The sentencing of Gloria Davis-Karetai in 2014 who owned and operated the Easy Rider fishing vessel with her husband has provided a warning to all husband and wife business owners that safety must be paramount when running a business.
The Easy Rider prosecution has been well documented in the media. The vessel was heading out on a fishing trip, but was also transporting a group of mutton-birders and their equipment to an island along their route. In the middle of the night the vessel was overwhelmed by a wave and sank with the loss of eight lives, including Mr Davis-Karetai and the only survivor enduring 18 hours in the water.
Technically a company owned and operated the vessel. In reality, the husband operated the vessel and the wife managed the paperwork. The company and Mrs Davis-Karetai were prosecuted under the Maritime Transport Act and also under the Health and Safety legislation. The crew were independent contractors and accordingly the defendants were prosecuted under section 18 of the Health and Safety Act with the allegation being that the wife, as director of the company, participated in the failure of the company to take all practical steps to ensure that no contractor or subcontractor was harmed while at the place of work.
The company and the wife were convicted on all charges. Significant fines were imposed at the sentencing. For the Maritime Transport Act conviction the company was fined $82,500 and with regard to the Health and Safety conviction, which technically only related to two contractors on the vessel, it was fined $122,000.
The Court, not unnaturally, struggled with what the appropriate penalty should be for Mrs Davis-Karetai, who had already suffered substantial personal and financial losses as a result of the incident. It was noted that the purpose of holding the wife accountable was to “bring home to others in other small fishing companies that with authority within a company comes duty, responsibility and obligations that cannot be honoured in their breach. They cannot delegate the responsibilities or ignore it”. The wife was less to blame for the shortcomings than her husband but the Court went on to say that “Although Mrs Davis-Karetai’s culpability does not have the same degree of deliberateness or avoidance as did the company, and in some areas Mrs Davis-Karetai did not have the requisite knowledge that her husband did, nevertheless she, as the responsible officer of the company, failed to a serious extent to carry out the responsibilities of her office. Her failures were in some areas deliberate; in others she had neglected to take reasonable steps. For that she is responsible and accountable.” After taking into account all the factors, particularly her limited financial means, the wife was sentenced to 350 hours community work with regard to the Maritime Transport Act and fined $3,000 with regard to the Health and Safety conviction.
The relatives of the deceased were adamant that they did not want any reparation from Mrs Davis-Karetai. The Judge said the relatives were examples of the true spirit of restorative justice. “Forgiving and merciful, not attempting to hold accountable individuals and not seeking to be financially improved by the outcome.” No reparation order was made.
This decision has sometimes been cited as an example of the extension of health and safety liability, but in many ways it is quite conventional given the wife’s role. Although it was arguably harsh to prosecute the wife, the result, certainly from a health and safety perspective, is not entirely surprising. Even the “paperwork” side of a management team needs to take responsibility for safety issues, particularly if they are a director of the company. That responsibility will only become more firmly entrenched under the new health and safety legislation.
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Disclaimer: The information contained in this publication is of a general nature and is not intended as legal advice. It is important that you seek legal advice that is specific to your circumstances.