Court Fines Landlord for Breach of Health and Safety

In a previous article (The Health & Safety at Work Act: The Aftermath) we commented on the increase in fines imposed by the Court, on businesses and directors, since the Health & Safety at Work Act 2015 (Act) came into effect.

In this article, we will discuss the obligations of the landlord, when it comes to health and safety, which was highlighted in the recent case Worksafe New Zealand v Discoveries Educare Limited, Heng Tong Investments Limited.

In this case, WorkSafe New Zealand (Worksafe) prosecuted the operator of the childcare centre Discoveries Educare Limited (Discoveries) and the landlord, Heng Tong Investments Limited (Heng Tong) for breaches under the Act.

Facts of the Case
A very brief summary of the facts are as follows:

  • Discoveries operated a childcare centre in Epsom which leased the property from Heng Tong;
  • A Site hazard assessment report completed in 2015 (and provided to both parties) noted that a programmed tree maintenance schedule was required and included photos of the tree appearing skeletal. Despite the recommendation, no maintenance schedule was introduced by Discoveries or Heng Tong; and
  • In November 2016 strong winds caused the tree to collapse and injure four children aged between 2 and four years old.

Evidence presented by Worksafe showed that the tree was dead, had been for more than a year and it would have been evident that the tree needed attention.

Decision of the Court
The Court ruled that:

  • the risk posed by a dead tree should have been obvious and both Discoveries and Heng Tong had failed to identify these risks; and
  • both Discoveries and Heng Tong had a duty of care to the children of the childcare centre which they failed to meet.

While the Court imposed sanctions against Discoveries for a total of $218,200.00, the Court also sentenced Heng Tong for failing to ensure, so far as was reasonably practicable, that the health and safety of other persons was not put at risk from work carried out as part of the conduct of the business (being property leasing and management of the property). Heng Tong was fined $89,200.00 and ordered to pay reparations of $27,800.00 as well as $2,326.00 in consequential loss for a total of $119,326.00.

It is important to note that a breach of the Act in this manner carries a maximum penalty of $1,500,000.00.

Message for landlords and employers:

Heng Tong in the above case submitted that it did not believe the health and safety issues were its concern as landlord and were solely the responsibility of Discoveries as the tenant. However, the Court disagreed stating that the landlord has obligations to ensure that controls are in place to mitigate risks. If the landlord does not have the expertise to identify these, then they should engage someone who does.

Regular inspections and assessments need to be undertaken. If these are not completed by the tenant then the landlord (or the property manager) must ensure it occurs. If hazards or potential hazards are identified, a plan as to how these are addressed is to be discussed with the tenant and who will be responsible to implement the plan. Most of the time this will fall to the tenant, however, a landlord who does nothing runs the risk of being prosecuted if an incident occurs.

Should you wish to discuss your obligations under the Act, please call us.