Directors on notice: Court reinforces due diligence expectations under HSWA

The High Court has upheld the criminal conviction and sentencing of Anthony Gibson, the former chief executive of Ports of Auckland Limited, for breaching his due diligence duty as an officer under the Health and Safety at Work Act 2015 (HSWA).

This decision is significant. The District Court proceedings against Mr Gibson resulted in the first conviction of an officer of a large and complex organisation for failing to exercise appropriate ‘due diligence’ to ensure safety standards were observed.

The High Court’s dismissal of the appeal sends a clear warning to directors and senior managers: they can and will be held personally responsible, facing criminal conviction if they and their organisation do not observe the strict requirements of the HSWA.

The decision is particularly relevant in light of the Government’s forthcoming reform of officers’ duties. The proposed bill does not materially alter the due diligence obligations that led to Mr Gibson’s prosecution. The High Court’s confirmation of Mr Gibson’s conviction means that, unless there is much greater reform than currently planned, directors and officers remain exposed to significant personal risk.

Background

In November 2024, the District Court found Mr Gibson guilty of failing to exercise due diligence as an officer of Ports of Auckland in relation to the death of Pala’amo Kalati in August 2020. Ports of Auckland itself pleaded guilty to multiple HSWA breaches concerning the absence of adequate exclusion zones around operating cranes, poor supervision, and ineffective training and monitoring.

Mr Gibson was convicted in respect of two particular failures:

- Failing to take reasonable steps to ensure there were clearly documented and effectively implemented exclusion zones around operating cranes
- Failing to take reasonable steps to verify the provision and use of those resources and processes

In February 2025, he was fined $130,000 and ordered to pay $60,000 in costs.

Mr Gibson appealed the conviction and sentence to the High Court.

The appeal

On appeal, Mr Gibson argued, among other things, that the District Court:

- Wrongly treated him as effectively responsible for Ports of Auckland’s failures, rather than assessing his conduct independently as an officer
- Set the due diligence standard too high by referring to concepts such as “systems leadership” and best practice, which are not expressly found in section 44 of the HSWA
- Placed insufficient weight on the extensive health and safety systems and specialist personnel in place at the port
- Relied on Australian case law decided under earlier legislation that imposed a higher “all due diligence” standard and placed a reverse onus of proof on the defendant

Mr Gibson also argued that his sentence was “manifestly excessive”.

High Court decision

The High Court dismissed the appeal in full, upholding both the conviction and the sentence. Central to the Court’s decision were the following findings:

- Section 44 of the HSWA imposes an objective ‘reasonable officer’ test, assessed in light of the nature of the business and the officer’s role and influence. The duty requires officers to take reasonable steps to ensure the PCBU complies with its obligations, but does not require officers to personally manage day-to-day operations or guarantee safety outcomes
- Importantly, a breach by a PCBU does not automatically establish a breach by an officer. However, the Court confirmed that a PCBU’s proven failures may properly form part of the factual context when assessing whether an officer undertook reasonable due diligence. In practice, this meant that while Ports of Auckland’s admitted failures did not render Mr Gibson automatically guilty, the District Court was able to take into account those failures when assessing whether Mr Gibson had met his obligations
- While officers may rely on managers and specialist advisers, particularly in large organisations, such reliance must be reasonable. Where risks are known or information points to ongoing issues, officers will likely need to seek further assurance. The standard turns on the officer’s actual role and influence within the organisation, but does not vary depending on their personal level of engagement

On sentencing, the Court confirmed that a breach of due diligence obligations can properly be classified as “high culpability”, meaning a higher fine is appropriate, and upheld the District Court’s penalty of $190,000. The message is clear: where a serious health and safety breach occurs, officers face a realistic prospect of a significant personal fine.

Final thoughts

The High Court’s decision is a stark reminder that officers of large organisations face real personal liability under the HSWA. Comprehensive health and safety systems will not, of themselves, shield an officer who personally fails to meet the section 44 due diligence standard. The New Zealand Courts have now demonstrated that they are prepared to impose criminal convictions and substantial fines on individual officers.

For boards and senior management, the case underscores the importance of ensuring that critical risks are identified, that reporting and assurance mechanisms are genuinely effective, and that officers are able to demonstrate informed and active oversight – not merely the existence of systems on paper.

Officers should also be cautious about drawing comfort from the current regulatory environment. The Government’s reforms as they are currently framed will not change the risk. And while the regulator’s focus is now on offering guidance rather than enforcement, this should not be taken as an invitation to relax.

Political priorities shift, and the future Government may well favour more aggressive prosecution of breaches. Given the precedent which has now been established, directors and senior managers will then be squarely in the frame.