The court found Worksafe entered into an unlawful bargain in 2013 when it agreed to a deal in which insurers for Whittall would pay the Pike victims $3.41 million if the prosecution was dropped.
The 12 charges against Whittall accused him of acquiescing in or participating in breaches of the Health and Safety in Employment Act. He pleaded not guilty on all counts. A trial was to have been held in 2014 but, instead, negotiations starting in mid-2013 led to the payment of $3.41 million to the families of the 29 who died and the two workers who survived, on condition that WorkSafe offered no evidence to the court to support the prosecution.
The money was already owed to the victims after the prosecution of the defunct mine company Pike River Coal. Because the company had gone into in receivership shortly after the November 2010 disaster, it was unable to pay the $3.41 million in reparations ordered by the District Court.
Under the arrangement brokered between Whittall’s lawyer, Stuart Grieve, and then-Crown Prosecutor Brent Stanaway, the money was paid by insurers for the company’s officers and directors as part of the arrangement to allow Whittall to walk away.
“It is contrary to the public interest and unlawful for an arrangement to be made that a prosecution will not be brought or maintained on the condition that a sum of money is paid,” the Supreme Court judges wrote.
That principle was not in contention in the appeal. The question was whether Worksafe had “acted to give effect to an unlawful agreement of this nature” when it offered no evidence to support the charges against Whittall.
“An unlawful bargain not to prosecute arises where there is an understanding or promise, express or implied, that a public offence (as opposed to a civil wrong) will not be prosecuted on condition of the receipt of money or other valuable consideration. The policy of the law is that a defendant who commits what is a public wrong cannot, by settling the private injury, be ‘entirely freed from the punishment due to a violation of public law’.”
The judges noted that public prosecutors are “subject to legal obligations and duties”. Prosecutions by public officials are undertaken on behalf of the community, “in vindication of law and to protect rule-of-law values such as in equality of treatment”.
“The rule of law is undermined if accountability and punishment for public wrongs turns on the means of the defendant.”
The fact there was no impropriety on the part of WorkSafe’s senior prosecutor did not “answer the public interest in ensuring that decisions to prosecute are made lawfully and reasonably in the public interest to achieve public determination of responsibility for transgressions of law”.
Nor was it enough that there was an absence of “bad faith” on the part of the prosecutor.
It was also immaterial if an agreement to abandon the prosecution was part of the consideration for payment of an existing debt (that is, the $3.41 million already owed to the families by the broke company).
While payment of reparations do have a place in New Zealand law, such orders are not made before conviction or before a guilty plea is entered. A sentencing court is required to take into account efforts by offenders to “make amends”, but only after guilt has been admitted or found.
“There is no basis in the legislation for its application to a conditional offer to make amends, such as was put forward here.”
Nor is there anything in the Solicitor-General’s Prosecution Guidelines – which WorkSafe claimed to have closely followed - suggesting that an arrangement to pay reparations in exchange for withdrawal of prosecution is permissible, the court ruled. Instead, the guidelines emphasised that the “predominant consideration” in prosecution is the seriousness of the offence and the risk of harm it has created.
Defendants should “not be able to avoid prosecution simply because they pay compensation.”
The judges ruled there is “considerable public interest in prosecuting breaches of the law dealing with safety at work ... a bargain to stifle prosecution in this statutory context is as contrary to the public interest as the more familiar contexts of violations of the criminal law.”
In initiating discussions with Grieve, WorkSafe had hoped that Whittall would plead guilty to some or all of the charges, in return for a lesser penalty. However, Grieve responded by proposing “a voluntary payment of a realistic reparation payment, conditional upon the informant [WorkSafe] electing not to proceed with any of the charges against Mr Whittall”. Grieve described the dropping of charges as the “essential feature”.
In other words, the court observed, “the prosecutor was given the alternatives of taking the money or prosecuting. If accepted, this proposal would undoubtedly have constituted a bargain to stifle prosecution.”
Stanaway had acknowledged that the “central arrangement” was payment of “realistic” reparation “conditional” on the charges not proceeding. He had attempted to argue for a more “principled” outcome, whereby Whittall pleaded guilty to at least one charge. But that failed, and the deal proposed by Grieve remained on the table.
The court ruled that while other considerations may have weighed on the minds of those at WorkSafe who made the final decision not to proceed with the charges, “that does not detract from the bargain that was reached to end the prosecution on payment of the sum Pike River Coal had been ordered to pay by reparation”.
“The payment to be used for reparations was conditional on the withdrawal of the charges. This ‘central arrangement’ had been acknowledged by and known to WorkSafe and its advisors throughout … offering no evidence was understood to be the ‘essential feature’ on which the proposal to pay reparation was based.”
The High Court and Court of Appeal had both earlier rejected Rockhouse and Osborne’s bids for judicial review of WorkSafe’s decision. The Supreme Court judges say both of these courts appreciated that the payment was “conditional” on the charges not proceeding.
“We are unable to accept that they were correct however to shrink from the inevitable conclusion that such arrangement was an unlawful bargain to stifle a prosecution.”
Further, the decision notes that there was “no evident consideration” given by WorkSafe to the seriousness of the breaches of the health and safety legislation when deciding not to proceed with the charges.
Nor was there any reference made to WorkSafe’s earlier assessment, during the prosecution of Pike River Coal and accepted by District Court Judge Jane Farish in sentencing the bankrupt company, that the case concerned “the health and safety event of this generation” and that "a worse case is hard to imagine and is unlikely to ever eventuate”.
Nor did it seem to have been treated as relevant that the police had not pursued the option of a prosecution for criminal nuisance, because it would have cut across the public interest in the WorkSafe prosecution.
In an even more strongly worded addendum to the decision, Justice Ellen France said there was “no distance” between Grieve’s offer of payment and the decision by WorkSafe to offer no evidence. “It was always advanced as an essential, non-negotiable, condition of the discussion that Mr Whittall would not be charged.”
Today’s declaration from the court does not require WorkSafe to revisit the case. The two appellants and their lawyers pursued the case to the highest court entirely as a matter of principle, and in the belief – strongly endorsed by the court – that Whittall had bought his way out of legal accountability.
“We need to know, all of New Zealand needs to know, that justice will be done,” said Rockhouse.