OCEANA GOLD (NZ) LTD v WORKSAFE NZ & CROPP LOGGING LTD v WORKSAFE NZ [2019] NZHC 365

OCEANA GOLD (NZ) LTD v WORKSAFE NZ & CROPP LOGGING LTD v WORKSAFE NZ [2019] NZHC365 [7 March 2019]IN THE HIGH COURT OF NEW ZEALANDTAURANGA REGISTRYI TE KŌTI MATUA O AOTEAROATAURANGA MOANA ROHECRI-2018-463-000056[2019] NZHC 365BETWEEN OCEANA GOLD (NEW ZEALAND) LTDAppellantAND WORKSAFE NEW ZEALANDRespondentCRI-2018-463-000108BETWEEN CROPP LOGGING LIMITEDAppellantAND WORKSAFE NEW ZEALANDRespondentHearing: 7 February 2019 (Heard at Rotorua)Appearances: G Gallaway and J Lill for Oceana Gold (NZ) LimitedW Lawson for Cropp Logging LimitedA Longdill and L Moffitt for RespondentsJudgment: 7 March 2019JUDGMENT OF VENNING JThis judgment was delivered by me on 7 March 2019 at 11 am, pursuant to Rule 11.5 of the HighCourt Rules.Registrar/Deputy RegistrarDateSolicitors: Chapman Tripp, ChristchurchWorkSafe New Zealand, AucklandCounsel: A Longdill, AucklandIntroduction[1] In Stumpmaster v WorkSafe New Zealand a Full Court of this Court reviewedthe sentencing bands for offending under the Health and Safety at Work Act 2015 (theAct).1[2] The Court confirmed that the approach to sentencing under the Act requiredfour steps:2(a) assessing the amount of reparation;(b) fixing the amount of the fine by reference first to the guideline bandsand then having regard to aggravating and mitigating factors;(c) determining whether further orders under ss 152–158 of the Act wererequired; and(d) making an overall assessment of the proportionality andappropriateness of the combined packet of sanctions imposed by thepreceding three steps. They included consideration of the ability to pay,and also whether an increase was needed to reflect the financialcapacity of the defendant.[3] In Stumpmaster the guideline bands were the focus given the increased finesavailable. The issue of reparation was not directly addressed. The Court noted it didnot have detailed submissions on reparation but did observe that any increase in finelevels should not lower the size of reparation orders.3[4] In a previous decision of the Full Court, this Court discussed reparation asfollows:41 Stumpmaster v WorkSafe New Zealand [2018] NZHC 2020, [2018] 3 NZLR 881.2 At [3].3 At [55] – [56].4 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 (HC).Reparation[35] Sections 32 to 38 of the Sentencing Act deal with reparation. Forpresent purposes, s 32 is of greatest relevance. The sentence of reparation maybe imposed where:• The offender has, through or by means of an offence of which theoffender is convicted caused a person to suffer:(a) loss of or damage to property;(b) emotional harm; or(c) loss or damage consequential on any emotional or physicalharm or loss of, or damage to, property: s 32(1).• The person suffering the harm or loss must fall within thedefinition of "victim" in s 4(a): s 32(2).• The court must take into account any rights available to bringproceedings in relation to the consequential loss or damage andmust not order reparation in respect of consequential loss ordamage for which the court believes the person has entitlementsunder the Injury Prevention, Rehabilitation, and Compensation Act2001: s 32(3) – (5).• Any offer or agreement to make amends under s 10 is to be takeninto account in determining the amount of reparation: ss 32(6) and10(3).Financial capacity[36] In addition to s 14 of the Sentencing Act and s 51A(2)(b) of the[Health and Safety in Employment Act 1992], ss 35 and 40 [of the] SentencingAct relate to the financial capacity of the offender and are relevant to bothreparation and fines.[37] Where an offender has insufficient means to pay the total value of theloss, damage or harm, the court may sentence the offender to less than the fullvalue of the loss, damage or harm or order payments by instalments or both: s35. The primacy of reparation is emphasised by s 35(2) under which anypayments received from the offender must be applied first in satisfaction ofthe amount due for reparation.[38] Financial capacity is also relevant to the fixing of the amount of anyfine. Section 40(1) and (2) provide that the court must take into account thefinancial capacity of the offender which may have the effect of eitherincreasing or reducing the amount of the fine. Importantly, if a court imposesa fine in addition to a sentence of reparation, it must take into account in fixingthe amount of the fine the amount payable for reparation: s 40(4).[39] To assist the court in assessing the amount of any loss, damage orharm for the purposes of reparation, ss 33 and 34 enable the court to call forreparation reports. Similarly, the court may require a declaration of financialcapacity under ss 41 and 42.Overview of Overview of statutory framework[40] This review of the relevant provisions of the HSE Act and theSentencing Act demonstrates several key propositions. First, the object of theHSE Act is the prevention of harm in the workplace. Secondly, to achieve thatobject, sentencing under s 50 will generally require significant weight to begiven to the purposes of denunciation, deterrence and accountability for harmdone to the victim in terms of s 7 [of the] Sentencing Act. Thirdly, reparationmust be a principal focus in sentencing. Indeed, the Sentencing Act givesprimacy to reparation where the financial capacity of the offender isinsufficient to pay both reparation and a fine. Finally, both the HSE Act andthe Sentencing Act require the court to take account of the financial capacityof the offender.[5] It is convenient to review the approach to reparation in this judgment in lightof the changes made in the Act and the 2014 amendments to s 32(5) of the SentencingAct 2002. The issue of reparation arises in both of these appeals. It arises in thefollowing context.Oceana Gold (New Zealand) Limited[6] Tipiwai Stainton was employed by Oceana Gold (New Zealand) Limited(Oceana) at the Waihi Mine. On 28 July 2016 Mr Stainton lost his life in an accidentat the mine. WorkSafe New Zealand (WorkSafe) conducted an investigation into MrStainton's death, following which it charged Oceana under the Act with failing toensure, so far as was reasonably practicable, the health and safety of Mr Stainton,thereby exposing him to the risk of death.5 Oceana pleaded guilty.[7] On 8 May 2018 Judge T R Ingram delivered a reserved judgment on sentence.6The Judge fined Oceana $378,000 and ordered it to pay reparation for lost earnings of$350,000. In addition, the Judge ordered Oceana to pay costs of $3,672.Cropp Logging Limited[8] As the name might suggest Cropp Logging Limited (Cropp) is a loggingcompany. It is a small family run operation. Mr Sloan, one of its employees, wasbadly injured on 6 March 2007 when a log he was breaking out rolled on top of him.5 Health and Safety at Work Act 2015, ss 36(1)(a), and 48(1) and (2)(c).6 WorkSafe New Zealand v Oceana Gold (New Zealand) Ltd [2018] NZDC 5274.[9] WorkSafe conducted an investigation into the incident, following which itcharged Cropp under the Act with failing to ensure, as far as was reasonablypracticable, the health and safety of Mr Sloan, thereby exposing him to risk of death,and serious injury.7[10] Judge T R Ingram assessed Cropp's culpability as high and adopted a startingpoint of $750,000 for the fine.8[11] WorkSafe had sought a reparation order of $50,000. However, the DistrictCourt Judge ordered Cropp to pay reparation of $80,000. The Judge took into accountthe effects of inflation in fixing that figure. After taking account of mitigating factorsand Cropp's financial position, the Judge ultimately ordered Cropp to pay a fine of$100,000 together with costs of $10,000.Issues[12] The appeals raise the following issues concerning reparation:(a) whether an order for reparation under s 32 of the Sentencing Act 2002for loss consequential on physical harm is limited to those personssuffering the physical harm (the jurisdiction issue); and(b) if there is jurisdiction, how is the reparation for such loss to becalculated? What is the correct approach to fixing the quantum ofreparation? Is the victim's contribution to the accident to be taken intoaccount (the quantum issue)?The jurisdiction issue[13] The jurisdiction issue arises solely on the Oceana appeal. In fixing thereparation figure at $350,000 the Judge took into account the deceased's lifetimeearning capacity, which he considered was a loss suffered by Mr Stainton's family.7 Health and Safety at Work Act 2015, ss 36(1)(a) and 48(1)(c).8 WorkSafe New Zealand v Cropp Logging Ltd [2018] NZDC 20232.[14] Oceana submits that while victims other than the person suffering the physicalinjury are entitled to emotional harm reparation or losses consequential on thatemotional harm, they are not entitled to reparation for the loss of the deceased'searnings.[15] Mr Gallaway referred to s 38(1) of the Sentencing Act 2002:(1) Every sum payable under a sentence of reparation must be paid to theperson who suffered the harm, loss, or damage, or, with that person'sconsent, to that person's insurer.[16] He submits that loss of earnings is a category of loss that must be consequentialon physical harm and that reparation for such loss of earnings is restricted to the personwho suffered the physical harm. In the case of a fatality the person suffering physicalharm is no longer able to receive the benefit from an order of reparation.[17] Mr Gallaway also referred to the comments of Elias CJ in Davies v Police that:9The effect of s 32 is that those who suffer physical or emotional harm orproperty damage through an offence may receive reparations at sentencing ofthe offender in respect of both emotional harm and property damage, and anyloss consequential upon physical or emotional harm or damage to property.to support his submission that while Mr Stainton's family members were entitled toemotional harm reparation (and any consequential loss from that emotional harm) theywere not entitled to reparation for loss of earnings arising from the physical harm toMr Stainton.[18] Mr Gallaway submitted the reparation award was outside the Court'sjurisdiction and should be quashed.[19] It is important to put the comments made by the Supreme Court in the decisionof Davies v Police in context. The appellant had been convicted of operating a vehiclecarelessly and causing injury when towing a trailer with an insecure load. A mattresson the trailer had fallen off causing a collision in which a cyclist was injured. TheDistrict Court Judge had imposed an order for reparation totalling $20,500. Seven9 Davies v Police [2009] NZSC 47, [2009] 3 NZLR 189 at [9].thousand dollars was ordered in respect of emotional harm. After taking account ofthe uninsured damage to the bicycle, clothing and equipment and miscellaneousmedical expenses, $11,555 was calculated as reflecting the victim's loss of earningsclaim not covered by the Accident Compensation scheme (the statutory shortfall).Both the High Court and Court of Appeal had held the Judge had jurisdiction to makethe award. The issue before the Supreme Court was whether s 32(5) of the SentencingAct prevented the District Court Judge from ordering reparation for the shortfallbetween the victim's lost earnings and the payments made to her by the AccidentCompensation Corporation.[20] The relevant wording of s 32(5) at the time was:. . . the court must not order the making of reparation in respect of anyconsequential loss or damage . . . for which the court believes that a personhas entitlements under the Injury Prevention, Rehabilitation, andCompensation Act 2001.[21] The majority of the Supreme Court concluded that loss of earningsconsequential on physical harm was not able to be the subject of a reparation orderunder s 32(1).10 It is loss in respect of which the victim has entitlements within themeaning of s 32(5) and was accordingly excluded from the sentence by that provision.[22] Section 32(5) was amended on 6 December 2014 following the decision of theSupreme Court in Davies.[23] The 2014 amendment was, according to the Explanatory note to the Victims ofCrime Reform Bill 2011 (319-1) to "clarify" that a "court would be able to impose asentence of reparation for consequential loss or damage to meet any statutory shortfallin compensation. The effect of this amendment is to overturn the Supreme Courtdecision in Davies v New Zealand Police" Before the 2014 amendment andfollowing Davies, the focus on reparation had primarily been on emotional harm.[24] Section 32(5) as amended now reads:10 At [37].(5) the court must not order the making of reparation in respect of anyconsequential loss or damage for which compensation has been, oris to be, paid under the Accident Compensation Act 2001.[25] Section 32(5) as clarified by the amendment, confirms that the Court must notorder reparation in respect of any loss for which compensation has been or is to bepaid under the Accident Compensation Act 2001. The broad concept of "entitlements"has been replaced by reference to actual compensation payments, present or future.[26] The Court in Davies was not required to address the issue raised on this appeal,namely whether the sentencing Court has jurisdiction to make an order for reparationfor consequential loss of earnings in favour of immediate surviving family memberswho are victims where the principal victim has been killed.[27] The jurisdiction to make a reparation order is found in s 32(1) of the SentencingAct.(1) A court may impose a sentence of reparation if an offender has,through or by means of an offence of which the offender is convicted,caused a person to suffer—(a) loss of or damage to property; or(b) emotional harm; or(c) loss or damage consequential on any emotional or physicalharm or loss of, or damage to, property.[28] If the conditions in s 32(1) are met, the Court must impose a sentence or orderof reparation unless it is satisfied that the sentence or order would result in unduehardship for the offender or other special circumstances would make it inappropriate,or the reparation is excluded by the remaining provisions of s 32.11[29] As noted by the Full Court in Department of Labour v Hanham & PhilpContractors Ltd,12 the entitlement to reparation under s 32(1) is qualified in thesucceeding provisions of s 32. For example, s 32(2) provides the Court must notimpose a sentence of reparation in respect of emotional harm unless the person whosuffered the emotional harm is a victim as defined in s 4(a) of the Sentencing Act.11 Sentencing Act 2002, s 12(1).12 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 (HC) at [35].[30] In the present case s 32(1)(c) applies. Oceana has caused a person (MrStainton's partner and child) to suffer loss consequential on physical harm, the deathof Mr Stainton. The loss is the loss of Mr Stainton's lifetime earning capacity. Theuse of the word "any" suggests that harm on which the consequential loss is predicateddoes not need to be suffered by the same person claiming the consequential loss. Thereis nothing in the wording of s 32(1)(c) to suggest that the person who suffers loss needsto be the same person who suffered the physical harm.[31] While on a plain reading of s 32 the reference to person is general, the meaningin this context was clarified by the Supreme Court in Kapa v R.13 In Kapa the SupremeCourt considered the application of s 32(1) in the context of a victim's entitlement toreparation for financial loss. A valuable collection of medals had been stolen from theNational Army Museum. Two private donors approached the Commissioner of Policeand offered to fund a reward. The Commissioner announced a reward of up to$300,000. A lawyer contacted the Commissioner and made an arrangement underwhich the medals were returned in exchange for the reward. The police paid over$200,000 by way of reward. In due course Mr Kapa and another were arrested andcharged with theft of the medals. Both pleaded guilty. Mr Kapa and his associatewere the people who had received the reward. The other offender repaid the $100,000he had received but Mr Kapa did not. He was sentenced to imprisonment and orderedto make a reparation payment of $100,000 under s 32 of the Sentencing Act 2002.[32] The majority of the Supreme Court rejected the Crown's argument based onthe wording of s 32 that any "person" could potentially be the recipient of a sentenceof reparation under s 32(1)(a) or 32(1)(c). The Court held that only victims can be therecipients of a sentence of reparation. The Court considered the key to understandingthe purport of s 32 was its interrelationship with the definition of victim in s 4 of theSentencing Act.14 The definition of victim reads:victim—(a) means—(i) a person against whom an offence is committed by anotherperson; and13 Kapa v R [2012] NZSC 119, [2013] 3 NZLR 1.14 At [11].(ii) a person who, through, or by means of, an offence committedby another person, suffers physical injury, or loss of, ordamage to, property; and(iii) a parent or legal guardian of a child, or of a young person,who falls within subparagraph (i) or subparagraph (ii), unlessthat parent or guardian is charged with the commission of, orconvicted or found guilty of, or pleads guilty to, the offenceconcerned; and(iv) a member of the immediate family of a person who, as a resultof an offence committed by another person, dies or isincapable, unless that member is charged with thecommission of, or convicted or found guilty of, or pleadsguilty to, the offence concerned; and [33] Delivering the majority judgment, Chambers J noted that at first blush it mightnot be completely clear whether someone who suffers consequential loss or damagemust be a victim himself or herself. The Court answered its own question by statingit was satisfied, for two reasons, that only victims can recover for consequential lossor damage. Chambers J expressed the two reasons as follows:15[16] First, it would seem unlikely that recovery of consequential loss wasintended to be open-ended after reparation for loss of or damage to propertyand emotional harm had been carefully restricted to victims.[17] Secondly, the legislative history of s 32(1)(c) is consistent with aconclusion that consequential loss is recoverable only by victims. [34] At [18]–[27] Chambers J discussed the legislative history before concluding:[28] To recap at this point. We have established that s 32 is for the benefitof victims. Subsection (1)(a) allows reparation for direct loss of or damage toproperty. (We say "direct" as subs (1)(c) picks up a victim's consequentiallosses.) Subsection (1)(b) allows reparation for emotional harm.[35] In the present case Mr Stainton's partner and family qualify as victims under(a)(iv) of the definition as members of the immediate family of a person (Mr Stainton)who, as a result of an offence committed by another (Oceana), has died.[36] As victims, Mr Stainton's family members qualify for reparation for emotionalharm under s 32(1)(b) but that reparation is separate to and in addition to their15 Kapa v R, above n 13.entitlement to reparation for loss under s 32(1)(c). Loss under s 32(1)(c) includesconsequential financial loss.[37] But there is a restriction on the financial loss that can be recovered asreparation. Section 32(5) confirms that the Court must not make an order forreparation in respect of any consequential loss or damage described in subs (1)(c) forwhich compensation has been or is to be paid under the Accident Compensation Act2001. The practical result in the present case is that the reparation order for financialloss must take into account (and deduct) compensation payments to Mr Stainton'sfamily members under the Accident Compensation Act 2001 for the loss of MrStainton's income.[38] Nor is Mr Gallaway's argument supported by s 38(1) as he suggests. As MsLongdill submitted, the section refers to reparation being paid to the person whosuffered "the harm, loss or damage". While Mr Stainton suffered the harm, the lossfor which the reparation is to be made has been suffered by Mr Stainton's immediatefamily. It is they who will suffer an ongoing loss. Such loss is not restricted to theperson who suffered the harm. While the reference to harm could be a reference backto emotional damage or to emotional harm, the term loss or damage itself refers backto loss or damage to property or loss or damage consequential on physical harm unders 32(1)(c).[39] In summary to this point, for the above reasons I conclude there is jurisdictionunder s 32 of the Sentencing Act for the sentencing Court to make an order forreparation in favour of victims for loss consequential on the physical harm to another.Such a conclusion is supported by the general purposes of the Sentencing Act. Section3(d) of the Act confirms that one of the purposes is to "provide for the interests ofvictims of crime".The quantum issue[40] The second issue raised in the appeal is the more difficult one. How is thereparation for loss of earnings reparation to be calculated? Is it to be on a basisconsistent with the principles of the Accident Compensation legislation and the socialcontract upon which that legislation is based, or is it to operate as a true exception tothe Accident Compensation legislation and the social contract?[41] On the first approach an order for reparation for financial loss, consequent onphysical harm, would be constrained by the pecuniary benefit that the victim wouldhave received (calculated by reference to net income in the period prior to theincapacitating incident), and limited to the shortfall between that amount and thevictim's entitlement to compensation payments under the Accident Compensation Actfor the period which they are entitled to such payments (the "statutory shortfallapproach").[42] On the second approach an order for reparation would entitle a victim to theprospective future value of the financial loss they have suffered (calculated byreference to anticipated life-time earnings on the basis of actuarial reports), for aperiod of time unconstrained by any time limit for which compensation may bepayable under the Accident Compensation legislation (the "open-ended approach").[43] Under the "open-ended approach" the Accident Compensation Act is onlyrelevant to the extent that compensation payments under the Act are deducted fromthe quantum of the reparation payable.[44] The Judge in the present cases did not directly address this issue but proceededon the basis of the open-ended approach. Nor was the issue referred to in the cases ofWorkSafe New Zealand v Transport Waimate Ltd and WorkSafe New Zealand v GordonDevelopments Ltd.16 While the issue was referred to in WorkSafe New Zealand vCorboy Earthmovers Ltd, WorkSafe New Zealand v Hamilton City Council andWorkSafe New Zealand v South Port New Zealand Ltd it was resolved on a pragmaticbasis.17 It was discussed in more detail in the decision of Judge C J McGuire in16 WorkSafe New Zealand v Transport Waimate Ltd [2016] NZDC 9468; WorkSafe New Zealand vGordon Developments Ltd [2016] NZDC 5535.17 WorkSafe New Zealand v Corboy Earthmovers Ltd [2016] NZDC 21982; WorkSafe New Zealandv Hamilton City Council [2016] NZDC 18590; and WorkSafe New Zealand v South Port NewZealand Ltd [2017] NZDC 8050;WorkSafe New Zealand v Wai Shing Limited and identified in a minute of Judge Neavein WorkSafe NZ v Peter Fletcher Transport Limited.18[45] There are a number of general statements of principle in the Davies' case as tothe extent of reparation for lost earnings which suggest it is appropriate for restraint inthis area and which support a conclusion that reparation should be determined on thestatutory shortfall approach with regard to the general principles underlying theaccident compensation scheme and to the detailed provisions for payments in eachparticular case.[46] The following passages from the Davies' decision are instructive. By referenceto ss 32(3), (4) and 38(2) of the Sentencing Act Elias CJ emphasised the summarynature of an order for compensation in the criminal sentencing context and notedthat:19[10] the court "must" take into account other such remedies availableto the victim. Where there is substantial dispute as to causation or as tomeasure of loss, the court may take the view that compensation is notappropriately dealt with through the summary criminal procedure for orderingreparation. These provisions recognise that not all losses suffered byvictims will be suitable for a sentence of reparation. And even where asentence of reparation is suitable, it may not be appropriate to awardreparation which amounts to full compensation for loss. The sentence ofreparation therefore provides summary remedy for victims of crime, withoutlimiting their ability to seek compensation outside the criminal justice process.[11] Reparation may not amount to full compensation and may not alwaysbe appropriate. But it enables speedy and inexpensive relief, additional toother remedies. [47] There are also a number of relevant provisions in the Accident CompensationAct itself which support a restrained approach to the ambit of reparation. For example,s 3 refers to the social contract represented by the first accident compensation schemeand confirms the purpose of the Act to provide for a "fair and sustainable" scheme.18 WorkSafe New Zealand v Wai Shing Limited [2017] NZDC 10333; and Minute of Judge Neave,WorkSafe NZ v Peter Fletcher Transport Limited, Christchurch DC CRI-2018-009-1333, 19September 2018.19 Davies v Police, above n 9.[48] Importantly a central plank in the social contract implemented through thelegislation is compensation for loss which is fair rather than full.20 In the context ofthe Health and Safety at Work legislation Elias CJ noted:[25] In the case of losses compensated under the Injury Prevention,Rehabilitation, and Compensation Act, such remedies have been replaced byan exclusive statutory regime, as is discussed further below. Reinstating themin a partial way through the criminal justice system would be inconsistent withthat regime. Section 32(5) prevents such inconsistency.[49] Section 317 of the Accident Compensation Act prevents proceedings fordamages arising directly or indirectly out of personal injury covered by the Act, exceptfor property damage. While s 317 does not apply to a sentence of reparation since thesentence of reparation is not a proceeding for damages, s 317 is a pivotal provision inthe social contract implemented through the Accident Compensation legislation.21Again, as Elias CJ said:[28] If reparation can be ordered under the Sentencing Act to make up forperceived inadequacies in entitlement under the Injury Prevention,Rehabilitation, and Compensation Act, victims of crime stand outside thegeneral prohibition. If "entitlements" for the purposes of reparation eligibilitydepend on what is actually paid, ineligibility under the Injury Prevention,Rehabilitation, and Compensation Act would revive the ability to obtainredress through reparation for victims of crime, but not victims of civilwrongs. It is not at all clear why "top-up" claims for victims should beavailable in sentencing proceedings but not in civil suit. [50] Tipping J put it rather more strongly:[48] There would be no logic, and indeed substantial illogic, in prohibitingcivil proceedings seeking compensation for personal injury yet allowing thesame result to occur through criminal proceedings. It would go against thewhole philosophy and purpose of the accident compensation scheme to allowthose suffering injury as a result of an offence to have the potential to gaingreater compensation than those suffering the same injury when no offence isinvolved or no one is prosecuted. I am not persuaded that Parliament meant todo this.[51] In Davies it was noted that compensatory payments under the formerlegislation (prior to the Sentencing Act) had also been effectively capped in that theywere limited to the fine imposed.2220 At [18].21 At [27].22 At [31].[52] The 2014 Amendments were clearly intended to overturn the decision inDavies and to allow for reparation payments consequential on physical harm to beordered for the benefit of victims to address the statutory shortfall so that any shortfallbetween Accident Compensation entitlements and actual loss could be recovered forthe period the compensation payments were made. The explanatory note to the Billmakes that much clear. While such reparation payments will top-up the entitlementsunder the Accident Compensation legislation, the legislation provides a useful contextagainst which the calculation of quantum for such reparation payments can be based,and can still be consistent with the purpose of the social contract underpinning theaccident compensation scheme, by providing compensation which is fair rather thanfull.[53] The Deaths by Accident Compensation Act 1952 (the DAC Act) is a relevantconsideration also. That Act permitted claims for damages in this context, but notwhere there was an entitlement under the Accident Compensation Act.[54] The DAC Act was a response to the common law rule that a person whosuffered financial loss on the death of another as the result of a tort had no claimagainst the tortfeasor. Section 4(1) of the DAC Act provides that where the death of aperson is caused by a wrongful act, neglect or default, which would, if death had notoccurred, have entitled the party to bring an action and recover damages, the personwho would have been liable to the deceased is liable to an action in damages.However, if the death is covered by accident compensation the defendant is not liable.As personal injury under the Accident Compensation Act covers death, the death iscovered so there can be no claim under the DAC Act.[55] There are further practical considerations which support the statutory shortfallapproach rather than the open-ended approach. The Supreme Court in Daviescautioned against the practical problem of assessing what might be payable at asentencing hearing on a summary basis.23[56] Even where the Court has approached the assessment of reparation on an open-ended basis with the assistance of an actuarial report, the Court will often still take a23 At [34]–[36].broad-brush assessment of the appropriate amount to ensure it avoids over-compensating. For example, in the Oceana case the Judge halved the lowest sumsuggested as the relevant loss by the report.[57] The need for such detailed actuarial reports is a further complication in thecontext of a sentencing hearing. While ss 33 and 34 of the Sentencing Act provide forreparation reports, from their terms I do not consider that full detailed actuarial reportsas to future losses were contemplated by the legislature.[58] There is also the complicating issue of contribution. In the Cropp appeal MrLawson sought to argue that the reparation for loss of earnings should be reduced totake account of Mr Sloan's contributory negligence and his failure to observe certainexisting standards in the logging industry which, he submitted, contributedsignificantly to the accident which caused Mr Sloan's injuries. The practical difficultyof such an argument is obvious. A sentencing hearing is not an appropriate forum fordetermining what standard practices might apply to an industry, how the injury mayhave occurred and what contribution a victim may have contributed to it. It was inpart to avoid such issues (arbitrariness of damages and the difficulty of assessingcompensation and contribution in civil cases) that the accident compensation schemewas established.[59] The issue of contribution in this context was considered in Department ofLabour v Eziform Roofing Products Ltd.24 The High Court considered s 9(2)(c) of theSentencing Act (which required the conduct of the victim to be considered as amitigating factor in sentencing an offender) in the context of a sentence under Healthand Safety legislation.[60] In the earlier decision of Hanham the Full Court had declined to use thevictim's careless conduct as a mitigating factor of offending stating:25[156] We regard Hanham & Philp's culpability in this instance as in thehigh category but towards the lower end of that band. The conclusion cannotbe escaped that the construction of the temporary scaffold was obviouslyinadequate. The reaction of the company's management on that issue speaks24 Department of Labour v Eziform Roofing Products Ltd [2013] NZHC 1526.25 Department of Labour v Hanham & Philp Contractors Ltd (2008) 6 NZELR 79 (HC).volumes. The company is obliged to accept responsibility for the failures ofits employees which were inexplicable given their level of experience.[61] In Eziform Duffy J referred to the passage from Hanham and went on toconclude that:26[52] But guarding against workplace accidents that result from thefoolish carelessness of employees is part of the role of the Health and Safetyin Employment Act. So, to allow such carelessness to minimise an employer'sculpability would undercut one of the policy objectives of the legislation. Particularly in light of the accident compensation scheme's no fault principle,the fines imposed under this Act must act as a real deterrent on employers toavoid workplace accidents, including those involving the foolishness andcarelessness of employees. It would be wrong, therefore, to permitemployers to rely on an injured employee's foolishness or carelessness tomitigate the employer's culpability. It follows that in matters of workplacehealth and safety, to attach little, if any, weight to a victim's carelessness willnot be inconsistent with the requirement in s 9(2)(c) of the Sentencing Act.Indeed, to do otherwise would subvert the policy of the Health and Safety inEmployment Act.[62] There is force in the above observations, which, while made in the context ofassessment of a fine, apply equally in the case of reparation, quite apart from thepractical difficulties that I have identified above. It is also consistent with theobservations of Davison J in Linfox Logistics (NZ) Ltd v WorkSafe New Zealand:27[52] The title to s 36 describes the duty as the "primary duty of care".Contrary to Mr Nicholson's submission, the adjective "primary" in this contextmeans first in terms of being of fundamental application and importance,rather than the numerical first in a sequence. Section 36 itself is expressed inbroad terms, and in light of the Act's overarching purpose being to secure thehealth and safety of workers and workplaces, it is properly viewed as settingout the Act's foundational duty. [63] I accept there is force in Ms Longdill's submission that to seek to reduce thereparation payable on the basis of contributory conduct would undermine thatfoundational duty on an employer.[64] In R v Donaldson the Court of Appeal made the point that reparation is to be:28approached in a broad common-sense way, and resort to refined causationarguments is not to be encouraged.26 Department of Labour v Eziform Roofing Products Ltd, above n 24.27 Linfox Logistics (NZ) Ltd v WorkSafe New Zealand [2018] NZHC 2909 (footnote omitted).28 R v Donaldson CA227/06 20 October 2006 at [36].[65] In a New Zealand Journal article, Simon Connell suggests that the socialcontract is a kind of origin myth which is illusory and the Supreme Court in Davieserred by taking it too seriously. As noted above however, the Accident Compensationlegislation expressly talks of a social contract and there is unarguably value in the rightto sue for personal injury which has been replaced as part of the social contract.[66] Finally, if Parliament had intended that reparation for financial loss under theSentencing Act was to sit outside the social contract under which the AccidentCompensation Act applies and for compensation in this one area to be open-ended onewould expect a very clear message to that effect. The focus of the amendment tos 32(5) was very much on addressing the effect of the Davies' decision which heldthere could be no top-up of the statutory shortfall by way of reparation. I do not readit as any more extensive than that.[67] I note that WorkSafe accepts there is merit in principle in ensuring a consistentand relatively simple approach to calculating shortfall without the need to resort toactuarial analysis in each case.[68] For those reasons I conclude that in the case of loss of earnings the order forreparation (which in a number of cases will be in addition to reparation for emotionalharm) should be restricted to the statutory shortfall in compensation under thecompensation legislation. That shortfall is to be calculated as the difference betweenthe pecuniary benefit the victim would have received and the compensation payableto them under the accident compensation scheme, in accordance with the entitlementsset out in Schedule 1 of the Accident Compensation Act limited to the period that thepayments are made under that scheme.29 That will enable the shortfall to be made ona basis that ensures a degree of consistency with the social contract confirmed by theAccident Compensation legislation. It should also provide a more straightforwardbasis for the calculation of reparation and, hopefully, a degree of certainty tosentencing Judges and the parties. It will also avoid the need for complicated andpotentially contestable actuarial reports for sentencing hearings and avoid argumentsconcerning contribution.29 See Schedule 1 to the Accident Compensation Act 2001.[69] Ultimately as the Full Court observed in Stumpmaster, the final step in thesentencing process will be to make an overall assessment of the proportionality andappropriateness of the combined packet of sanctions,30 but bearing in mind theprimacy of reparation as noted in Department of Labour v Hanham & PhilpContractors Ltd.31The appeals[70] I turn to consider the individual appeals in more detail.Oceana Gold Limited[71] Mr Stainton had been employed at the Waihi Mine since November 2007. On1 July 2016, his employment was transferred to Oceana when it took over the operationof the Mine. Mr Stainton was a fully qualified bogger operator and was working assuch on the day of the incident. A bogger is a load haulage vehicle.[72] On 28 July 2016, Mr Stainton had been tasked with using the bogger to builda bund prior to backfilling a void created by the mining operation.[73] In the process of mining, large voids (stopes) are created which requirebackfilling to comply with the mining operations' consent conditions. The stopes arefilled with compacted waste rock. Before the stope is backfilled a bund is built no lessthan two metres from the edge to make the backfilling operation safer. Oncecompleted the bund acts as a wheel stop which prevents the bogger driving over theedge.[74] Until the bund is built, the area is secured by gates and chain barricades. Onlyafter complying with a number of procedures and checks is the bogger operatorsupposed to pass the gates and chain barricade with a bucket of waste to begin buildingthe bund wall.30 Stumpmaster v WorkSafe New Zealand, above n 1, at [3](d).31 Department of Labour v Hanham & Philp Contractors Ltd, above n 12.[75] The procedure requires the bogger operator to first walk around the area toestablish that a painted line is present and clearly defined on the ground two metresfrom the edge. If necessary, the mark is repainted. The bogger operator then uses themark to ensure the bogger remains a safe distance back from the edge of the stopewhilst the bund is created.[76] As Mr Stainton had been assigned to the task of bund building he wasauthorised to work past the gate and chains. To enable him to create the bund the gatehad to be open and the chain removed to provide a clear path. As a result, there wasno physical barrier between the bogger and the vertical edge prior to construction ofthe bund.[77] The procedure is that the bogger operator approaches the edge in first gear withthe bucket raised, stops when the bucket is still two metres from the edge level withthe painted two metre line (which places the front wheels about four to five metresfrom the edge), then, after placing the machine into reverse, lowers the bucket to dumpits load.[78] Mr Stainton was last spoken to by a co-worker at 3.30 pm and last seen at4.00 pm. At 4.45 pm the bogger tag stopped working. At 6.10 pm the bogger waslocated upside down over the vertical edge at the bottom of a 15-metre drop. MrStainton was already deceased. He had died as a result of extensive head injuriessustained in the fall.[79] As a result of its investigation into Mr Stainton's death WorkSafe New Zealand(WorkSafe) identified that it was reasonably practicable for Oceana to have developedand implemented a safe system of work for the creation of the bunds above verticalstopes. This could have been achieved by:• conducting a deep and detailed risk assessment of the building of bundsabove a vertical stope that drew on more than known industry practice;• through that process, identifying a method for placing a physical barrier(such as the use of steel bollards) prior to the creation of a bund; and• using reflective candy canes to increase the demarcation of the stopeedge.WorkSafe concluded Mr Stainton sustained his fatal injuries as a result of Oceana'sfailure to take these reasonably practicable actions.District Court sentence[80] Judge Ingram started by considering the issue of reparation. Mr Stainton wasearning a salary of about $100,000 a year at his death. After deducting payments madeor to be made under the Accident Compensation Act and other payments already madeto his family after Mr Stainton's death,32 a report calculated the estimated value of MrStainton's earnings lost over the course of his working life at between $700,000 and$2.77 million.[81] The Judge queried the underlying assumptions relating to the Consumer PriceIndex (CPI) and interest rate in the report and also noted the short projected life of themine. He considered the low assessment of $700,000 to itself be over-optimistic andfixed the figure of $350,000 as the realistic assessment of the net loss of earnings. Hemade an order that that sum be paid for the loss of future earnings to address thefinancial deficit to Mr Stainton's family caused by his death.[82] The Judge considered that further payments for emotional harm were notwarranted. He noted:33[39] I consider that further emotional harm reparation is not warrantedgiven the sums already paid.[83] He then went on to impose the fine of $378,000 and made the order for costs.32 Oceana had paid $50,000 to Mr Stainton's partner and placed $150,000 in trust for his child.Further payments of $450,000 were made under an insurance policy taken out by Oceana for MrStainton's (and his family's) benefit.33 WorkSafe New Zealand v Oceana Gold (New Zealand) Ltd, above n 6.Discussion[84] Mr Gallaway submitted that the actuarial report relied on by the Judge wasfactually incorrect in that it failed to include the $200,000 paid to Mr Stainton's partnerand child. The Judge was wrong to have assessed the loss in the way he had.[85] WorkSafe does not seek to support the District Court's decision on the facts ofthe case. WorkSafe did not seek any order for reparation for consequential loss at thesentencing hearing in light of payments made pursuant to life insurance policies of$450,000, along with other payments made by Oceana. Ms Longdill accepted that thepayments totalling $200,000 to Mr Stainton's partner and 11-year old son fulfilledOceana's responsibilities in relation to emotional harm as reflected by the DistrictCourt's recognition that a further order for reparation for emotional harm was notwarranted.[86] On Mr Gallaway's calculation, applying the methodology from Schedule 1 ofthe Act, the statutory shortfall (until the child reached 18) of lost earnings would be$121,275.36. That sum is much less than the payments already made by Oceana.[87] For the reasons given above, I agree with Mr Gallaway's submission. Takingaccount of the insurance and voluntary payments made by Oceana, and that theshortfall in accident compensation payments was $120,000 approximately, thereparation order of $350,000 was excessive.[88] In the present case Mr Stainton's family (partner and child) would be entitledto reparation for emotional harm and for the statutory shortfall for loss of Mr Stainton'sincome. While the reparation for emotional harm will necessarily depend on the factsof the particular case, recent awards made in the District Court have been in the rangeof $75,000 to $110,000 in the case of fatal accidents.34 In Mr Stainton's case, and onthe information before the Court an award of between $80,000 and $100,000 wouldhave been appropriate reparation for emotional harm. In addition, the appropriatefigure for reparation for the statutory shortfall for loss of earnings was $120,00034 WorkSafe New Zealand v Transport Waimate Ltd, above n 16; WorkSafe New Zealand v CorboyEarthmovers Ltd, above n 17; and WorkSafe New Zealand v South Port New Zealand Ltd, aboven 17.approximately, so in total at the most reparation of $220,000 was appropriate. Oceanamade direct payments of $200,000 and its employer provided insurance policyprovided a further $450,000 to Mr Stainton's partner and family. Sections 32(6) and10(1)(c) and (d) of the Sentencing Act apply. In fixing reparation the Court must takeinto account Oceana's response to the offending and the measures taken by it to makecompensation. While the insurance payment was of course made by a third partyinsurer, Oceana had at least put the cover of a substantial sum in place. Having regardto the compensation of $200,000 paid by Oceana and the measures it took to otherwisemake good the harm (economic loss) no further order for reparation was required inthis case.Result[89] The appeal is allowed. The order for reparation of $350,000 is set aside. AsOceana does not seek repayment, I make an order as suggested by Ms Longdillpursuant to s 350 Criminal Procedure Act 2011 that Oceana is not entitled to the returnof the payments made.Cropp Logging Ltd[90] Mr Sloan was injured on his first day working for Cropp. However, he was aqualified and competent logger with some 10 years' experience. Mr Sloan wasdesignated as head breaker-out the day he was injured. Mr Sloan's colleague attacheda strop to a log situated towards the top of the ridge lying diagonally across the otherlogs in the pile. It appears the incident occurred when Mr Sloan headed further downthe ridge to attach a strop to another log. That was in breach of approved industryguidelines for safely breaking out stacked logs. During this process, a log dislodgedand rolled on to Mr Sloan seriously injuring him. At the time of the incident a diggerwas operating approximately 80 to 100 metres away on a ridge above the location ofMr Sloan. The vibrations of the machine may have elevated the risk of breaking-outby increasing the risk of dislodgement of the logs Mr Sloan was working on.[91] As a result of the incident Mr Sloan suffered both physical and psychologicalinjuries. The injuries necessitated surgery on internal organs and the use of a catheterfor six weeks. As a result of the accident, Mr Sloan's pelvis was broken in four placesand his hip crushed and shattered. His left femur was fractured as was his lower spine.He expects to be left with a severe limp. His relationship with his wife and family hasbeen affected.[92] WorkSafe conducted an investigation into the incident, following which itconcluded that Cropp had breached its obligations by:(a) failing to complete an Adequate Safety Behavioural Observation of MrSloan when he started work;(b) failing to induct Mr Sloan into his role as head breaker-out; and(c) failing to ensure that machinery was not operating about the area whereMr Sloan was working.District Court sentence[93] Although both Cropp and WorkSafe suggested a figure of $50,000 forreparation, Judge Ingram imposed a reparation order of $80,000. The Judge did notidentify what part of that sum was for emotional harm and what was for other loss.[94] The Judge then assessed Cropp's culpability as high and took a starting pointfor the fine of $750,000. After taking account of mitigating factors and Cropp'slimited financial capacity, the Judge ultimately imposed a fine of $100,000, reparationof $80,000 and costs of $10,000.Analysis[95] Cropp appeals the sentence on the ground it was manifestly excessive. MrLawson submitted:(a) the sentencing Judge erred in categorising the appellant's culpability ashigh; and(b) the reparation award was excessive in light of the material before theCourt.[96] At the outset of the appeal Mr Lawson confirmed that the fine ultimatelyimposed was not challenged on appeal but he suggested the Court should make afinding the Judge was wrong to assess Cropp's culpability as high to guide futuresentencing. I am not minded to do so. There is no need for this Court to providefurther guidance on sentencing in this area (for fines). A full Court did that inStumpmaster. Also, the issue is moot in this case given the ultimate fine imposed.The focus of the appeal was properly on the reparation order.[97] Mr Lawson does submit that the reparation order of $80,000 was manifestlyexcessive and the Judge fell into error in the following ways:(a) the Judge failed to take into account the desirability of consistency insentencing levels;(b) the Judge failed to take into account Mr Sloan's contributory conduct;(c) the Judge took into account an irrelevant matter, namely inflation(without any information); and(d) the Judge placed too much weight on information relating to Mr Sloan'sloss of earnings.He submitted a reparation order in the range of $20,000 to $30,000 was moreappropriate.[98] I agree the Judge fell into error in the present case by taking account of inflationwithout any data to support that view and in failing to identify what part of thereparation order was for emotional harm as opposed to reparation for the statutoryshortfall loss. However, for the reasons given above, I do not accept the Judge was inerror in failing to take account of Mr Sloan's actions.[99] The evidence is that the statutory shortfall after Accident Compensationentitlements to Mr Sloan is $6,337.15. In addition, there are costs relating to medicalappointments and miscellaneous costs. On that basis an order for consequentialeconomic loss of $7,500 is appropriate. It is also clear the accident and resultinginjuries have had a major emotional effect on Mr Sloan and his family. He isstruggling to cope with the long-term impact of the injuries, and the effect of hisinjuries on his life and relationships. In the circumstances reparation in the sum of$50,000, close to the figure suggested by Ms Longdill, is an appropriate figure forreparation for emotional harm.Result[100] The appeal is allowed to the extent the reparation order of $80,000 is set asideand replaced with a reparation order in the sum of $57,500.__________________________Venning J