The pair accepted an offer from a stranger to stay aboard his yacht in the early hours of the morning, and it was the last time they were seen alive.
[6] In December 1997, friends Ben Smart (aged 21) and Olivia Hope (17) celebrated New Year's Eve at Furneaux Lodge, located in the Endeavour Inlet of the Marlborough Sounds, with 1500–2000 other partygoers.
[7]: 46 When Hope and Smart found others had taken their booked place on the boat berths, they boarded a passing water-taxi driven by bartender Guy Wallace.
At the time, Wallace had three other passengers on board: Hayden Morresey, Sarah Dyer, and an unidentified man who would become crucial to the police investigation.
The investigation featured requests for information from the public, significant numbers of interviews across the country and months of extensive searches of the waters surrounding the Endeavour Inlet.
In his police statements on the third and fifth of January, Guy Wallace (the driver of the water taxi) described the unknown man with whom Hope and Smart left his water-taxi as having two days growth on his face, possibly arm tattoos, wiry build, 5'9", short dark wavy hair, being scruffy in appearance and wearing a Levi shirt with jeans.
[12] Roslyn (Roz) McNeilly, who was bar manager at Furneaux Lodge on New Year's Eve, also identified Watson from the blink photo in montage B.
[16] Police analysed thousands of photos taken on New Year's Eve and interviewed all of the boat skippers, but were unable to corroborate Wallace's reports of a ketch in the Endeavour Inlet that night, or find any of the "three to five" vessels it was rafted to.
[19] Watson had 48 criminal convictions at the time, mainly from when he was a teenager for burglary, theft, cannabis offences, two counts of possessing an offensive weapon and one for assault when he was 16.
[7][20] Watson was being interviewed by Detective Tom Fitzgerald on 12 January when Police seized Blade and executed search warrants on the homes of his parents and sister.
Later, Watson would accuse police of influencing media coverage of the case, suggesting they leaked rumours to reporters that his family were criminals, that he was a guilty man and that he had an incestuous relationship with his sister.
Gerald Hope, Olivia's father, also asserted that the police deliberately leaked details of Watson's criminal history and were responsible for the unsubstantiated suggestions of incest.
Police recorded 70-plus hours of conversations and during that time they regularly fed Watson’s former girlfriend questions to ask hoping he would incriminate himself.
[22] Prior to his arrest, the media were free to report police comments and actions which demonstrated that Watson was the prime suspect without fear of jeopardising a fair trial.
When interviewed by Mike White 18 years later, Watson said: "Every comment he'd made was reinterpreted to sound sinister, every action he'd taken was twisted to seem suspicious".
[25][11]: para 3.14 The main plank of the Crown's case was that Watson invited Smart and Hope to sleep on his yacht in the early hours of 1 January 1998 – and that this was the last time they were seen.
Some of the occupants of the neighboring boats, Mina Cornelia and Bianco, testified they were woken up by Watson in the early hours of the morning as he wanted to continue partying.
[26] The Crown argued it did not matter that the prosecution could not prove how Watson got back to shore, but said he must have done so because witnesses said he was involved in an altercation on shore, probably between 3–3.30 a.m.[1] The prosecution claimed the Blade left its mooring at Endeavour Inlet probably before 6 a.m. on New Year's Day with Ben and Olivia's bodies; that Watson dumped them into Cook Strait, returned to Erie Bay and lied about the time he arrived.
[11]: para 3.1 Much of the Crown's case was circumstantial and largely relied on testimony from two prison informants, one of whom later admitted he lied,[11] and the identification of Watson by Guy Wallace and Roz McNeilly – both of whom subsequently presented affidavits claiming the police had misled them.
Police never received the level of validation they were seeking from these tests that the hairs belonged to Olivia, but still presented the results as evidence at Watson's trial.
[29] Watson was convicted of the murders in September 1999 after an eleven-week trial[34] and sentenced to life imprisonment with a minimum non-parole period of seventeen years.
The complaint alleged that the head of the inquiry, Inspector Rob Pope, ignored relevant evidence, spread rumours about Scott Watson and his family, swore false affidavits to obtain search warrants; and that the police 'bought' or pressured two prisoners into telling lies in court and that they deliberately or accidentally contaminated the hair samples found in Watson's boat.
It states that the photograph montages used by police breached so many rules it "exposed the integrity of the investigation to justifiable criticism and to the drawing of inferences about intention and motivation".
The head of the IPCA, Justice Lowell Goddard said it was a difficult inquiry and "some actions of police fell short of best practice, and had the potential to influence witnesses".
[45] In June 2020, it was reported that Watson's case would be referred back to the Court of Appeal because of continuing concern about the reliability of the forensic testing used to show the two hairs found on a blanket belonged to Olivia.
[2][3][46][47][48] In May 2022, the Court also agreed that when the hearing goes ahead, Watson would be allowed to challenge whether the controversial eyewitness evidence (related to the 'blink photo') was properly obtained and should have been heard by the jury at his trial.
[50] On 10 June, the defence argued that the "plastering" of Watson's face in the news media prior to his arrest for the murders may have influenced eyewitness descriptions of the suspect.
[52][53] On 11 June, forensic scientists Paige McElhinney and Sean Doyle were questioned about the two blonde hairs linked to Olivia Hope that were found on a blanket on Watson's yacht.
[65] On this basis, the Board will not release Watson until he has had psychological treatment to address his risk of reoffending, which based on his murder convictions, has been assessed as high.
Ron Young decided to hold a hearing at a later date so that the different psychologists could be questioned about their reports so board members could understand the varying risk assessments.