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District Court of New Zealand |
Last Updated: 20 October 2022
EDITORIAL NOTE: CHANGES MADE TO THIS JUDGMENT APPEAR IN [SQUARE BRACKETS].
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ORDER PROHIBITING PUBLICATION OF NAME, ADDRESS,
OCCUPATION OR IDENTIFYING PARTICULARS OF VICTIM PURSUANT
TO S 202 CRIMINAL PROCEDURE ACT 2011. REFER PARA [121] AND SEE
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IN THE DISTRICT COURT AT QUEENSTOWN
I TE KŌTI-Ā-ROHE KI TĀHUNA
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CRI-2019-059-000758
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CIVIL AVIATION AUTHORITY
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Prosecutor
v
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THE ALPINE GROUP LIMITED
Defendant
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Hearing:
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11 October 2022
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Appearances:
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S A H Bishop and N R Coffey Page for the Prosecutor G N Gallaway and J B
Lill for the Defendant
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Judgment:
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11 October 2022
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NOTES OF JUDGE R J WALKER ON SENTENCING
[1] The Alpine Group Limited (TAG) is charged with the following two charges under the Health and Safety at Work Act 2015 (the Act):
- (a) One charge pursuant to ss 48 and 36(1) of the Act of failing to comply with its duty to ensure, so far as reasonably practicable, that the health and safety of other persons was not put at risk from work carried out as
CIVIL AVIATION AUTHORITY v THE ALPINE GROUP LIMITED [2022] NZDC 20040 [11 October 2022]
part of the conduct of the business or undertaking, and that failure did expose any individual to a risk of serious injury or death;1 and
(b) One charge pursuant to ss 48 and 36(2) of the Act of failing to comply with its duty to ensure, so far as reasonably practicable, that the health and safety of workers who work for the Person Conducting a Business or Undertaking (PCBU) was not put at risk from work carried out as part of the conduct of the business or undertaking, and that failure did expose any individual to a risk of serious injury or death.2
[2] Both charges have a maximum penalty by way of fine of up to $1.5 million.
[3] TAG pleaded guilty to the charges and now appears before the Court today for sentence.
[4] TAG has not previously been convicted of a charge under the Act and has fully co-operated with the investigation.
Summary of facts
[5] TAG is a limited liability company that offers a range of helicopter services, including scenic flights, agricultural work, firefighting, government contract work, heli-adventures and heli-skiing. TAG holds a General Aviation Air Operator Certificate.
[6] TAG was leasing the helicopter, ZK-HOJ, from Heli Holding Limited on a short-term lease. ZK-HOJ was an MD 500D helicopter. The door latch system fitted to the aircraft was a multi-point standard latch tongue-and-strike plate system.
[7] At the time of the events relevant to sentencing today, Revision 27 of TAG’s Exposition (operations manual) was operative. The Exposition set out TAG’s internal procedure for reporting events and for the storage and securing of cargo.
1 CRN 190599500086.
2 CRN 19059500087.
[8] As part of TAG’s health and safety commitment, the Exposition provides that TAG will “[e]ncourage staff and contractors to report hazards, incidents and accidents in as practical and timely manner as possible”. Additionally, employees and contractors are “expected” to report all incidents and accidents that occur. There were procedures relating to reporting of hazards, incidents and accidents.
[9] On the morning of 18 October 2018, ZK-HOJ departed the Wanaka Aerodrome. A number of items were loaded into the aircraft, although their exact placement is unknown.
[10] Shortly after taking off, the left rear door of ZK-HOJ opened. The helicopter started to rotate and descend. It is not known what caused the door to open.
[11] During the crash sequence, one of the items that exited the cabin was a pair of thermal overalls. The overalls made contact with ZK-HOJ’s tail rotor. The tail section separated from the aircraft.
[12] The left-rear door was torn off its hinges as a consequence of the force the aircraft was subjected to. The left-rear door was then struck by a main rotor blade causing the window fixed to the door to shatter. The helicopter continued to descend quickly and struck the ground.
[13] No-one aboard the flight survived. The crash sequence could not be determined.
[14] The victims of this crash were a 38-year-old commercial pilot with extensive flying experience, who was the Alpine Helicopters’ chief executive officer and maintenance controller. He was flying the aircraft. The passengers were two men, aged 63 and 59 years of age, who were both employed by the Department of Conservation.
[15] Prior to the crash on 18 October, there had been three unreported door-opening events: on 3 October 2018; 12 October 2018; and 16 October 2018. The aircraft was safely landed on each of those occasions and nobody was hurt in each of these events.
[16] When one of the pilots was subsequently asked why he did not report the door-opening event, he stated that it was because it was a known issue and to report it would be “beating the same old drum.” and that if you brought it up at a meeting “they'd just roll their eyes”.3
[17] Notably, during the previous event on 3 October 2018, one of the passengers onboard the aircraft remembers being told to “put his arm over the top of the items to hold them” after the door unexpectedly opened mid-flight. The luggage was reportedly stacked on the rear left seat with the larger items on the bottom and the smaller items on top. There was no independent restraint device to secure them.
The law
[18] The Act provides for various duties owed in the workplace. The duties, and TAG’s failures to meet these duties, are agreed on by the parties. It is not alleged that the conduct and failings that TAG have pled guilty to was causative of the deaths.
[19] TAG is a PCBU pursuant to s 17 of the Act. TAG had a primary duty to ensure, so far as reasonably possible, the health and safety of workers who work for the PCBU while they are at work in the business or undertaking.4
[20] Additionally, TAG has a primary duty of care to ensure, so far as reasonably practicable, the health and safety of other persons to ensure that they were not put at risk from work carried out as part of the business or undertaking.5
[21] Section 36 establishes the core and overarching duty on all PCBUs and no other section of the Act overrides this.6
[22] The Civil Aviation Authority (CAA) and TAG agree that it was reasonably practicable for TAG to do the following:
3 Joint memorandum of Counsel.
4 The Health and Safety at Work Act 2015, section 36(1).
5 The Health and Safety at Work Act 2015, s 36(2).
6 Linfox Logistics (NZ) Ltd v Worksafe New Zealand [2018] NZHC 2909 at [64].
73.1 Internally report and objectively investigate the inflight door-opening events in ZK-HOJ of 3, 12 and 16 October 2018 and ensure a just reporting culture including;
- (a) promoting a culture, through conversation at both formal and informal forums, of the requirement to report inflight door-opening incidents.
73.2 Provide and maintain a safe system of work to ensure the adequate restraint of loose items in aircraft, namely by:
- (a) Ensuring leadership challenges, their own existing paradigms with respect to cargo restraint and establishing new norms within the business;
- (b) Providing and using a range of equipment for securing/restraining cargo, for example packs, and/or nets, that can engage with existing internal systems;
- (c) Training and educating pilots to a new standard of restraint;
- (d) Clearly defining what that standard is and capturing it in TAG’s Exposition;
- (e) Providing sketches and photographs of what could be achieved;
- (f) Ensuring that there were specific and periodic auditing against the agreed-upon standard of cargo restraint; and
- (g) Ensuring that passengers and other persons aboard aircraft understand the risks associated with loose items in an aircraft and ensuring those passengers and persons keep items secured.
Approach to sentencing
[23] The sentencing approach is not in dispute. In Stumpmaster v WorkSafe New Zealand, a 2018 decision of the full High Court, set out four steps:7
- (a) assess the amount of reparation;
- (b) fix the amount of the fine by reference first to the guideline bands and then having regard to personal aggravating and mitigating factors;
- (c) determine whether any further orders under ss 152 to 158 of the Act are required; and
- (d) make an overall assessment of the proportionality and appropriateness of the combined packet of sanctions, including considering whether
7 Stumpmaster v WorkSafe New Zealand [2018] NZHC 2020, [2018] 3 NZLR 881.
the fine should go up or down because of the defendant’s financial capacity.
[24] When determining how to sentence or otherwise deal with a person convicted under s 48, the Court is required to apply the Sentencing Act 2002. Section 151 offers specific guidance in that regard:
151 Sentencing criteria
(1) This section applies when a court is determining how to sentence or otherwise deal with an offender convicted of an offence under section 47, 48, or 49.
(2) The court must apply the Sentencing Act 2002 and must have particular regard to—
- (a) sections 7 to 10 of that Act; and
- (b) the purpose of this Act; and
(c) the risk of, and the potential for, illness, injury, or death that could have occurred; and
- (d) whether death, serious injury, or serious illness occurred or could reasonably have been expected to have occurred; and
- (e) the safety record of the person (including, without limitation, any warning, infringement notice, or improvement notice issued to the person or enforceable undertaking agreed to by the person) to the extent that it shows whether any aggravating factor is present; and
- (f) the degree of departure from prevailing standards in the person’s sector or industry as an aggravating factor; and
- (g) the person’s financial capacity or ability to pay any fine to the extent that it has the effect of increasing the amount of the fine.
[25] In Stumpmaster v WorkSafe New Zealand, however, it was held that those criteria are covered by the well-established culpability assessment factors identified in Department of Labour v Hanham and Philp Contractors Ltd, which should be considered at the second stage of the inquiry into sentencing:8
8 Department of Labour v Hanham and Philp Contractors Ltd [2008] NZHC 2076; (2008) 6 NZELR 79 (HC) at [54] cited in Stumpmaster, above n 7.
(a) The identification of operative acts or omissions at issue. This will usually involve the clear identification of the practicable steps which the Court finds it was reasonable for the offender to have taken in terms of s 22 of the Act.
(b) An assessment of the nature and seriousness of the risk of harm occurring, as well as the realised risk.
(c) The degree of departure from standards prevailing in the relevant industry.
(d) The obviousness of the hazard.
(e) The availability, cost and effectiveness of the means necessary to avoid the hazard.
(f) The current state of knowledge of the risks and of the nature and severity of harm which could result.
(g) The current state of knowledge of the means available to avoid the hazard or mitigate the risk of its occurrence.
[26] When dealing with a prosecution under s 48 of the Act there will always, at least, be a risk of serious harm or death. The Court in Stumpmaster v WorkSafe New Zealand stated that it is still important to have regard to exactly what the risk was, for example: how many people did it involve; how likely was it that a worker might have been killed? Also, the realised risk component of this inquiry (in other words, the actual harm caused), remains an important aspect in setting the placement within the bands.9
[27] While a defendant may sometimes be fortunate in the sense that no-one was hurt, it does not absolve liability under s 48. The actual harm caused is relevant to
9 Stumpmaster, above n 7, at [39].
determine how serious the offence was.10 Once that assessment of culpability is complete, in fixing a fine, the following guideline bands are to be used:11
low culpability: $0 to $250,000
medium culpability: $250,000 to $600,000
high culpability: $600,000 to $1,000,000 very high culpability: $1,000,000 to 1,500,000
[28] The Court predicted that under these bands a starting point of $500,000 -
$600,000 would be common.12 While such starting points may be onerous for a business, this is what the legislation intended.
[29] It is pertinent to highlight the following key purposes of the Act before engaging with the sentencing exercise:13
- (a) First, protecting workers and other persons against harm to their health, safety, and welfare by eliminating or minimising risks arising from work or from prescribed high-risk;
(e) Secondly, securing compliance with this Act through effective and appropriate compliance and enforcement measures; and
(g) Thirdly, providing a framework for continuous improvement and progressively higher standards of work health and safety.
[30] Against that background, sentencing under the Act will generally require significant weight to be placed on the purposes of denunciation, deterrence, and accountability.14
[31] It seems clear to me here that TAG already holds a sense of accountability given that they have co-operated with the investigation, reviewed and improved its
10 Health and Safety at Work Act 2015, s 151(2)(d).
11 Stumpmaster, above n 7, at [4].
12 At [66].
13 Health and Safety at Work Act 2015, s 3(1).
14 Stumpmaster above n 7, at [43].
procedures, later pled guilty to the charges, and have offered significant reparation to the victims’ families.
[32] The most relevant principles here are the gravity of the offending, the seriousness of the offence, the general desirability of consistency in sentencing, and the effect of the offending on the victims.
[33] The CAA submit that the Court ought to approach sentencing on the following basis:15
- 3.1 The starting point for the fine should be set at $600,000, with up to 20 per cent credit for TAG’s guilty pleas and no more than 15 per cent credit for previous good record and voluntary reparation. The CAA reserved its position to make oral submissions on any further matter raised in mitigation at the sentencing hearing itself.
- 3.2 Court ordered reparation is not available, as guilty pleas were entered on the basis that TAG’s failings did not cause the crash. CAA however notes that TAG has offered to make voluntary payments of amends of
$50,000 to each of the affected families. This payment is in addition to the sum of $200,000 paid voluntarily to each of the families shortly after the crash.
3.3 Costs have been agreed as set out in the joint memorandum of counsel on the file, dated 10 August 2022.
3.4 The suggested final overall penalty by way of fine, CAA submit, is
$390,000 (plus $64,766.94 in costs), being sufficient to meet the purposes and principles of sentencing.
[34] Among others, the CAA state that one of the purposes of sentencing ought to be providing for the interests of victims.16
Prosecution submissions
[35] The CAA submit that the relevant principles from s 8 of the Sentencing Act are: the gravity of the offending and culpability; the seriousness of the offences; and the effect of the offending on the victims.
15 Prosecution Sentencing Submissions.
16 Sentencing Act 2002, s 7(c).
Step one - reparation
[36] In dealing with step one, which is reparation, in respect of that step, determining the amount of reparation, the CAA accepts that sentencing is to occur on the basis that the failings were not causative of the crash. Accordingly, the threshold to pay emotional harm reparation is not triggered.17
Step two – quantum of fine
[37] In terms of step two, fixing the quantum of fine, the CAA submits that the standard Hessell v R sentencing methodology should apply.18
[38] I do note this is no longer the standard approach for sentencing after a recent decision of the Court of Appeal.19 The three-step methodology was replaced with a preferred method of:
- (a) calculating the adjusted starting point, including aggravating and mitigating factors pertinent to the offending; and
- (b) incorporating all aggravating and mitigating factors personal to the offender, with any guilty plea discount calculated as a percentage of the adjusted starting point.
[39] The CAA point out that the Court in Stumpmaster v WorkSafe New Zealand warned against excessive discounts for mitigating features, as these may distort starting points and undermine the sentencing principles.20
[40] Counsel for the CAA highlight a number of relevant culpability factors:
- (a) The relevant acts and omissions are, briefly, the failures to internally report and investigate door-opening events on three occasions prior to
17 Section 32.
18 R v Taueki [2005] NZCA 174; [2005] 3 NZLR 372 (CA); Hessell v R [2010] NZSC 135, [2011] 1 NZLR 607, (2010) 24
CRNZ 966.
19 Moses v R [2020] NZCA 296.
20 Stumpmaster, above n 7, at [67].
the crash and ensure a culture of reporting such incidents, which I will refer to as the reporting failure. Further, the failure to provide and maintain a safe system of work to ensure adequate restraint of loose items in an aircraft, which I will refer to as the restraint failure.
(b) The nature and seriousness of the risk of harm and the realised risk is present to a significant degree.
(c) The degree of departure from relevant industry standards, which carried with it a high risk to health and safety of workers and passengers, is present to a high degree.
(d) The obviousness of the risk of death or serious harm or state of knowledge is high. The CAA submits that the risk is readily appreciated and indeed was implicitly recognised by TAG by virtue of the inclusion of controls relating to the two failings in its Exposition. Therefore, this factor is present to a moderate degree.
(e) The CAA submit that there would be minimal cost or effort in implementing reasonably practicable steps to mitigate the risk of serious harm or death. The obviousness of the risk and ability to mitigate that risk, has been accepted by the Courts in previous cases and that this applies with equal force to the present case.21
[41] I appreciate the CAA’s diligent efforts in referring me to a number of comparator cases.22 The first five cases are submitted on the basis that actual harm was not realised whereas death did occur as a result of the failings in the final two.
21 Civil Aviation Authority v Scott [2019] NZDC 9458; Stumpmaster, above n 7, at [40].
22 Civil Aviation Authority v The Helicopter Line Ltd [2018] NZDC 3559; Civil Aviation Authority v Scott [2019] NZDC 9458; WorkSafe New Zealand v Dong Xing Group Ltd [2018] NZDC 22114; WorkSafe New Zealand v New Zealand Defence Force [2020] NZDC 21437; WorkSafe New Zealand v Dimac Contractors Limited [2017] NZDC 26648; WorkSafe New Zealand v Crafar Crouch Construction (Picton) Ltd [2019] NZDC 8209; WorkSafe New Zealand v Sunday Hive Company Ltd [2018] NZDC 20796.
[42] Notably, in WorkSafe New Zealand v Crafar Couch Construction (Picton) Ltd the Court assessed the offending as in the low range of high culpability and noted that while policies existed, they were not enforced or monitored and the risk created was not only significant, but it was also obvious.23
[43] The CAA submit that a starting point of at least $600,000 is appropriate in the present case. The starting point, based on the indication of the Court in the analogous case WorkSafe New Zealand v New Zealand Defence Force must be the bottom of the available range for this offending.24
[44] It is submitted by the CAA that the following aggravating and mitigating factors apply here:
- (a) First, TAG have not previously been convicted of a charge under the health and safety legislation. However, the three previous failures to report incidents mean the credit given for this should be minimal.
- (b) Secondly, TAG’s co-operation with the investigation should be treated as an absence of an aggravating feature rather than a mitigating one.
- (c) Thirdly, given the warning in Stumpmaster v WorkSafe New Zealand against giving a one-for-one credit for reparation payments as a mitigating feature, the overall discount (including prior safety record and reparation paid and offered) should not exceed 15 per cent.25
- (d) Fourthly, the resolution on an amended summary of facts was reached a week prior to trial. Balancing the guilty plea at a late stage against the amendments to the charges, and the agreement that causation could not be proven, no more than 20 per cent credit should be given for a guilty plea.
23 WorkSafe New Zealand v Crafar Couch Construction (Picton) Ltd [2019] NZDC 8209.
24 WorkSafe New Zealand v New Zealand Defence Force [2020] NZDC 21437.
25 Stumpmaster, above n 7, at [66].
[45] Therefore, the CAA submit that a final fine should be in the vicinity of
$390,000.
Step three – ancillary orders
[46] In terms of ancillary orders, the parties accept that the question of costs is ultimately a matter for the Court, pursuant to s 152 of the Act; however, the CAA submit that a contribution of $64,766.94 to the costs of the prosecution would be just and reasonable. That represents a 50 per cent contribution to the prosecutor’s external legal fees and expert report writers’ fees.
Step four – overall proportionality
[47] It is submitted by CAA that the end sentence should consist of a fine of around
$390,000 and costs I have referred to.
Defence submissions
[48] TAG, in submissions made on their behalf, begin by highlighting that it is not alleged that the failures identified in the charges caused the crash on 18 October 2018. The accident cannot and is not alleged to be linked to health and safety failings identified in the charges and accepted by TAG.
[49] Because of this, it is submitted that the CAA’s submissions incorrectly focuses on the failings through the lens of the accident. It is TAG’s position that the lack of causation is a critical factor in terms of how the Court should approach this case.
[50] It is submitted that TAG’s failures are confined to two narrow issues:
- (a) First, despite having a system for incident reporting, TAG failed to ensure that two pilots internally reported three inflight door-opening events; and
[51] TAG submit that it regrets those failures.
[52] The defence submit that this case must be seen in light of industry knowledge prior to the accident. Events in the Hughes 500 helicopter were not uncommon and not, on their own, viewed as a risk, and stowing baggage in the cargo/passenger compartment of a Hughes 500 involved careful loading to ensure items were secure for normal flight and ground conditions.
[53] The appropriate sentence, TAG submit, is:
- (a) A starting point of $350,000, adjusted after mitigating factors to bring about an end fine of $175,000. The offending, TAG submits, is medium culpability but at the lower end of that band.
- (b) It is agreed that legal costs of $67,766.94 are just and reasonable.
[54] At the time of the failures, TAG highlight that they were effectively transitioning to a safety management system (SMS) from a quality management system (QMS). While this takes time, and was not due certification until October 2020, TAG had already taken steps to transition and was well advanced in that process. This reflects well on TAG and demonstrates a proactive and responsible approach to safety.
[55] In terms of step two, setting a fine, it is submitted by TAG that the CAA’s starting point is too high having regard to the circumstances of the offending and comparable cases. The culpability factors highlighted by TAG are as follows:
- (a) Identifying relevant acts or omissions: TAG accepts that the inflight opening events should have been internally reported and that the documents did not go far enough to ensure that the standard of restraint was clear or consistently being followed.
[56] TAG submit that the Court’s analysis must not be influenced by the helicopter crash on 18 October, given that it is not alleged that the breaches were causative.
[57] This is a case, TAG submit, where the issues identified are minor breaches and not necessarily deviations from industry practice at the time. This is not a case where
26 Between January 2000 and October 2018 there were 85 door-opening events reported, from 19 October 2018 to 5 May 2021 there were 106 door events reported to the CAA.
27 Civil Aviation Authority v James Patrick Scott [2019] NZDC 9458.
there was an absence of required documentation or complete lack of process in place. Rather, perception of risk and ongoing refinement of policies was required to meet the onerous standards imposed by the Act.
[58] It is acknowledged that there was a risk from failing to internally report or continually improve the restraint practices or polices but the nature of that risk is not obvious.
[59] The defence challenges the relevance of the cases submitted by the prosecution and believe them to be of little use on the basis of proper comparison.
[60] TAG submit a number of comparable cases which they believe are more relevant. These are cases which involve risk but where no harm occurred, or where the failures are not alleged to have caused serious harm.28 It is submitted that these cases illustrate that the starting point submitted by the CAA is too high.
[61] It is submitted by TAG that there are two specific breaches. In respect of the failure to report, the risk that arises from this breach is not obvious. The second breach, TAG submits, involved one instance of non-compliance with TAG’s system and policies. The primary risk to passengers was as a result of inflight turbulence.
[62] TAG submit that the assessment of culpability in this case is particularly difficult because of the spectre of the accident on 18 October overshadowing any assessment, but that when the breaches are looked at for what they are, the failing of TAG must be seen as at the lower end of the medium culpability band.
[63] Accordingly, it is submitted on behalf of TAG that the starting point should be
$350,000 but that this starting point should be reduced, given a number of mitigating factors in favour of the company.
[64] It is submitted there are no aggravating factors and that is accepted by the CAA.
28 East by West Company Ltd v Maritime New Zealand [2020] NZHC 1912; Maritime New Zealand v C3 Limited [2020] NZDC 22995; WorkSafe New Zealand v Inflite Charter Limited [2022] NZDC 5627; WorkSafe New Zealand v Dreamswork Construction Limited [2020] NZDC 22967.
[65] TAG submit that the following are relevant mitigating factors:
- (a) First, TAG that has voluntarily paid amends of $250,000 to each of the affected families.
- (b) Secondly, it has fully co-operated with the investigations.
- (c) Thirdly, over a history beginning in 1954, it has no prior convictions and a good safety record.
- (d) Fourthly, TAG has an excellent reputation as an aviation company.29
- (e) Fifthly, TAG has taken a number of steps following the accident and investigation to improve health and safety.
[66] The defence highlight that the Court must take into account remedial action in relation to the circumstances of the offending.30 TAG engaged in prompt interaction with those affected by the crash and that a credit of 10 to 15 per cent discount is appropriate in those circumstances.
[67] TAG submit that the case law shows that their co-operation should warrant a discount.31 Their co-operation included participating in extensive inquiries, interviews, and extensive searches, sometimes at their own cost. It is submitted that the complexity of the case and investigation warrant that at least a five per cent discount should be given for TAG’s co-operation.
[68] Furthermore, that the safety record spanning back to 1954 warrants at least a five per cent discount. Finally, the remedial steps taken, and work done by TAG to ensure continuous improvement, also warrants a further discount.
29 TAG provided a number of letters of support.
30 Sentencing Act 2002, s 10(1)(e).
31 Stumpmaster, above n 7, at [100]; WorkSafe NZ v Dimac Contractors Limited [2017] NZDC 26648 at [57]; WorkSafe NZ v The Sunday Hive Company Limited [2018] NZDC 20796 at [39]; WorkSafe New Zealand v New Zealand Defence Force [2020] NZDC 21437 at [49].
[69] It is submitted that a full discount of 25 per cent is available for the guilty pleas and, taking into account the other discounts I have referred to, that a further 25 per cent is warranted. This would be a total discount of 50 per cent.
[70] It is submitted that adopting a starting point of $350,000 and applying the 50 per cent discount results in an end sentence of what should be $175,000.
The Court’s assessment
[71] Again, as I said earlier, the costs sought by the CAA are not in issue and seem just and reasonable.
[72] From the outset, I note that my analysis proceeds through the lens that the failures did not cause the accident, rather than through the lens of the accident itself.
Step one - reparation
[73] Both the CAA and TAG have highlighted the guiding principles of reparation, which I accept.32
[74] It has been agreed that the failings of TAG were not causative of the crash, therefore s 32 of the Sentencing Act is not triggered as there is no causative link between the offences and the damage or harm, and I am not in a position, therefore, to award emotional harm reparation.
[75] I do acknowledge that TAG has already paid $200,000 to each of the affected families and has offered to pay another $50,000. I make it clear that I endorse this further payment and accept that in this case there will be a voluntary payment of
$250,000 made to each of the affected families, totalling $750,000.
32 Sentencing Act 2002, ss 12(1) & 32(1).
Step two – quantum of fine
[76] As discussed, the appropriate methodology for determining the quantum of the fine comes from the case Moses v R.33
[77] In terms of culpability, Stumpmaster v WorkSafe New Zealand identified different factors that must be considered. There is no authority that any of these factors are more important than the others. When it comes to setting a fine, it is the role of the Judge to weigh up the different factors pertinent to the specific case and determine the appropriate fine. Ultimately, each case must be decided on its own circumstances because the factors will always be different.
[78] I acknowledge that this is not a case where there were no internal policies on health and safety but rather these were not complied with.
[79] The relevant acts and omissions are:
- (a) First, the failure to internally report and investigate door-opening events on three occasions prior to the crash and ensure a culture of reporting such incidents; and
- (b) Secondly, the failure to provide and maintain a safe system of work to ensure adequate restraint of loose items in an aircraft.
[80] The nature and seriousness of the risk of harm and the realised risk is in dispute between the parties. I do not accept that the nature and seriousness of the risk for not reporting the door-opening events is low. Moreover, a significant risk of harm arises when a workplace does not have a strong culture of reporting such incidents. This kind of culture can quite easily mean that significant and serious risks go unreported. While it may be that the aircraft can be operated with the doors removed, this does not mean that when those doors open unexpectedly that this does not need to be reported. This was not a doors-off operation and passing off of the doors opening mid-flight as some sort of quirk of this particular aircraft is, in my view, unacceptable.
33 Moses v R, above n 22.
[81] I agree with the CAA in that the two failures are closely linked. The restraint failure poses significant risk when considered with the reporting failures. This combination significantly increases the nature and seriousness of the risk. Effective safety management depends on incidents that create risk being reported, no matter how negligible pilots might think that risk is. As the Judge in WorkSafe New Zealand v Inflite Charters Ltd stated: “The riskier a situation, the more care that needs to be taken”.34 For these reasons, this factor is present to a high degree.
[82] The degree of departure from the industry standard is also disputed between the parties. The CAA submit that this is present to a high degree, while TAG submit that the issues in this case do not demonstrate a departure. Given the drastic change in the number of reported door-opening events, it is clear that there was, at the very least, an industry norm that these door-opening events were not reported. As TAG highlighted in its submissions, in the almost 19-year period between January 2000 and October 2018, there were 85 door-opening events reported, whereas in the two-and-a-half years from 19 October 2018 to 5 May 2021, there were 106 door-opening events reported to the CAA.
[83] Ms Bishop advised the Court this morning that according to those records, four of those occasions involved items being lost from the cabin, which is more than a minimal statistical possibility.
[84] However, industry norms and industry standards are not the same thing. I infer that there was a somewhat casual attitude from people in the industry to door-opening events but this does not mean that this was an industry standard. It is not enough to prove that nobody else was reporting these incidents or, put another way, as Ms Bishop submitted in her submissions earlier, the standard is not to be judged by what others were doing but what they should have been doing.
[85] Civil Aviation Rules require that luggage should be secured in such a way that it does not shift under normal flight and ground conditions. Given the claim by TAG that door-opening events are common in these types of aircraft, then it seems to
34 WorkSafe New Zealand v Inflite Charters Ltd [2022] NZDC 5627 at [22].
logically follow that luggage should have been adequately secured to contend with that eventuality. Therefore, this factor is present to a moderate degree.
[86] I now turn to the obviousness of the risk of death or serious harm. I accept the submission by TAG that the obviousness of death or serious injury from the failure to report the door-opening events was not, at the time, clear. However, the obviousness of death or serious injury as a result of the restraint failure in a Hughes 500 is much more readily appreciable.
[87] TAG state that the bulwark separates the passenger and cargo compartment mitigating the obviousness of a risk from unrestrained luggage. I do not accept that submission. There is an obvious risk of death or injury where luggage is unrestrained in an aircraft that has doors that unexpectedly open during flight. For this reason, this factor is present to a moderate degree.
[88] Finally, I turn to consider the knowledge and means available to avoid the risk of death or serious injury. The severity of harm which can result from incorrect operation of a helicopter is well known. The risk of harm from operating a helicopter is inherent. There were effective, inexpensive, and readily identifiable practicable steps that could have been taken by the defendant in this circumstance. These are clearly set out in TAG’s Exposition. What was lacking was that they were actually followed. That likely stemmed from the reporting culture. Training and educating staff and clearer guidance in the Exposition would not have been difficult to achieve.
[89] I consider that this case sits in the middle of the medium culpability band. I accept that this is not a case where there was an absence of required documentation or complete lack of process in place. However, I do not accept that this is simply a case where the perception of risk and ongoing refinement of policies were required. This is a situation where there was a culture of not following the Exposition and manuals that were developed to keep workers and the public safe. Policies cannot develop where adequate reporting is not occurring.
[90] I have considered all of the cases put before me and I have found the following to be of particular relevance.
[91] It is submitted by the defence that WorkSafe New Zealand v Inflite Charters Ltd and the present case are the most similar as they concerned events which had a low probability of occurring but which, if they occurred, could have serious consequences.35 Inflite was a company that promoted, sold, and provided trips to various New Zealand destinations, including Whakaari White Island. In 2019, the Island erupted, and 22 people lost their lives. Three groups of failures were identified, and they were charged under ss 36(2) and 48 of the Act. However, it was not alleged that there was any causative link between Inflite’s failures and the death of the individuals on the island. Inflite’s failure was that it was the face of the tours but delegated its responsibility to assess whether a tour was unsafe to others. The Judge adopted a starting point of $350,000 but stated that a fine of $400,000 would not be unfair.
[92] The breaches in the present case are more serious than in WorkSafe New Zealand v Inflite Charters Ltd. This is because there are two charges in the case before me: a breach of s 36(1) and 36(2). Therefore it must involve a higher starting point.
[93] The case of WorkSafe New Zealand v Alto Packaging also provides some guidance.36 In that case the victim worked in a plastic packaging factory. The victim was removing the raw product from one part of the machine and placing it into another part (the rollers). The victim was drawn into the machine and crushed to death.
[94] The need for guards around the rollers was obvious. There had been workers injured on three previous occasions. The authorities and the industry had an awareness of the risks and had procedures in place, whereas Alto Packaging did not. The sentencing judge therefore fixed a starting point of $800,000.
[95] The breaches in the case before me are less serious than in WorkSafe New Zealand v Alto Packaging. This is for two reasons: the first being that the failures were not causative of injury or death; and secondly, that there was an awareness and processes in place to mitigate risk, although these were not followed.
35 WorkSafe New Zealand v Inflite Charters Ltd [2022] NZDC 5627.
36 WorkSafe New Zealand v Alto Packaging [2022] NZDC 6148.
[96] In Civil Aviation Authority v The Helicopter Line Ltd, sentencing occurred on the agreement that the failings were not causative of the helicopter crash.37 The Helicopter Line had failed to formulate and implement an adequate weight and balance policy to ensure aircrafts were flown within weight and balance limitations.
[97] I accept the submission from CAA that TAG’s failings carried serious and obvious risk of death or harm. It involved a marked departure from industry standards, but not industry practice, and its own internal standards. These failures could have been easily remedied. This is similar to Civil Aviation Authority v The Helicopter Line Ltd. That case attracted a starting point, under the old sentencing bands, at the top of the middle culpability band.
[98] The present case is slightly less severe than Civil Aviation Authority v The Helicopter Line Ltd because TAG’s failures are less serious, and the risk of harm was not as obvious, nor was there a deviation from industry practice.
[99] In WorkSafe New Zealand v Mainland Poultry Ltd, the Court stated that the omissions that resulted in the incident were particularised as being the absence of an effective risk assessment to identify the latch as a hazard.38 The risk was of serious injuries in the form of amputation. The departure was discrete. The risk was known by workers but not reflected in processes. The Judge in that case adopted a starting point of $400,000.
[100] A similar analogy can be embarked on in the case before me. The risk of a door-opening event was known, and there were processes to manage the risk, but these processes were not followed because of a culture of non-reporting and failure to identify the door-opening event as a hazard. In TAG’s case, it was a failure to manage risk, rather than to identify it. The present case is more serious insofar as the actual harm that could result was much more serious and TAG had processes for known risks, but the processes were inadequate and not followed.
37 Civil Aviation Authority v The Helicopter Line Ltd [2018] NZDC 3559.
38 WorkSafe New Zealand v Mainland Poultry Ltd [2022] NZDC 9562.
[101] I find the case WorkSafe New Zealand v New Zealand Defence Force to be of particular relevance, notwithstanding TAG’s submission that it was not comparable.39 In this case the members of the Defence Force took part in a diver training course for being a Navy diver, and during the training, one of the divers was found unresponsive on the seabed and later died. It was found that there was a failure to provide effective supervision and ensure the divers had certificates of competence. However, it was not alleged that the failures were causative of the death. The defendant’s conduct deviated from prevailing standards, the risk was obvious and not costly to mitigate. Poor practices had crept in and there was evidence of lax behaviour.
[102] I do not accept that this case can be distinguished on the grounds that the risks inherent in the work and vulnerability of the trainees involved support a higher starting point than in the present case. In both instances there were inherent risks, which if ignored may lead to serious injury or death. While trainees are particularly vulnerable when considering the number of supervisors that should be present, this is comparable to the situation before me where inherently vulnerable people, who have no idea about the risk of inflight door-opening, are being taken on a Hughes 500.
[103] This is directly comparable to the case before me today. While there was adequate company policy around reporting and safe operation of helicopters, a complacent attitude around reporting and restraining had crept in.
[104] The CAA submit that the starting point should be set at $600,000 and in any case no less than $500,000. This is at the high end of medium culpability band. TAG have reached the conclusion that the starting point should be $350,000, being at the low end of medium culpability band. The difference is between $150,000 and
$250,000.
[105] In my assessment, the appropriate adjusted starting point for this case is $500,000.
[106] I now deal with aggravating and mitigating factors for the company.
39 WorkSafe New Zealand v New Zealand Defence Force, above n 22.
[107] First, I deal with the guilty plea. A discount for guilty plea is grounded in the fact that a defendant pleading guilty saves valuable court resources and limits the traumatisation for victims in coming to court. Determining the appropriate credit to be given requires an evaluation of all the circumstances in which the plea is entered.
Time is only one of those circumstances.40
[108] TAG entered a guilty plea a week before trial, by which point the trial had been set down and court resources allocated. However, I acknowledge that this must be balanced against the amendments to the charges and the agreement by the parties that causation could not be proved.
[109] In light of the circumstances, I consider a discount of 20 per cent is appropriate.
[110] The safety record of a defendant is a mandatory sentencing consideration.41 TAG have not previously been convicted of any charges under the health and safety legislation. I have read a number of letters in support of the company which speak to its excellent reputation in the aviation industry and the steps it is taken since this crash to increase safety in its aircraft. A discount of five per cent is therefore appropriate.
[111] I do not accept CAA’s submission that TAG’s co-operation with the investigation should be treated as an absence of an aggravating feature. I consider that TAG’s cooperation goes somewhat above and beyond, having taken it upon themselves to be an active participant in the investigation and sometimes doing so at their own expense. I do acknowledge that this was, to some extent, to their own benefit. A discount of five per cent is appropriate for this.
[112] The Court in Stumpmaster v WorkSafe New Zealand expressed concern about giving routine standard discounts for reparation payments, remorse, and making amends in the health and safety context, given the risk of distorting the sentencing process.42
40 Hessel v R [2010] NZSC 135 at [70].
41 The Health and Safety at Work Act 2015, 151(2)(e).
42 Stumpmaster, above n 7, at [64].
[113] I have some reservations about giving a large discount for TAG’s remedial action since the crash and, most importantly, their payment of reparation to the families. TAG have pleaded guilty to a lesser charge, meaning that they have already benefited from a discount to their sentence insofar as there is to be no causative link fixed between TAG’s failures and the crash.
[114] Further on that point, TAG have benefited in that the assessment of their culpability has been through the lens of their reporting and restraint failures and not the crash. However, I acknowledge that TAG have taken significant steps since the crash to remedy their failures, including engaging with the families of the victims of the crash. I consider that a seven per cent discount is appropriate for remorse and reparation.
[115] In my assessment, a 20 per cent discount for an early guilty plea and a further 17 per cent discount for mitigating features of the offender is appropriate.
[116] There are no aggravating factors present. In the circumstances this seems appropriate and does not distort the sentencing process.
[117] In summary:
- (a) I adopt a starting point of $500,000.
- (b) There is a discount of 37 per cent for mitigating features.
- (c) The end fine of $315,000.
Step three – ancillary orders
[118] The parties agree, in principle, that awarding a contribution to the costs of the prosecution of $64,766.94 is just and reasonable. This makes up 50 per cent of the legal costs and expert report costs. I consider that an award of costs in that sum seems just and reasonable in all the circumstances.43
43 Health and Safety at Work Act, s 152(1).
Step four – proportionality/overall assessment
[119] In terms of an overall assessment, there is no indication that TAG do not have the means to meet the fine and ancillary orders.
[120] I accept the submission by TAG that in addition to the fine, ancillary order and reparation already paid, a conviction will continue to cost the individuals involved in the business, perhaps significantly. However, I do not consider that this makes the sentence disproportionate. Much of the damage to the company’s reputation may have occurred in October 2018 when the initial accident occurred, and it is unlikely any more damage will flow from a conviction over and above what already exists. When stepping back and assessing the totality of the overall penalty, I consider it is just and reasonable, and therefore proportionate.
Sentence
[121] The final sentence is as follows:
- (a) First, for the reasons given earlier, while liability to pay reparation is not triggered, I do acknowledge that voluntary payments of $250,000 has been paid by TAG to each of the three families of the victims.
- (b) Secondly, there is a fine of $315,000.
- (c) Thirdly, costs are to be paid to the CAA by TAG of $64,766.94.
- (d) Fourthly, there will be name suppression for [name withheld] who is the writer of one of the victim impact statements.
[122] Finally, I wish to thank both the prosecutor and defence counsel for the quality of the submissions in this case and all of those family, friends and workmates of [the three deceased victims], who have attended court today. Thank you.
Addendum
[123] For clarity, at [24] above I have included the text of s 121 to which I referred.
Judge R J Walker
District Court Judge | Kaiwhakawā o te Kōti ā-Rohe
Date of authentication | Rā motuhēhēnga: 17/10/2022
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