Ms Holden said there was no causative link between Mr Whittall's alleged offending, and the explosions in the mine.
A member of the public gallery called out 'you're joking' as Ms Holden laid out her argument.
Ms Holden said the prosecutor had to weigh up the cost of the case against the low liklihood of a successful prosecution.
The prosecutor knew Pike River Coal was unlikely to pay reparations of $3.4 million as ordered, she said, and the $3.4 million offered by Peter Whittall covered those costs.
Ms Holden says the decision to drop charges against former Pike River Mine chief executive Peter Whittall was not 'secret trading'.
Those bringing the judicial review say families were not consulted before a decision was made to accept $3.4 million of insurance money, and to drop the prosecution.
But Ms Holden says a number of steps were taken to let families know what was happening, before the public.
She says with so many families involved, the prosecution felt it would be impossible to reach an outcome all the families of those who died in the mine would be comfortable with.
Ms Holden said all but two of the families affected in the Pike River mine tragedy have accepted a payout from Mr Whittall.
She said it was unclear what quashing the decision to drop Peter Whittall's charges and take the $3.4 million payout would mean for those families.
Ms Holden said the decision not to proceed with Mr Whittall's prosecution wasn't easy, and was made after careful consideration of a number of factors.
