Defendants sentenced following harrowing accounts from victims and family members in the latest decision arising out of the Whakaari (White Island) disaster

Whakaari (White Island) erupted on 9 December 2019, resulting in the deaths of 22 of the 47 people on the Island and serious injuries to the remaining 25.

We have previously reported on:

• The successful application by the National Emergency Management Agency (NEMA) to have charges dismissed.¹
• The unsuccessful application by the directors of Whakaari Management Limited (WML) to have the charges against them dismissed.²
• The decisions arising out of the substantive trial where WML was found guilty on one charge and the charges against the directors of WML and two tourism operators, ID Tours and Tauranga Tourism Services Limited, were dismissed.³

Following hearings in February 2024 District Court Judge Thomas issued two judgments⁴ sentencing the six remaining parties:

• WML has been fined $1,045,000 and ordered to pay reparations of $4,880,000.
• White Island Tours Limited (WTL) had exclusive rights to bring tourists to the Island by boat. It had four staff and 38 customers on the Island at the time of the eruption. WTL has been fined $517,000 and ordered to pay reparations of $5,000,000.
• Volcanic Air Safaris Limited (VASL) had exclusive rights to transport tourists by helicopter from Rotorua to the Island. At the time of the eruption, it had one employee and four customers on Whakaari. VASL has been fined $468,750 and ordered to pay reparations of $330,000.
• Aerius Limited (Aerius), a helicopter tourism operator, did not have any employees or customers on the Island and has been fined $290,000.
• Kahu (NZ) Limited (Kahu), another helicopter operator, had no employees or customers on Whakaari and has been fined $196,000.
• The Institute of Geological Nuclear Sciences Limited is a Crown research institute responsible for monitoring, amongst other things, volcanic activity in New Zealand. GNS has been fined $54,000.

WML have appealed. We look forward to reporting on the outcome of their appeal.

The first judgment dealt with WML and the four tourism operators.

DCJ Thomas was scathing of the tourism operators’ risk assessment practices. They did not obtain advice from volcanologists, nor did they pay for detailed risk assessments which GNS could have provided. In some cases, customers were not provided with any safety information until they arrived on Whakaari.

The Judge was also critical of WorkSafe. It provided safety audits for WTL but failed to identify the inadequate safety practices.⁵

Reparations were sought for the 47 victims of the disaster. They were awarded against WML, WTL, and VASL. DCJ Thomas found that significant reparations were justified noting that:

No review of prevailing reparation levels conducted by any other court contemplates emotional harm of the scale and nature that is present in this case.

The starting point for reparations was $250,000 per victim.⁶ In total, reparations of $9,550,000 and $660,000 were awarded against WTL and VASL respectively.

Thomas DCJ considered there to be high levels of culpability by each defendant. The maximum fine available against WML, WTL, and VASL was $1,500,000. The maximum fine available against Aerius and Kahu was $500,000. The lower starting point reflects that Aerius and Kahu did not have employees or customers on the island at the time of the eruption.

Discounts were applied for:

• Guilty pleas – which were larger for WTL which pleaded guilty earlier.
• Cooperation.
• Remorse – which was applied to all defendants except WML, because it did not plead guilty and had not demonstrated remorse.
• The actions of VASL and Kahu, whose employees flew to the island after the eruption at significant risk to themselves, and without whom the death toll would have been higher.

WTL’s fine was adjusted to maximize the amount available for reparations. On the initial calculation of reparations, WTL would have been ordered to pay $4,775,000. Judge Thomas adjusted the fine against WTL down and the reparations payable up by $225,000 in order to exhaust the full amount of insurance coverage. The reparations payable by WML, shared in part with WTL, were reduced for the same reason.

Aerius and Kahu were given five years to pay their fines as they have limited financial means.

WML has no assets, and consequently there is a question mark over whether either the fine or reparations will be paid. The Judge stated that it was open to the directors and shareholders of WML, the Buttles, to advance the funds for payment of reparations, noting that although there is no legal or commercial basis for doing so “there is an inescapable moral one”.

GNS is responsible for monitoring volcanic hazards nationally. As part of that responsibility, GNS staff visit Whakaari on a regular basis. This is the primary distinction between GNS and NEMA, which enabled it to have the charges against it dismissed in part because its staff do not visit the island.

GNS breached the HSWA by failing to share the risk assessments with the helicopter operators which it contracted despite a specific recommendation that risk assessments be shared with contractors following a close call involving GNS in the Tongariro National Park.

When assessing the fine, the fact that details of the risk assessments were sometimes passed to the helicopter operators during informal “tailgate” discussions was a mitigating factor.

GNS was fined $54,000.

It is tempting to discount these rulings as being of little precedent value, having been largely influenced by the scale of the disaster. Typical reparations for a fatality have, in recent years, been around the $100,000 mark. In this case the starting point was $250,000 per victim.

In our view that would be unwise. New Zealand markets itself as the home of adventure tourism. The potential exists for a disaster of similar scale. One has only to look at the potential for lahar on the slopes of Mount Ruapehu, earthquakes in the Southern Alps, and avalanches on New Zealand’s ski fields.

This ruling may also have the effect of increasing reparations in “ordinary” cases, a tendency of uniquely high awards which the courts have, to date, resisted. If that happens then PCBUs will need to consider whether their current insurance is adequate. VASL’s was not.

Of particular interest to Insurers of PCBUs is that where some defendants are “over insured”, and others may not be able to satisfy a reparation order, the court is willing to turn to insured parties to increase the award of reparations against them.

1. https://mcelroys.co.nz/worksafe-new-zealand-v-national-emergency-management-agency/
2. https://mcelroys.co.nz/worksafe-new-zealand-v-buttle/
3. https://mcelroys.co.nz/whakaari-management-limited-found-guilty/
4. WorkSafe New Zealand v Whakaari Management Limited and Others [2024] NZDC 4119 and WorkSafe New Zealand v Institute of Geological Nuclear Sciences Limited [2024] NZDC 4149.
5. But for the intervening eruption on 27 April 2016 the safety audits obtained by WTL may have been sufficient to discharge it of liability.
6. Adjusted confidentially on an individual basis for each victim.

This publication is intended as a general overview and discussion of the content dealt with. It should not be used in any specific situation, in which case you should seek specific legal advice.