Incorrect torquing of securing studs leads to significant reparations award and fine

MNZ v Skippers Canyon Jet Limited

In February 2019, the company’s jet boat carrying 9 passengers suffered a gear failure that resulted in the vessel colliding with the wall of Skippers Canyon, causing moderate injuries to several of the passengers. In a Sentencing Decision in the Queenstown District Court dated 9 June 2021, his Honor Judge R J Russell, found that the stud securing the connection between the jet nozzle and impeller housing had been incorrectly torqued which resulted in the failure of the studs causing loss of steering.

The company faced a charge under SS 38(1), 48(1) and 42(2)(c) of the Health and Safety at Work Act 2015 in failing to ensure as far as reasonably practicable that the plant is without risks to the passengers and crew of the vessel.

The company entered an early guilty plea and was ordered to pay the amount of NZ$260,000 by way of reparation for emotional harm under s 21 of the Sentencing Act 2002 which covered the physical injuries and emotional harm to the 9 victims. His Honor adopted a starting point of $500,000 (upper end of the mid culpability band) which he reduced by 25% for an early guilty plea, and a further reduction of 25% for other mitigating factors, including remorse and steps taken by the company to provide financial support and pay for medical and accommodation costs of the victims. The fine was further reduced having regard to the company’s inability to pay a large fine by $200,000, with a resulting end point fine of $50,000.

His Honor noted that “In essence, this is a company run by good people who have let their customers and themselves down on this particular occasion”. He found further that Given the company owned torque wrenches it was reasonable for these to be used whenever tightening these nuts and doing so should have prevented the type of failure which had occurred. Failure to use a torque wrench meant the company was deviating from the jet unit’s manual. Not using the tool meant the nuts were not tightened as required.

This case emphasises the need to follow manufacturer’s guidelines when maintaining equipment.

A copy of the Sentencing Decision can be found here.