By: Misha Heneghan, Richie Flinn, Neil Beadle, Matt Hutcheson, Michael Cavanaugh, Harriet Birch, Caitlin Barclay, Kerry Moor, Elliot Copeland, Thomas Cunningham, Isabelle Kwek, Grace Guy and Isabella Klisser

RH and JY Trust v WorkSafe New Zealand [2026] NZCA 12

The Court of Appeal has, by majority found that a trust, distinct from the individual trustees, can be prosecuted under the Health and Safety at Work Act 2015. The decision has significant implications for the conduct of prosecutions under that Act if it prevails.

Overview of the Decision

The case involves a tragic death of a child on a farm. The farm is held by the trustees of a family trust, which the Court acknowledged to be a common structure in New Zealand.¹ WorkSafe prosecuted the trust (as an entity) and in the alternative against the individual trustees. The trustees now consist of an individual and a corporate trustee.

The sharemilker of the farm was prosecuted, pleaded guilty and sentenced in 2022, but the trust and trustees challenged WorkSafe’s charges against the trust as an entity.

Majority and Minority Reasoning

The majority found that the definition of ‘person’ in the Act was to be interpreted as including the trustees acting collectively, or as a ‘body of persons’. Either the trust itself can be named, or the trustees in their capacity as trustees acting collectively (in which case the trustees are not defendants in any individual capacity).²

Insurers are well aware that the Act prohibits an insurance policy or contract of insurance from indemnifying any fine, and that it is an offence to provide indemnity.³ Of note, the majority found that the prohibition is consistent with the proposition that trustees are akin to ‘officers’ under the Act, and in that capacity they cannot be indemnified from trust assets, but a trust as defendant would have recourse to trust assets to address the penalty.⁴ We comment on that further below.

In the minority decision Justice Whata declined, in the absence of express words, to impute to Parliament an intention to derogate from the law relating to trusts and trustee liability. He determined trusts and trustee collective entities do not exist as “persons”. Individual trustees, and only individual trustees, “conduct” business using trust assets in law and fact. “That is a matter of substance, not form. It is both the starting and end point of the analysis.” As to the prohibition on indemnity under the Act, he found that does not apply because the trustees are not being indemnified ‘by another person’, because the trust is not a person. They are in no different position to that of a sole trader paying business related liabilities.⁵ He accepts that even if he is wrong on that issue, he would hold a defendant ‘as trustee’ may pay the fine out of the assets of the trust.

Practical Implications for Insurers

The issues of law are interesting to lawyers, but what is the practical effect of this development for insurers?

If the decision stands we are likely to see prosecutions under the Act of trusts as defendant, distinct from naming trustees individually, although it would remain open to the regulator to prosecute individual trustees on similar principles to those which apply to ‘officers’ under the Act.

The trustees in this case clearly view this as an issue of principle given they brought this appeal on the basis that the law relating to trusts and trustee liability applies given the Act does not expressly say otherwise. The inference we draw is that there is a reluctance by a corporate trustee to accept collective responsibility which will then apply in all cases, irrespective of the role of each trustee. That might be seen as a dangerous precedent for corporate trustees who are in the business of acting as such.

But the decision may give corporate trustees some comfort with the finding that the prohibition on indemnity under the Act does not prevent recourse to trust assets to address the penalty. Arguably if the corporate trustee is not named as a defendant, any assessment of the ability to meet the fine ought to be confined to the trust assets. There have been company PCBU cases where the fine has not been reduced given the ability of directors to support the company, but corporate trustees who have no beneficial interest in a trust appear to be distinguishable from those cases.

The finding endorses the regulator prosecuting trustees (distinct from the trust) in their capacity as trustees acting collectively and in that event it is said they are not defendants ‘in any individual capacity’. That still begs the question whether a criminal conviction would be entered against named trustees. A criminal conviction is of itself a penalty with consequences. Arguably a prosecution naming a trust would in those circumstances be preferable to a prosecution of trustees in their capacity as trustees.

In reaching their decision the majority found that there will likely be a presumption that collective decision-making by the trustees is involved but ultimately who is making or has the responsibility to make relevant decisions is a matter of fact.⁶ In this case there is said to be a basis for the Crown to allege the relevant decision-making was made collectively by the trustees, and not the individuals. That still raises practical questions as to whether a trust in any given case is an appropriate defendant given the onus of proof beyond reasonable doubt to prove collective decision-making. While that may be a question in any case, query whether pragmatism on the part of the trustees might prevail given the alternative of a trial to determine individual liability.

Perhaps the practical effect of this decision is that there is less likelihood of conflict of interest between trustees if there is acceptance of collective responsibility resulting in a conviction in the name of the trust only and agreement that any fine can be met from trust assets. All cases are fact dependent, but that may lead to a saving of defence costs for insurers.

Whether there is an appeal to the Supreme Court by the trustees remains to be seen.

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