DEPT OF LABOUR V DIVECO LTD CA CA98/04

DEPT OF LABOUR V DIVECO LTD CA CA98/04 8 November 2004IN THE COURT OF APPEAL OF NEW ZEALAND CA98/04BETWEEN DEPARTMENT OF LABOUR Appellant AND DIVECO LIMITED Respondent Hearing: 3 August 2004 Coram: McGrath J Glazebrook J O'Regan J Appearances: J C Pike for Appellant G M Illingworth QC and L G Campbell for Respondent Judgment: 8 November 2004JUDGMENT OF THE COURT DELIVERED BY O'REGAN J[1] This is an appeal on two questions of law relating to the Health and Safety in Employment Act 1992 and the Health and Safety in Employment Regulations 1995. [2] The appeal arises from a prosecution of the respondent, Diveco Limited for a breach of s 16(1)(b)(ii) of the Act and r 26(2) of the Regulations. Diveco was convicted on both counts in the District Court, but its appeal to the High Court against those convictions was allowed by Heath J: Diveco Limited v Department of Labour HC AK 88/03 11 November 2003. [3] The appellant (the Department) now appeals to this Court, with the leave of the High Court, on two questions of law. The questions were articulated by Heath J in his leave judgment (HC AK CRI 2003-404-138 9 March 2004) as follows:The first is whether the boat from which the diving operations were carried out was a "place of work" for the purposes of the Act. The second is whether Diveco was in "control" of the water in which the diver was diving.Facts[4] The factual background was summarised in the following terms by Heath J in his substantive judgment at [12]-[19]:[12] Diveco carried on a business involving commercial diving. It was contracted by another company to take samples of sediment from the bottom of the Rangitoto Channel in the Waitemata Harbour. [13] The party that engaged Diveco was, itself, providing consulting services to Ports of Auckland Ltd. The port company, for its part, was seeking information as part of its application for a resource management consent for a proposal to dredge certain portions of the Rangitoto Channel. [14] Diveco was engaged to provide diving and support personnel to take the samples and to determine the depth of soft sediment by the use of a rod. The work included monitoring seabed disturbance by video camera. [15] Diveco charged its customer for the provision of a vessel, fuel, a digital camera, a dive supervisor, a diver and an operator on the vessel. [16] Diveco separately engaged Mr Morgan to carry out the diving work. He was engaged as an independent contractor. The evidence established to the satisfaction of the Judge that two directors of Diveco were present in the vessel when dives were undertaken. Also present was a technician employed by the company engaging Diveco. The technician's job was to bag, label and log the seabed samples as they were brought to the surface by the diver. [17] The Judge accepted that the term "bounce diving" was descriptive of a method of diving where the diver spends less than 10 minutes at the surface in the course of a sequence of separate dives. On the evidence, the Judge found that "bounce diving" increased the risk of contracting decompression illness. The Judge also found, as a matter of fact, that "bounce diving" was a "hazard" for the purposes of the Act because "it is an actual or potential cause or source of harm in that it increases the risk of" decompression illness. [18] After the completion of work on 22 September 2000, Mr Morgan began to display symptoms subsequently diagnosed as being decompression illness. Mr Morgan was treated at the Devonport Naval Base in a decompression chamber over three days. He was discharged on 28 September 2000. [19] There is no dispute that decompression illness is caused by a sudden substantial change in atmospheric pressure. A hazard associated with diving is the building up of nitrogen in the body of a diver as a result of that change.Statutory provisions[5] Section 16 of the Act has been amended at various times, and there has been a significant amendment since the date of the alleged offending in this case. At the time of the alleged offence, s 16(1)(b)(ii) provided as follows:(1) A person who controls a place of work (other than a home occupied by the person) must take all practicable steps to ensure that no hazard that is or arises in the place harms- (b) People who are lawfully at work in the place- (ii) As contractors engaged by the person; [6] In order to understand that provision, it is necessary to refer to the definition of "person who controls a place of work" in s 2(1) of the Act. At the relevant time, this definition was as follows:"Person who controls a place of work" in relation to a place of work, means a person who is- (a) The owner, lessee, sub-lessee, occupier, or person in possession, of the place or any part of it; or (b) The owner, lessee, sub-lessee, or bailee, of any plant in the place.[7] The term "place of work" is also defined in s 2(1). At the relevant time the definition was:"Place of work" means a place (whether or not within or forming part of a building or structure) where any person is to work, is working, for the time being works, or customarily works, for gain or reward;[8] Section 16 (as it was at the relevant time) was inserted into the Act in 1998. The 1998 amendment dealt with certain concerns which arose from the decision of the District Court (Judge Abbott) in Department of Labour v Berryman [1996] DCR 121. In particular, Judge Abbott had noted in the Berryman decision that the previous s 16 omitted to use the defined term "person who controls a place of work"(and effectively repeated the words of the definition in the section itself). Also, the old s 16 imposed a duty to take all practical steps to ensure that people in the place of work, and in its vicinity, were not harmed by any hazard that was or arose in the place of work. The s 16 which is relevant to this case limited this duty in some respects, and, in particular, in relation to those who enter onto a place of work solely for the purpose of recreation and/or leisure. However, none of that has particular relevance to the present case. [9] In 2002, the Act was amended again, and we were told that some of the amendments made at that time were of particular significance in cases such as the present case. In particular: (a) An amendment was made to the definition of "place of work" in s 2(1), changing the words in parenthesis to read "(whether or not within or forming part of a building, structure, or vehicle)", thus making it clear that a place of work could be mobile; (b) A new s 2(3) was inserted. This new provision said:To avoid doubt, a person is in a place of work whenever and wherever a person performs work including in a place that - (a) the person moves through; or (b) itself moves.[10] Counsel for the Department, Mr Pike argued that the latter change made it clear that a place of work did not need to be a fixed structure. He said that the use of the term "to avoid doubt" showed that that had been the intention of the legislature prior to the amendment being made, and that the purpose of the amendment was simply to resolve doubt, rather than to make a substantive change to the law. On the other hand, Mr Illingworth QC, counsel for Diveco, suggested that the 2002 amendment was a substantive change, and was clearly intended to change the law as interpreted in the Berryman decision, where Judge Abbott found that a place of work did not include a place where a person was working in a transitory sense.[11] The 2002 amendments occurred after the decision of the District Court (Judge Walker) in Department of Labour v Nelson Dive Centre Limited [2001] DCR 1079. In that case, a charge under s 16 of the Act was dismissed. The charge related to the actions of a contractor for the defendant who conducted a diving training exercise in which two divers died, another was lost and presumed drowned and three others suffered serious harm. In that case, Judge Walker observed (obiter) at [90] – [92]:[90] It is not in dispute that the location in which Mr Stuart carried out the diving instruction was the place of work. It was a stretch of open sea to which all persons had unrestricted access. Neither the defendant nor Mr Stuart had any legal interest in the area of water, no licence or permission to be there. The types of interest set out in the definition involve control and at least a right to occupy the place to the exclusion of others. To suggest that Mr Stuart was in occupation or possession of the space taken up by the bodies of divers as they were carried through the water, as the informant argues, is to stretch the meaning of the words beyond their ordinary meaning. [91] Nor can it be said, in my view, that the defendant or Mr Stuart controlled the place of work by reason of ownership or bailment of equipment used in the location of the diving instruction relying, as the informant does, on the second limb of the definition. As Mr Powell submits to do so would mean that had Mr Stuart borrowed a length of rope from the garage at French Pass and employed it in the drift diving instruction, the owner of the rope would become a person who controlled the place of work. Such a result is clearly not what the legislation intended. The second limb of the definition must be taken to be intended to cover the situation where the plant is the place of work. [92] For the purposes of s16(2), under which the defendant is charged, it is not the hazard in the boat or in any of the equipment which harmed anyone, but the hazard in the water. It is clear from s16(2) that the Act is talking about a place and the second limb of the definition can have no application s16(2).[12] We have to say that we have not derived a great deal of assistance from the legislative history in this case. Whether Parliament intended to overrule theBerryman or Nelson Dive Centre cases is a matter of conjecture, and we prefer to approach the exercise in this case as a matter of statutory interpretation of the relevant provisions which were in force at the time of the alleged offending.Alternative charge was available[13] The submissions made on behalf of the Department emphasised the need to take a purposive interpretation, and to ensure that the purpose of the legislation, namely to protect employees and other people at work or affected by the work of other people, was not frustrated by an unduly technical interpretation. But that submission has little weight in the present context, because if the Department fails to obtain a conviction in the present case, that will not be an indicator that there is a lacuna in the law. On the contrary, the conduct of Diveco in the present case, based on the findings of fact made by the District Court Judge, appears to fit squarely within s 18 of the Act. That section requires a principal to take all practicable steps to ensure that no contractor or sub-contractor is harmed while doing any work that the contractor was engaged to do. [14] Diveco was not charged under s 18, apparently because the Department mistakenly believed that the diver in this case, Mr Morgan, was an employee of Diveco, rather than an independent contractor. So the Department initially charged Diveco under s 6, but withdrew that charge when it was realised that Mr Morgan was, in fact, a contractor. The Department tried to reinstate the charge under s 6 later, but a High Court Judge ruled that it should not be permitted to do so. And, by the time the Department realised its mistake, it was too late to prosecute Diveco under s 18.High Court decision[15] Heath J noted that the District Court Judge had taken the view that Diveco was the person in possession of the place of work and that the place where Mr Morgan was working was the place of work. However, he also noted that there had not been any analysis supporting that conclusion. He said that the argument that the waters in which diving took place could be regarded as a place of work had been demolished in the Nelson Dive Centre judgment of Judge Walker. He said that counsel for the Department had accepted the power of Judge Walker's analysis, and had not sought to persuade him that Diveco had any proprietary or possessory rightin respect of particular waters within in the Rangitoto channel where the diving occurred. Rather, counsel for the Department in the High Court argued that the vessel from which the diver prepared and initiated his dives was the place of work. [16] Heath J said that he was initially attracted to the argument made on behalf of the Department that it did not matter whether there was a non-mobile place of work, but had eventually rejected that argument. Rather, he determined that the parenthetical words in the definition of place of work referred to the question of whether the location forms part of a building or structure. He said that it could not be said that the boat from which the dives were made was within, or formed part of, a building or structure, and concluded that Diveco was not a person who controlled a place of work for the purposes of s 16. That meant that the s 16 prosecution failed, and, given the similar requirements of the Regulations, the prosecution under the Regulations also failed. [17] The Judge noted that, had the matter occurred after the 2002 Amendments had come into force, he would have regarded the ship as falling within the term "vehicle", and that it would therefore have been found to be a place of work.Submissions for the Department[18] Mr Pike argued that the place of work was the seabed on which the diver was working at any particular time, the relevant portion of the surrounding sea, and the vessel from which the dives were initiated. That submission differed from the approach taken by the then counsel for the Department in the High Court, where the argument was that the vessel itself was the place of work. That, in turn, differed from the approach taken by the Department's (different) counsel in the District Court. There it was argued that the place of work was "the Rangitoto channel". However, the District Court Judge decided the case on the basis that the place of work was the place in which Mr Morgan was working, on the basis that a place of work is created by a person in it. [19] Mr Pike noted that the 2002 amendments to the definition of "place of work" made it clear that a moveable place of work (a vehicle) was still a place of work.But he said that was the case even before the 2002 amendments. In support of that he referred to s 2(3) of the Act (before the 2002 amendments) which excluded the crew of an aircraft or ship from being in a place of work. He said this showed that the legislation did not intend to confine places of work to fixed structures or to people working from such structures. He also suggested that the new s 2(3), to which we have referred in para [9] above, now made it clear that a person is in a place of work whenever and wherever that person performs work, which reflects the position taken by the District Court Judge in this case. He noted that this amendment to the Act was made only to avoid doubt, and that this was always the legislative intention. [20] Mr Pike sought to distinguish the Nelson Dive Centre case, because that case was concerned with those diving in the sea, whereas the present case involved work being undertaken on the seabed, with the visit to the ship occurring between dives. He said that Diveco operated the vessel as a place of work and, through the medium of the vessel and the contract which Diveco had with Ports of Auckland Limited, was within the definition of a person who controls a place of work because it was the occupier of the anchored vessel, which, together with the channel bottom (the seabed) constituted a place of work. Alternatively, he suggested that the vessel was an item of plant and that the definition captured "the situation where work is carried out in any place in which a person who owns 'plant' places something in the place which becomes (at least) the thing on or in relation to which the work is centred". [21] Mr Pike emphasised the need to take an approach which reflected the subject matter of the Act and the social values involved in acting reasonably so as to prevent injuries to employees at a place of work. He said that both the intention and working of the Act supported the proposition that the vessel was a place of work. He said that the seabed was also a place of work, but that the sea itself was not a place of work but rather the hazard at the place.Submissions for Diveco[22] On behalf of Diveco, Mr Illingworth emphasised that charges under s 16 were inappropriate in the present case, and that the matter ought to have been dealtwith in terms of s 18. He noted the inconsistency in the approach taken by the various (different) counsel acting for the Department in the District Court, High Court and this Court. He said that the proceeding was an attempt by the prosecution to stretch the boundaries of s 16 in order to overcome difficulties that in reality had arisen from poor charge selection and pleading. He said that the Court should not artificially extend s 16 in order to "make the statute work", because it was clear that it would work without such stretching of the words and because it was important that employers and others were able to understand the obligations placed on them by the Act. [23] Mr Illingworth referred to the definition of "place" in the shorter Oxford Dictionary, and argued that this definition made it clear that in normal usage a place is a static location. He said a moving object such as a motor boat at sea may be in a place, but in ordinary usage would not be itself a place. He said that the legislation could deem a moving object to be a place, as had now occurred as a result of the 2002 amendment, but that this amendment was an extension of the concept of "place of work" over the position which applied at the time of the alleged offence. He said that, given the statutory context, it must have been the intention of Parliament that a place of work is an area which is capable of being subject to control by a person. He said a broad area such as "the Rangitoto channel" or a particular town or suburb was not capable of being subject to control by a person and therefore not capable of being a "place of work" for the purposes of the Act. [24] Mr Illingworth noted the definition of "person who controls a place of work", particularly the reference to "owner, lessee, sub-lessee, occupier or person in possession". He said that these terms indicated that a person had to have a particular legal status in relation to the place in order to have control for the purposes of the Act, and that this in turn meant that the place of work had to be a place which was subject to such legally definable control. He noted Judge Walker's comment in theNelson Dive Centre case that control required "at least a right to occupy the place to the exclusion of others", and the comment made by Judge Abbott in Berryman to the effect that an occupier was "someone who is in possession of the property or place in question and who has the right to exercise control over that property or place".[25] Mr Illingworth argued that a narrow approach must be taken to the reference in para (b) of the definition of "place of work" to an owner, lessee, sub-lessee or bailee of any plant in the place. He accepted that plant could include a vehicle (and implicitly accepted that a vehicle could include a ship). However he adopted the reasoning from para [91] of the Nelson Dive Centre case (quoted in para [11] above) to the effect that para (b) dealt only with the situation where the item of plant is the place of work. He said in this case the place of work was in fact the sea, and it was there that the hazard arose, rather than in the ship itself. He said, in any event, it was necessary to prove that plant was "in the place" (i.e. in the place of work), which again drew the focus back to the need to determine that there was a place of work which was under a particular person's control (as a lessee, sub-lessee, occupier or person in possession). [26] Mr Illingworth said that s 16 was designed to have a reasonably narrow compass, given the existence of other broad sections in the Act dealing with the responsibility of employers for employees and principals for contractors. He said that the Court should interpret s 16 to require proof of an adequate nexus between the various components of the charge and impose criminal liability only if the hazard arises in a part of a work place over which a person has actual control emanating from a specific legal interest in property or plant.Discussion[27] The questions of law articulated by Heath J ask whether the boat from which the diving operation was carried out was a place of work, and whether Diveco was in control of the water in which the diver was diving. However, the case put to this Court on the Department's behalf moved the focus of the argument from the boat and the water to the areas of the seabed from which samples were being taken by Mr Morgan. The different approaches taken by the Department in each of the Courts in which this matter has been considered emphasised the difficulties of bringing the situation which arose in this case within the ambit of s 16. As we have indicated earlier, we see no compelling case for a strained interpretation of s 16: the availability of a sanction under s 18 (and similar provisions dealing with employeesand others) means that there will be no frustration of the statutory purpose in the normal run of events if s 16 is interpreted according to the ordinary meaning of the words used. [28] In our view, the crucial provision in this case is the definition of "person who controls that place of work". Mr Pike defined the place of work as the boat, the seabed under the boat and the water between the two. Diveco was the owner, lessee, sub-lessee or person in possession of the boat, but not of the seabed and the water in between the boat and the seabed. So the question then arises as to whether Diveco was the "occupier" of the place of work as Mr Pike defined it. In the Nelson Dive Centre case, Judge Walker indicated at para [90] that there needed to be control and a right to occupy a place to the exclusion of others. In the Berryman case, Judge Abbot defined occupier (at 129) as "someone who is in possession of the property or place in question and who has the right to exercise control over that property or place". As Judge Abbot acknowledged, there is a degree of circularity in defining "person who controls a place of work" as someone who has the right to exercise control over the place. But we agree with Mr Illingworth's submission that the definition requires something more than mere occupation for a short period of time of a particular area, in circumstances where the occupier does not assert, and has no right, to exclude others from the area. We are satisfied that Diveco did not have the requisite degree of control of the relevant area of the seabed and the water above it in this case, and that it was not therefore the person who controlled the place of work as defined by Mr Pike in his submissions to us. [29] For completeness, we record that we would not have accepted a submission on behalf of the Department that the boat itself was the place of work. While the 2002 Amendment has extended the concept of "a place of work" to mobile places of work, we see that amendment as having extended the definition which previously existed, and which focussed on a fixed location. [30] Accordingly, we find that Diveco did not control the place of work as defined by the Department's counsel in this Court, and that, although Diveco did control the boat from which the diving took place, the boat was not a place of work as defined in the Act prior to the 2002 amendment. We also reject Mr Pike's contention thatDiveco had control over the place of work as he defined it (the boat, the seabed and the water in between) because it controlled the boat. In our view the statutory requirement is for control over the place of work itself, not over one element of it. [31] We also have difficulties with Mr Pike's alternative argument, that the boat was "plant" in the place of work, and that, because Diveco owned the boat, it came within para (b) of the definition of "person who controls a place of work". We do not think that mere ownership of any piece of equipment in a place of work makes the owner the controller of that place of work. The absurdity of that interpretation was well illustrated by Judge Walker in the Nelson Dive Centre case at [91] (quoted in para 11 above). Mr Pike argued that the boat in this case was the thing on or in relation to which the work was centred, so that ownership of the boat was sufficient to make Diveco the person who controlled the place of work (the boat, the seabed and the water in between). Mr Illingworth argued that control of plant on a work site would not be sufficient to make the controller of that plant liable or any hazards which arise in any part of the work site. He said that Parliament must have intended that a person can be made liable only for hazards arising in a part of a workplace over which he or she has actual control by virtue of his or her legal status in respect of the property and/or the plant situated on the property. In this case, while Diveco had control of the boat, it did not have control of the water or the seabed and the hazard to Mr Morgan arose in the water, not in the boat. [32] The matter is further complicated by the fact that the operations undertaken by Mr Morgan were at numerous different locations in the Rangitoto Channel rather than in one particular location. The hazard which arose in the present case (which was a characteristic of the "bounce diving" undertaken by Mr Morgan, which involved a number of dives in a number of locations with minimal breaks between dives) did not arise in any one particular place, but rather was a characteristic of the transitory nature of the work being undertaken in numerous different places. While Mr Pike's argument may have had some attraction if there had been ongoing diving operations taking place at a single location, we do not believe that, on the facts of the present case, Diveco can be said to have been in control of a place of work in which a hazard arose, merely because it controlled a piece of plant (the boat) which moved from place to place during the course of the day.[33] It follows that, although our reasoning differs from that of Heath J (which in turn follows from the fact that the case was argued on a different basis before us than it had been argued before him), we have reached the same conclusion as that reached by Heath J.Result[34] We dismiss the Department's appeal. Diveco is entitled to costs. In his judgment of 9 March 2004, Heath J said that it was a condition of the grant of leave to appeal to this Court that the Department pay the reasonable solicitor and own client costs incurred by Diveco in opposing the appeal in this Court. We therefore award costs to Diveco on that basis. The Department must also pay the reasonable disbursements of Diveco, which are to be fixed by agreement or, in default of agreement, by the Registrar.Solicitors: Crown Law Office, Wellington Haigh Lyon, Auckland for Respondent