Osborne & Rockhouse v Worksafe New Zealand

• Jurisdiction: New Zealand
• Judge: Kós P
• Judgment Date: 16 February 2017
• Neutral Citation: [2017] NZCA 11
• Docket Number: CA735/2015
• Court: Court of Appeal
• Date: 16 February 2017

BETWEEN

Anna Elizabeth Osborne and Sonya Lynne Rockhouse

Appellants

and

Worksafe New Zealand

First Respondent

District Court at Wellington

Second Respondent

[2017] NZCA 11

Court:

Kós P, Randerson and French JJ

CA735/2015

IN THE COURT OF APPEAL OF NEW ZEALAND

Appeal against a High Court “HC” decision which dismissed the appellants' judicial review application to review a decision of the respondent not to offer any prosecution evidence against Pike River Coal Ltd Chief Executive Peter Whittall “W” and the District Court decision to dismiss the charges against him — W faced 12 charges under the Health and Safety in Employment Act 1992 “HSEA” following a mine explosion which killed 29 people — W pleaded not guilty and undertook to make a voluntary payment of $3.41 million if the respondent offered no evidence against him — the appellants said the decisions were an unlawful bargain to stifle a prosecution in exchange for payment — whether the HC had failed to take into account the Solicitor-General's Prosecution Guidelines, failed to take into account relevant considerations (including that “money should not be paid to influence whether a prosecution should proceed” and s5(g) HSEA (object of the Act — promote the prevention of harm to all persons at work)) and took into account irrelevant considerations (including the conditional payment undertaking) — whether a prosecutorial decision may be reviewed for failure to take into account relevant considerations or the consideration of a material irrelevancy.

Counsel:

K N Hampton QC, and S N Meikle for Appellant

J C Holden and M J R Conway for First Respondent

No appearance for Second Respondent

• A The appeal is dismissed.

• B No order for costs.

JUDGMENT OF THE COURT

REASONS OF THE COURT

(Given by Kós P)

1 On Friday, 19 November 2010 there was an underground explosion at the Pike River coal mine. Thirty-one men were in the mine. All but two were killed.The appellants both lost a family member: Ms Osborne her husband Milton, and Ms Rockhouse her son Benjamin. Ms Rockhouse's other son Daniel was one of the two survivors.

2 Prosecutions under the Health and Safety in Employment Act 1992 were commenced by the Department of Labour. 1 VLI Drilling International Pty Ltd, 2 a contractor, pleaded guilty to the three charges. It was fined $46,800. Pike River Coal Ltd, 3 the mine owner, faced nine charges. It did not defend them. It was in receivership by then. It was fined $760,000 and ordered to pay $3.41 million in reparation to the families of the 29 men killed and to the two survivors. That is,$110,000 per victim.

3 PRCL's chief executive, Mr Peter Whittall, faced 12 charges. He pleaded not guilty. In about August 2013 Mr Whittall undertook to make a voluntary payment of $3.41 million in the event the prosecution offered no evidence against him. The same sum PRCL had been ordered to pay. Given PRCL's economic state, it was doubtful that payment would ever be made.

4 In December 2013 Worksafe decided that it would not offer any evidence in support of the charges against Mr Whittall. Judge Farish in the District Court then dismissed the charges against Mr Whittall. In due course the families received payments totalling $3.41 million from Mr Whittall.

5 Ms Osborne and Ms Rockhouse applied in September 2014 for judicial review of the prosecution decision not to offer evidence, and the District Court decision to dismiss the charges, against Mr Whittall. 4 They said the decisions were an unlawful bargain to stifle a prosecution in exchange for payment. It was not, however, suggested by the appellants that they would (or could) return the payments they had received.

6 Brown J dismissed their applications in November 2015. 5 Ms Osborne and Ms Rockhouse now appeal.

Facts

7 The facts are largely agreed and are set out fully in the judgment of Brown J. Shorn of inessentials, they are as follows.

8 Four catastrophic explosions occurred at the Pike River Mine. The first was at 3.45 pm on Friday 19 November 2010. 6 Both Department of Labour and police investigations commenced the following day. A Royal Commission into the tragedy was announced on 29 November 2010. 7

9 Almost a year later, on 10 November 2011, the Department commenced proceedings against VLI, PRCL (in receivership) and Mr Whittall.

10 On 31 July 2012 VLI pleaded guilty to three charges of failing to take all practical steps relating to the maintenance and operation of machinery. 8 Three VLI employees or contractors had died in the explosion. On 26 October 2012 VLI was fined $46,800. No reparation appears to have been offered. No reparation order was made.

11 PRCL did not defend the charges against it. A formal proof hearing was conducted on 14 and 15 March 2013. The receivers of PRCL did not participate. On 18 April 2013 Judge Farish entered convictions on nine charges of failing to take all practicable steps in relation to methane explosion management, ventilation management, panel geology and explosion mitigation management. 9 At sentencing on 5 July 2013 Judge Farish imposed fines of $760,000 and ordered reparation of $110,000 to each of the 29 men who had died and the two survivors (a total reparation sum of $3.41 million). The Judge noted that the company appeared to

have the means to pay the reparation ordered, but it remained to be seen if it would honour it

12 Twelve charges were brought against Mr Whittall under ss 6, 15 and 18 of the HSE Act. They were that he was party to the failures by PRCL and that he personally had failed to take all practicable steps to ensure PRCL's employees were not harmed. Mr Whittall pleaded not guilty to all charges.

13 Mr Whittall was covered by a directors' and officers' insurance policy. Economically, the insurer was indifferent to whether a dollar paid by it went to reparation or to defence of Mr Whittall. Over the ensuing five months, discussions took place between senior counsel for Mr Whittall, Mr Grieve QC, and the Crown Solicitor for Canterbury and Westland, Mr Stanaway. We will evaluate exactly what occurred — to the extent apparent on the evidence before us — later in this judgment. 10

14 A voluntary payment of $3.41 million on behalf of the directors and officers of PRCL — rather than PRCL itself — was proposed by Mr Grieve. The payment would be made if and after Worksafe advised the Court that no evidence would be offered in support of any of the charges. Mr Whittall would express his sympathy, personal empathy and condolences at a private meeting with families and survivors, and encourage PRCL's directors to attend also.

15 A panel of officials was formed by Worksafe, which had in the meantime assumed the functions of the Department of Labour. The panel included Crown counsel. There was uncertainty whether Mr Whittall's proposal should be considered. Mr Stanaway's review of the charges was received.

16 Mr Stewart, Worksafe's Chief Inspector, made the decision not to continue with the prosecution. His evidence was that while there was sufficient evidence to justify the prosecution, the likelihood of a successful prosecution was low. Reasons for that assessment included the following. At least 14 of the 92 Crown witnesses

were unavailable. Others were reluctant. Worksafe bore the burden of proof. Expert witness contests and lengthy pre-trial issues were likely

17 In addition “several reasons … indicated a trial was not in the public interest”. These included that if the prosecution succeeded, the sentence imposed on Mr Whittall as a secondary party was likely to be only a low fine. A reparation order was unlikely. PRCL on the other hand had been convicted with record fines and a substantial reparation order. The comprehensive Royal Commission report had been received by now. Additionally, a 16–20 week trial would be costly to Worksafe, financially and otherwise.

18 After those matters were assessed, and after legal advice had been received, consideration was given to the conditional payment undertaking by Mr Whittall. Also considered was the offer of the meeting with family and survivors. 11 All those matters taken together formed considerations in the final decision not to proceed further against Mr Whittall.

19 The Prosecution Decision was made by Mr Stewart on 5 December 2013, and approved by a deputy Chief Executive of the Ministry responsible for Worksafe.

20 The next pre-trial conference before Judge Farish had been set down for 12 December 2013. On 10 December the Court was informed of the Prosecution Decision, and on that and the succeeding day a teleconference and face-to-face meeting with families and survivors were conducted at which the decision was explained.

21 On 12 December 2013 the prosecution was called in open court in Christchurch before Judge Farish. The High Court judgment sets out at length the Judge's ruling delivered at that hearing. 12 We will address it further later in this judgment. 13 In the course of the ruling the Judge dismissed the charges against Mr Whittall and directed the Registrar to receive the payment of $3.41 million on the intended recipients' behalf.

Claim and defence

22 The appellants commenced judicial review proceedings in September 2014. Because discrete issues arise on this appeal we can summarise the claim and defence succinctly.

23 The appellants' claim was threefold:

• (a) that in making the Prosecution Decision, Worksafe departed unlawfully from the Solicitor-General's Prosecution Guidelines, 14 failed to take into account relevant considerations (including that “money should not be paid to influence whether a prosecution should proceed” and s 5(g) of the HSE Act) and took into account irrelevant considerations (including Mr Whittall's conditional payment undertaking);

• (b) that the appellants had a legitimate expectation that they be consulted on the proposal to offer no evidence against Mr Whittall...