Pike River compo in question

JUDGE JANE FARISH: ''One cannot put a value on the lives of the people who died.''
JUDGE JANE FARISH: ''One cannot put a value on the lives of the people who died.''

The Government has paid no compensation to the families of the victims of the Pike River mine disaster, their lawyer, Nick Davidson QC, says.

This was in spite of apologies from the Government and the Ministry of Business, Innovation and Employment over their contribution to the tragedy, he said.

"Nothing has been paid by the Government [to Pike victims]. Not at all."

In comparison, Davidson said the Government paid out-of-court settlements over another West Coast disaster, Cave Creek, near Punakaiki.

In that case, the Department of Conservation was found to have acted illegally and negligently after the viewing platform collapsed on April 28, 1995, killing 13 Tai Poutini Polytech outdoor recreation students and a DOC manager, and injuring four other students.

As a result, the Government apologised and paid out $2.6 million in compensation to victims and their families.

As the Greymouth District Court heard yesterday, many of the Pike families said they were struggling financially in the blast's aftermath.

Davidson said no-one from Pike River Coal Ltd had turned up at the court hearing today or yesterday and there had been no expression of remorse from the company.

"Now there is no money to pay reparation."

Later today law firm Minter Ellison Rudd Watts issued a statement on behalf of Pike River Coal directors John Dow, Ray Meyer and Stuart Nattrass.

The directors did not accept Judge Jane Farish's comments in court today that no funds had been forthcoming from Pike River to help the families.

"It should be known that Pike River and NZOG contributed very shortly following the explosion a total of $1 million to funds set up for the benefit of the families."

The directors offered their sympathy and condolences to the families.

Davidson said New Zealand Oil and Gas got a "massive payment" when Pike received its $80m insurance payout.

"Where has that gone?"

In September 2011, NZOG chief executive David Salisbury said it would receive $41.3m from that insurance payout, including $3m as part payment of its total unsecured debt of $15.1m and about $38.3m toward its $53m secured debt.

"New Zealand Oil and Gas should be shelling out and so should Pike's directors," Davidson said.

"This company runs for the hills and just disappears into the mist.

"This is not an accident. This is caused by a company that was found to be responsible for the deaths."


The spokesman for Pike River victims' families also called on the company's biggest shareholder to foot the bill for compensation.

Clapping broke out in the public gallery of the court when Farish announced the company would be fined $760,000 and ordered to pay $3.41m in reparation.

This amounted to $110,000 for each victim and the two survivors.

But receiver John Fisk, of PwC, said Pike River Coal Ltd had only $500,000 in available funds which belonged to secured creditors.

The families would become unsecured creditors; however, they would have a claim to $156,000 in leftover insurance money.

Bernie Monk, spokesman for most Pike families, said outside court he doubted if the families would see any of the reparation money but called for NZOG to pay up.

"It's almost laughable to hear them say last year how many millions profits that they made over and above a disastrous year that they had and if they walk away from this, you know, God help New Zealand."

Pike's former directors would not be allowed to "just get on with their lives and forget about us".

"We're not going to let it happen."

Judge Farish's judgment was a "stake in the ground" for other companies who did what Pike River Coal Ltd had done to the families, he said.

But NZOG chief executive Andrew Knight said the company had already paid a considerable amount, $25m, towards Pike's wind-up costs.

It had also, with Pike, contributed $1m towards the two victim trusts.

The company was owed $35m in total and did not expect to see any of it.

"So I guess as an organisation, NZOG has stepped up pretty well ... I think you'd look at it and say NZOG's the only party that has fronted up to a degree."


Some Pike River families have likened their plight to that of families in the Cave Creek disaster and say the Government could step in to pay them financial compensation.

In the case of Cave Creek, the Government set up a straightforward process to assess payments to families and survivors, a statement from the families said.

"This is an avenue open to the Government but not yet taken."


The families planned to make submissions to the Government to ensure legislation was changed so companies were more accountable, said Monk, whose son Michael, 23, died in the blast.

Pike's former safety and training manager, Neville Rockhouse, who lost his son, Ben, 21, in the blast and a second son, Daniel, now 27, survived, called for acknowledgement by Pike River Coal over the prosecution.

"Mistakes were made on that project and no-one can learn from those mistakes until you first acknowledge that you'd made some, and that's the first step in this thing never happening again in this country."

He agreed it had been an emotional time in court with many tears shed since the sentencing began yesterday morning.

"It never goes away. It's with you every day.

"It's been an emotional two and a half years and I don't think any Kiwi has not been touched by this disaster in some way or form."

He hoped the families would receive some reparation, including his son, Daniel.

"As the judge says, there might be insurance so if that's possible then that's fine."

Some Pike family members who attended the sentencing left court today in tears, with others relieved it was over and pleased with the hefty reparation order.

"To me, it's the first victory for the families," said Rick Durbridge, father of Dan Herrick, 36, who died in the blast.

He hoped the judgment would encourage company directors and managers to get more involved in their workplaces to ensure problems were detected.

"I'm quite embarrassed having been a miner at Pike River."


Fisk said that in cases where companies in receivership do not have enough money to pay compensation, the liability may have to be written off. Any fines would not be even considered claimable under the creditor process.

"Any reparations become an unsecured claim against the company so if there isn't sufficient assets to pay the creditors, which is the case here, then unfortunately, there isn't money available distribute."

Fisk said in some situations, compensation can be sought against company directors.

Chief executive Peter Whittall is about to face several health and safety charges laid by the Ministry of Business, Innovation and Employment. But other directors remain uncharged.

At present he could see no avenue for the families to be paid.

"It's an unfortunate situation but that's the commercial reality of it."

However, in court today, Judge Farish suggested the company's directors and parent company might be expected to come to the party.

Judge Farish said she could rule not to impose reparation if she thought the company was unable to pay but she believed it could be paid by existing shareholders or directors.

The directors had insurance worth a considerable amount and NZOG had gained benefit from keeping the company in receivership rather than liquidating it.

Pike River was a shell company and the directors had resigned. The remaining proceeds of $25m were contingent on the mine being reopened.

Meanwhile, the Green Party said the Pike River families had been cheated out of their compensation.

Spokesman Kevin Hague called on the Government to ensure the full legal compensation was paid to each family.

"These families should be at the front of the queue for compensation and payment, but because the legal system puts them at the back, they could walk away with very little," he said.

"It is wrong that the families only get the leftover insurance money once everyone else gets in first."


Judge Farish found the company had a high level of culpability for both its methane management and ventilation management, which were four charges.

Ventilation was an essential part of the safety of a mine, ensuring gas in the mine did not reach explosive levels.

"There were significant deficiencies in the company's ventilation management plan."

She blamed the two factors as causing the explosion and the subsequent tragedy on November 19, 2010.

Judge Farish was very critical of the company while sentencing it today.

"There were many indicators that the mine was in a potential explosive position but the warning signs were not noted or heeded."

She said those warning signs went unnoticed by Pike management and by the men working in the mine.

Reparation was to compensate for physical, emotional and psychological harm.

"One cannot put a value on the lives of the people who died."

"We sat yesterday through a very tough morning."

She criticised Pike River Coal Ltd for its poor communication in the immediate aftermath of the blast, with many families finding out via media that their loved ones.

"The victim impact statements were harrowing. They all feel deep sorrow."

She said in reading the statements, it was clear they desperately wanted to have their men's bodies retrieved from the mine.

Milton Osborne's widow, Anna Osborrne, wept openly as the judge spoke of how important it was for families to bury their loved ones. Judge Farish also struggled to maintain her composure.

Judge Farish said it seemed cruel that Daniel Rockhouse had to continue working in a mine when it obviously was so hard for him.

She agreed it was "the health and safety event of the generation" and she hoped there would be no repeat.