Trust, and in the alternative the trustees, as a “Person Conducting a Business or Undertaking” (PCBU) that had breached it duties and committed an offence under ss 37 and 48 of the HSWA.

The charges alleged failure to comply with the PCBU duty to ensure that the farm was without risks to the health and safety of any person, with that failure exposing an individual to a risk of death or serious injury and constituting an offence.

The issue

WorkSafe’s approach to charging the Trust or its trustees raised the issue of whether the Trust or its trustees collectively can properly be viewed as a “person” as defined in s 16 of the HSWA, for the purpose of applying the PCBU definition in s 17 of the HSWA and other provisions of the HSWA.

This is a critical issue, because it impacts on the application of the HSWA’s duty, offence and penalty provisions, and also the application of the HSWA’s prohibition of insurance and indemnification in relation to liability to pay a fine under the HSWA, to a trust with two or more trustees.

The lower courts

In 2022, the District Court held that charges could not be brought against the Trust or its trustees collectively as a PCBU; charges could only be brought against each trustee individually. The court considered that interpretation and application of the HSWA to be consistent with case law and trust law principles supporting the position that a trust is not a person.

In 2023, the High Court disagreed. While the court accepted that the Trust itself is not a discrete entity that could be prosecuted as a PCBU, it held that the trustees collectively are “a body of persons… unincorporate” as referred to in the definition of “person” under s 16 of the HSWA and the trustees collectively can therefore be prosecuted as a PCBU.

In 2026, the Court of Appeal, by a 2:1 majority, held that although a trust is not a legal person, the Trust, in the sense of the trustees of the Trust acting collectively in their capacity as trustees, can be a “person” and therefore a PCBU as defined under the HSWA, and that either the Trust or its trustees can be named as the PCBU when charges are laid.

The Court of Appeal majority also stated that whether a trust is named or its trustees collectively are named as the PCBU charged, the trustees are the defendants in their capacity as trustees of the trust, not in any individual capacity.

The court also considered that with the Trust or its trustees collectively being the person charged for breach of duty as a PCBU:

• the maximum potential fine for the alleged offence under s 48 of the HSWA would be the $1.5m maximum for non-individuals (not a lower maximum for individuals); and

• the insurance and indemnity prohibitions under s 29 of the HSWA would not prevent the trustees from using, or making any available indemnity claim against, the Trust’s assets to pay any fine imposed.

In contrast, the court indicated that if an individual trustee is separately charged for breach of duty as an “officer” of a PCBU, the maximum potential fine would be lower ($300,000 for an offence under s 48 of the HSWA) but s 29 of the HSWA may preclude the trustee from using, or making any indemnity claim against, the Trust’s assets to pay any fine imposed.

Arguments on appeal

On appeal to the Supreme Court, counsel for the trustees of the Trust, argued that each trustee individually - not the trustees collectively, and not the Trust itself - is a PCBU. They submitted that the orthodox legal position is that trusts do not have separate legal personality and they are not equivalent or comparable to companies, partnerships and other bodies that may be treated as separate persons, so that neither a trust nor its trustees collectively is a “a body of persons… unincorporate” that can be “person” and a PCBU under the HSWA.

They further argued that the context and purpose of the HSWA do not require a departure from that orthodox legal position, and that the Court of Appeal’s decision raises the spectre of expanding criminal liability in New Zealand by creating legal “personhood” for trusts or collective criminal liability for trustees, giving rise to practical difficulties with criminal procedure and enforcement.

WorkSafe argued that the HSWA clearly provides for an unincorporated body of persons to be a “person” who can be a PCBU, and that a trust or its trustees collectively is such a “person”. WorkSafe argued that this approach to the HSWA is no different from other areas of law (such as resource management) that provide for an unincorporated body to be prosecuted where it has an internal structure that enables it to make collective decisions, and the trustees of a trust are an identifiable body of persons that makes collective decisions.

Our view

The Supreme Court’s decision should provide much needed clarity regarding the application of the HSWA to trusts and trustees, which is an important issue for trustees and trust governance. Ideally, the court will clearly articulate how the “person”, “PCBU” and “officer” definitions, maximum penalty provisions, and insurance and indemnity prohibitions under the HSWA are to be applied to trusts with two or more trustees.

We expect that the Supreme Court may be inclined to agree with the Court of Appeal majority’s position that the trustees of a trust, collectively, can be a “person” and a PCBU under the HSWA. The Supreme Court may also be inclined to agree that, for any breach of duty by trustees collectively as a PCBU, the higher maximum fines for non-individuals can apply and the insurance and indemnity prohibitions under s 29 of the HSWA do not preclude use of the trusts’ assets to pay any fine imposed. But there is sufficient uncertainty that the court could take a different view on those points.

In addition, and regardless of whether it upholds or overturns the Court of Appeal’s decision, the Supreme Court will most likely have something to say about how the HSWA should or could be amended to clarify its application to trusts and trustees.

If the Court of Appeal’s decision is upheld, trustees may face collective liability for larger fines including potential exposure to such liability for the acts and omissions of their co-trustees. While this may be mitigated confirmation that s 29 of the HSWA does not preclude the use of trust assets to pay any such fines, trustees may still be exposed to liability if the trust’s assets are insufficient to cover, and insurance is not permitted to cover, the full amount of the fines.

Accordingly, all trustees - whether or not the trustees are involved in the day to day operation or management of the trust’s operations - should be reviewing their position and ensuring that any trust business or undertaking has appropriate health and safety policies, procedures, and governance arrangements in place, to mitigate the risk of any HWSA breach and prosecution.

The appropriate trustee arrangements for trusts should also be considered. For example, if a trust has a single corporate trustee (eg a company trustee, or in the case of a charitable trust an incorporated board), it seems clear that, for HWSA purposes, the corporate trustee is the “person” who may be a PCBU and the trustee’s board members would then be the PCBU’s “officers”. Aspects of the Supreme Court’s decision might, however, have an impact on this type of trust as well.

Get in touch

We will provide an update on this important and developing area of law once the Supreme Court releases its decision. In the meantime, please contact one of our specialists if you would like to discuss your (or a trust’s) health and safety obligations.

Special thanks to Nick France for his assistance in preparing this article.