There were mechanical problems with the fan in the month before the blast.
Mr Firmin said fans were normally sited outside a mine for ease of maintenance.
But Engineering, Printing and Manufacturing lawyer Nigel Hampton QC said fans located inside a mine were "not intrinsically safe - that's the reason why they're outside, isn't it?''
Pike River Coal former chief executive Peter Whittall had said there was nothing in the regulations to stop the company from putting a fan underground, Mr Firmin said.
"You just took his word for it?'' Mr Hampton asked.
Mr Firmin said he also looked at the regulations.
Mr Hampton said that in 2007, Pike River and contractors URS persuaded Mr Firmin that a canopy over the portal to stop rockfalls was not immediately needed.
Just three months ago - nine months after the mine exploded - he wrote to Pike River Coal with a reminder that the canopy was to be installed once the conveyor had been removed from the portal.
Mr Firmin said the canopy was "probably in now''.
When mines inspector Kevin Poynter took responsibility for the mine, he "probably'' did not alert him to the need for the canopy, Mr Firmin conceded to the inquiry.
Families' lawyer Nicholas Davidson QC asked whether the company had been under "severe'' pressure to meet its production goals.
But Mr Firmin said he did not recall ever looking at the company's own "near miss'' log, which was shown to the inquiry today.
The vertical escapeway shaft did comply with the regulations, Mr Firmin said, although he agreed it may not be useable in the very emergency for which it was required.
Mr Davidson said former chief mine inspector Harry Bell had told the commission the Hawea Fault - which he expected would be very gassy - was tunnelled through without adequate ventilation, and by using non-flameproof equipment.
Mr Firmin said he could not find anything to stop the company. He was not aware of the nearby Mount Davy disaster, caused by an explosion as miners drilled through a fault.
When Pike River Coal initially talked about blasting the face with p1 explosives, all men were to be removed from the mine. But when it was raised again, the company wanted to leave the men underground, in a safe place.
If the company produced an expert who said something was safe, the Department of Labour would then have to disprove their report to stop it, Mr Firmin said.
"We could not prove it was an unsafe place.''
Memorial to be unveiled
Meanwhile, Pike River Mine families will hold a private unveiling of a memorial to their men, amid concerns the public service on Saturday in Greymouth is becoming "politicised''.
A bevy of politicians - including the Prime Minister John Key and Labour leader Phil Goff - are lined up to attend the Rugby Park service, which is timed to finish at 3.44pm - exactly 12 months after the mine exploded, killing the 29 men working underground at the time.
However, the families are unhappy with the level of political interest in the memorial, just one week out from the general election, according to families' lawyer Colin Smith.
As well as the leaders of the two main parties, others confirmed include a co-leader of the Green Party and the three West Coast MPs. Governor General Sir Jerry Mateparae will also be in the grandstand.
One of the organisers, retired Archdeacon Robin Kingston of the Holy Trinity Anglican Church, stressed that the emphasis was on the families, and organisers were "trying to ensure the event was as non-political as possible''.
The heads of various government departments and police were also expected, but he would not say which because it was "a bit delicate''.
At least 2500 people are expected for the open air service in Greymouth, although 5000 programmes have been printed in case numbers swell.
Mr Smith said the families he had spoken to were surprised at the level of political involvement in the day because they thought the memorial would have had more of a community focus.
A private service for the families only will be held at Atarau, near the mine entrance, on Saturday morning and he appealed for privacy and for the news media to stay away.
It was intended to give families the time and space to reflect and remember their loved ones, without the presence of dignitaries, politicians and the media, Mr Smith said.
They had a full day of public engagements, including the opening of a 29-rose memorial garden in Greymouth, the public service at Rugby Park and another memorial service in Blackball.
The Atarau service and unveiling would be the one opportunity for the families to be alone.
Meanwhile, the main service will feature an address from Engineering, Printing and Manufacturing Union delegate Jed O'Connell on behalf of the 29 victims, Grey District Mayor Tony Kokshoorn on behalf of the community, Bernie Monk for the families, and Focus Trust family liaison officer Kathryn Leafe.
Fourteen-year-old Alisha Osborne, whose father Milton Osborne, died in the explosion, will sing, along with Tracey Cameron, who will perform a tribute to her stepson Ben Rockhouse, who also perished.
Portable stages will be set up on Friday afternoon, along with giant TV screens.
The service will begin at 2.45pm and finish after observing a minute's silence at 3.44pm.
