The Ministry of Business, Innovation and Employment says it has dropped its court case against former Pike River Coal CEO Peter Whittall, saying it "wasn't appropriate" to continue.
Whittall had faced 12 charges under the Health and Safety in Employment Act following the November 2010 blast in the West Coast coal mine that claimed the lives of 29 men.
The ministry's lawyer Mark Zarifeh said it faced "substantial problems" in its case against Whittall, who has maintained his innocence and had earlier entered not guilty pleas.
Family of some of the men were in the court and became upset as Zarifeh outlined the reasons for the decision.
One of Whittall's lawyers, Stuart Grieve, QC, told the court that, as a consequence of the case not proceeding, $3.41 million had come available to enable a voluntary payment to the families and the two survivors.
Whittall had proposed that voluntary payments be made to the families of the dead men on behalf of the PRCL directors and officers.
Also, he had proposed that $110,000 be allocated to each of the dead men's families and the two survivors in reparation for loss and ongoing trauma.
Under the charges Whittall faced, four of those had alleged Pike River Coal failed to take all practicable steps to ensure the safety of its employees at work and that Whittall participated in that failure.
Each charge came with a maximum penalty of $250,000. Imprisonment of Whittall was not an available option.
Fines were also dependent on a defendant's ability to pay.
The Ministry of Business, Innovation and Employment said it halted court proceedings as it said it was unlikely to get a conviction.
The decision was made after a review of the case in the lead-up to the hearing, acting Deputy Chief Executive of the ministry's Health and Safety group, Geoffrey Podger said.
A number of factors were considered relevant and were taken into account in making the assessment, he said.
Fourteen prosecution witnesses were unavailable, while some others were reluctant witnesses. Some evidence would be inadmissible and experts would likely struggle to disprove experts on the other side beyond reasonable doubt.
A trial, planned to be held in Wellington, would be lengthy - 16 to 20 weeks - and costly for both the defence and prosecution.
"There is also the issue of the public interest. This is a particular aspect of the test for prosecution and is not the same as a test of public opinion about the case.
"Following careful consideration, the Ministry determined that the public interest was not met by continuing with a long costly trial with a low probability of success".
Whittall had also offered to meet with the families to convey his "heartfelt sympathy" to the families in person.
"After consultation with the Solicitor-General and careful consideration, it was determined that the offer should be taken into account," Podger said. "However, ultimately it was the low likelihood of conviction together with the other public interest factors weighing against prosecution that led us to the conclusion not to proceed with the charges."
The ministry also noted the successful prosecution of Pike River Coal Ltd, with a record fine and reparations being ordered, Podger said.
"In all of the circumstances, the Ministry did not consider continuing the case against Mr Whittall was therefore warranted," Podger said.
Whittall was charged as a secondary party to Pike River Coal Ltd.
WHITTALL FORMALLY DISCHARGED
Zarifeh invited Judge Jane Farish to discharge Whittall.
Judge Farish said the likelihood of a successful prosecution in the case was "pretty low".
The required pre-trial conferences meant it may never get to the trial stage.
"Some you may believe this is Mr Whittall buying his way out of a prosecution. I tell you it's not.
"The decision ... has been taken at a very high level.
The voluntary payment was quite a side issue and I'm quite satisfied with that".
The directors of the company had no obligation to honour that payment as it was separate. "I see this outcome as being a good outcome. One, because the time and length of hearing and resources for a fineable only offence ... is not in the best interests of your community , or indeed a greater community."
Farish formally discharged Whittall on all 12 charges.
She said she would encourage the ministry to make the voluntary payments to the families quickly, but could not promise it could be before Christmas.
Farish lifted suppression and told the media, "this isn't some behind-the-scene deal that has gone on".
In July, Judge Farish sentenced Pike River Coal Ltd (in receivership) in Greymouth District Court to pay a fine of $760,000 and $3.41m in reparation, which amounted to $110,000 for each of the 29 dead men and the two survivors.
This was unlikely to be paid as the company could not afford it.
Council of Trade Unions president Helen Kelly said the decision to drop charges against Whittal was "wrong on so many levels".
"The Department [MBIE], in this Court case, represents the men killed in that mine. They hold sole discretion to press charges and ensure these men get some form of justice - the decision today adds to the failure of this Department in their duty to the 29 people killed at Pike."
She said it was "insufficient" to say the charges could not be successfully proven.
WHITALL MAINTAINS INNOCENCE
Whittall's lawyer Stacey Shortall visited him at his Lower Hutt home, where he was holed up this afternoon.
Outside, she said he ''absolutely''maintained his innocence.
He had offered to meet privately with the Pike River families next week, and did not want to speak publicly until then.
"He thinks it's respectful to go to them first,'' she said. "It's been a very difficult process, a long process, since he was charged. He has always maintained his innocence, and for the charges to be dropped, he believes that is the right outcome."