Ocean Fisheries Limited v Maritime New Zealand [2022] NZCA 164

In our September In Brief, we summarised the High Court decision which dismissed Ocean Fisheries’ appeal against the amount of reparation for emotional harm imposed by the District Court following the death of three crew members of the Jubilee in 2015.

The Court of Appeal has recently declined an application by Ocean Fisheries for leave to bring a second appeal. In doing so, it supported a number of the principles the High Court had laid down in its decision.

Background

In October 2015, three crew members drowned after the Jubilee sank. Ocean Fisheries pleaded guilty under the Health and Safety in Employment Act 1992 for failing to take reasonable steps to ensure the safety of the crew members.

Judge Couch imposed a fine of $46,000 and ordered reparation for emotional harm be paid of $505,000. His Honour calculated the emotional harm reparation on an individual basis, rather than on a per family basis, based on s 32 of the Sentencing Act 2002 which empowers the Court to impose reparation against an offender in relation to a “person who suffered emotional harm” rather than to a family group.

Ocean Fisheries appealed the decision, contending that the reparation was manifestly excessive. The High Court dismissed the appeal in August 2021. Ocean Fisheries sought leave to bring a second appeal against the reparation sentence on the basis that the proposed appeal involved a matter of general or public importance.

Court of Appeal Judgment

Awarding reparation on an individual basis is appropriate

Like the High Court, the Court of Appeal considered that Judge Couch did not err in awarding reparation on an individual basis rather than to the whole family. This approach was consistent with the Sentencing Act and case law. While the approach taken in fixing reparations may be of general or public importance, the Court said that such methodology would not necessarily affect sentencing outcomes in the future as it was largely reliant on the facts of the present case.

Moreover, the Court noted that sentencing courts always remained free to adopt a methodology appropriate to the case, including on a “per family” basis, subject always to it not being manifestly excessive. Courts may also reduce the level of any fine imposed to reflect the level of any reparation order and this was the approach taken in this case.

In this instance, Judge Couch was satisfied that the total penalty (fine and reparation) was proportionate to the circumstances of the offending and offender. Both the High Court and Court of Appeal were also satisfied that it was not manifestly excessive, such that the Court of Appeal did not consider granting leave to appeal was warranted.

Ocean Fisheries’ prior payments to victims’ families

Ocean Fisheries had made payment to the victims’ families prior to sentencing. The High Court held that these payments were made to compensate the families for financial loss, rather than to mitigate emotional harm. The fact that Judge Couch had reduced the fine to reflect these payments meant that the total penalty was not manifestly excessive even if the prior payments were not taken into account when fixing reparation.

Ocean Fisheries argued that the failure to take into account the prior payments would lead to significant consequences in the future, including that it would dissuade employers providing support to victims’ families for fear that this would not be taken into account later.

The Court considered this unlikely to happen as it considered such employers would likely be more motivated by concerns about their employees’ families’ wellbeing than about their own financial position. In any event, the Court did not consider this issue to be of any public or general importance as it flowed from the factual circumstances of the present case.

Relevance of insurance cover

The Court of Appeal followed the approach taken by the High Court in relation to insurance cover for the reparations. It said that the amount of reparation paid would generally be limited by the offender’s means and insurance simply provided one means for the offender to meet a reparation sentence. It had no further relevance beyond that.

Culpability not relevant to assessment of reparation amount

The Court noted the principle that reparation sentences were compensatory in nature, as opposed to fines which were punitive. It agreed with the High Court that the level of reparation should be fixed in recognition of the harm caused. Culpability may only be relevant in assessing reparation when there were multiple offenders, and responsibility for the reparation was to be apportioned between them. Therefore, it upheld the High Court’s finding that culpability was not relevant in assessing the level of reparation sentence.

Comment (Brad Alcorn)

This is a useful decision for insureds and insurers in that it clarifies the manner in which culpability will be considered when assessing reparation. It also makes it clear that if an insured wishes to make a payment to a victim or a victim’s family as a means to address any emotional harm they have suffered, then that intention must be clear. A payment for any other means, for example, to help meet some urgent financial needs will not also be considered as emotional harm support.

Nevertheless, the decision is less clear as to the appropriate identification of victims – should it be individuals, or can it be a group or groups? In short, it depends on the circumstances. The Court of Appeal agreed with the approach of the lower courts that reparation could be awarded on an individual basis. However, it also noted that awarding reparation on a group basis may be appropriate, subject to such an approach not being manifestly excessive. As such, this will become a question that turns on the circumstances of each case. Each approach should be scrutinised to make sure it does not result in an excessive award.

Resources

Second appeal against amount of reparation for emotional harm refused

Fee Langstone