Commonsense Prevails in Salter Cartage Case
16 October 2024In our March 2024 article, we questioned the merits of the Police action against Salter Cartage (“SCL”) under the proceeds of crime legislation.
You may recall that a workplace death occurred at SCL premises in 2015. A contractor died from an explosion whilst welding near a 96,000-litre tank containing flammable substances.
In 2017 SCL was fined $258,750 and SCL’s director, Ron Salter, was personally fined $25,000 for breaches of several health and safety and hazardous substance regulations. In addition, Salter was sentenced to four and a half months’ home detention. SCL and Salter were ordered to jointly pay reparations totalling $128,074.21.
Nearly six years after the incident, the Commissioner of Police commenced proceedings to attempt the seizure of $11 million worth of assets from SCL and Salter personally, under the Criminal Proceeds (Recovery Act) 2009 (CPRA).
The CPRA is usually used to seize assets from those that have profited from organised or gang-related crime, drug dealing, money laundering, tax evasion and other related criminal activities.
We argued earlier that if the Commissioner were to succeed with such a prosecution it would have a detrimental impact on small business owners (“SBOs”), which make up a significant proportion of businesses within New Zealand. SBO’s in breach of health and safety regulations would be at risk of losing the majority of their assets, putting them out of business. It is also important to recognise the deterrent effect this would likely have on prospective SBO’s, who would become fearful of starting a business because of the high risks associated with health and safety breaches.
The Commissioner’s action effectively strangled the Company by preventing it from selling any assets, including personal property, and preventing it from raising loans to support cash flow or the growth of the business.
SCL then sought an undertaking from the Commissioner that Police would underwrite SCL’s costs if the Commissioner lost the case. The issue of an undertaking was the trigger for the case to shift from the High Court to the Court of Appeal after a finding by Justice Dr Matthew Palmer that police were obliged to underwrite its case against the Salters.
The Court of Appeal found Justice Palmer was right to do so on the basis that the case against Salters could impact on the business it did or the money it might get from selling up, or both. Ironically part of the Commissioner's argument was that being required to underwrite SCLs costs would have a 'chilling' deterrent effect on Police and discourage further prosecutions.
At the last minute a negotiated settlement has been achieved and the matter will not proceed to trial.
Our view is that the Commissioner should never have pursued such action. SCL and the Salters were subjected to double jeopardy having already paid substantial fines and reparations, but more importantly, given that health and safety offences are often a result of unintentional non-compliance, it is difficult to reconcile employers such as SCL being treated in the same way as those who unlawfully benefitted from organised or gang-related crime.
Finally commonsense has prevailed, but at what cost to SCL and the Salter family over the last 9 years?