New Zealand’s Court of Appeal has confirmed that trusts can be prosecuted in their own right under the Health and Safety at Work Act 2015 (HSWA), a development that is expected to influence how WorkSafe structures charge and how insurers assess statutory liability risks where businesses are held in trust. In RH and JY Trust v WorkSafe New Zealand [2026] NZCA 12, the court held by majority that a trust can be treated as a “person conducting a business or undertaking” (PCBU) and face prosecution and fines separately from its individual trustees.
Wotton Kearney’s (WK) statutory liability team said the ruling confirms that “a trust, distinct from the individual trustees, can be prosecuted under the Health and Safety at Work Act 2015,” and described the outcome as having “significant implications for the conduct of prosecutions under that act if it prevails.” Russell McVeagh similarly noted that the decision “means that a trust can be prosecuted and fined under HSWA despite the fact that trusts are not legal entities.”
The appeal arose from a fatal accident on a dairy farm in 2020, when a six‑year‑old child was caught in farm machinery. The farm was owned through a family trust, a structure widely used in New Zealand agriculture and small business. Following the incident, WorkSafe brought charges against several parties, including the trust as the alleged PCBU and the individual trustees. The sharemilker was prosecuted in a separate proceeding, pleaded guilty, and was sentenced in 2022. The trustees disputed the charges against the trust, on the basis that a trust is not a separate legal person and cannot itself be prosecuted. That issue has now been considered by the District Court, High Court, and Court of Appeal, with each level of court taking a different approach.
The District Court held in 2022 that a trust could not be charged as a person under HSWA. In 2023, the High Court accepted that the trust itself was not a person, but found that trustees acting together could be treated as a “body of persons” and charged in that collective capacity – a position that, in practical terms, was similar to prosecuting the trust. The Court of Appeal has now gone further. The majority concluded that, for HSWA purposes, the trust can be treated as the “person,” allowing WorkSafe to lay charges that expressly name the trust as the PCBU.
The majority focused on the HSWA definition of “person,” which includes “a body of persons, whether corporate or unincorporate.” The court regarded this language as broad enough to capture trustees acting together and the trust structure they administer. On that reasoning, WorkSafe may either name the trust or name the trustees “in their capacity as trustees acting collectively,” in which case they are not sued in their personal capacities. For the insurance sector, a key aspect of the judgment is the court’s treatment of HSWA’s prohibition on insuring or indemnifying fines. HSWA makes it an offence to provide insurance or an indemnity in respect of fines imposed under the act.
The majority viewed trustees as occupying an “officer‑like” role. On that basis, fines imposed on trustees personally cannot be met from trust assets, as that would amount to an indemnity of the kind the act is intended to prevent. However, where the trust itself is convicted as the PCBU, the majority considered that the trust may use trust property to pay the penalty. Wotton Kearney underlined this differentiation, noting that a trust facing sentence could use its assets to meet a penalty, whereas trustees in an officer‑type position cannot be indemnified from those same assets for HSWA fines imposed on them personally.
Justice Whata, in dissent, argued against reading HSWA as changing core trust law without clear wording. In his view, the law recognises trustees – and not the trust – as the parties who hold and manage trust assets. He stated that “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.’” On indemnity, Whata J took a different approach to the majority. Because “the trust is not a person” in orthodox terms, he considered that the statutory prohibition on one person indemnifying another for HSWA fines does not apply in the way the majority suggested. In his analysis, trustees paying fines from trust assets would be comparable to a sole trader meeting business liabilities out of business property, and he indicated that even if that view were incorrect, he would still allow a defendant “as trustee” to pay a fine from trust assets.
WorkSafe’s future approach will emerge over time, but the decision is already being interpreted as giving the regulator a clearer basis to pursue trusts where they hold operating assets. In RH and JY Trust, WorkSafe had already chosen to charge both the trust as PCBU and the trustees. Commentators suggest that, with the Court of Appeal now recognising the trust as a “person” for HSWA purposes, trusts may more often be named directly as defendants in prosecutions involving trust‑owned farms and businesses. Russell McVeagh has noted that the ruling “suggests that it is less likely that individual trustees will be prosecuted,” although trustees will continue to have section 44 due diligence obligations in an officer‑like capacity.
Wotton Kearney expects that, if the decision stands, more cases will involve the trust as a defendant, while WorkSafe keeps the option of prosecuting individual trustees where their own conduct is in issue. The firm has also highlighted that, where there is acceptance of collective responsibility, a conviction recorded in the trust’s name, and agreement that any fine is paid from trust property, there may be less internal dispute among trustees. In those circumstances, insurers could encounter fewer heavily contested trials over individual fault, with a potential impact on defence cost outlays in some matters.
For New Zealand insurers involved in statutory liability, management liability, rural, and trustee‑related business, RH and JY Trust raises a number of practical points:
Commentary from Wotton Kearney suggests that corporate trustees without a beneficial interest in the trust assets may, in some circumstances, be treated differently from company directors whose personal resources are considered when assessing a company’s ability to pay. That distinction may be relevant when insurers, brokers, and insureds discuss financial capacity and risk allocation. For brokers and underwriters, the case also prompts questions about proposal and renewal processes: whether current documentation adequately captures trust structures, who in practice makes health and safety decisions, and whether clients understand that HSWA fines cannot be transferred to insurers, even if trust assets are used to pay those fines.
Legal commentators have noted that the full impact of RH and JY Trust will depend on how WorkSafe and the courts apply the Court of Appeal’s reasoning, and on whether the case proceeds to the Supreme Court. The decision aligns with existing guidance that trusts operating businesses should “follow sound business practices in relation to health and safety,” ensure they “carry insurance that covers the cost of defending a prosecution,” and that trustees are clear about their HSWA duties, including due diligence. Whether the trustees will seek leave to appeal remains uncertain. In the meantime, the Court of Appeal’s recognition of trusts as “persons” under HSWA sets the framework within which regulators, insureds, and insurers will need to consider health and safety liability in trust‑owned operations.
