He did not hold a skipper's certificate for commercial vessel and left port before a routine safety inspection of his boat had been completed.
Maritime NZ has laid five charges against Davis' company, AZ1, and the same five against her as an individual.
Davis, from Bluff, denies the allegations.
Eight people drowned when the Easy Rider was hit by a rogue wave in March 2012 during a muttonbirding trip to the Titi Islands. The only survivor was rescued after 18 hours in the water clinging to a plastic container.
Mr Stanaway told the court Davis and Mr Karetai were given Easy Rider by a relative in March 2011. It had been inspected the previous year and the inspector declared it was uneconomical to bring it to the required standards to obtain commercial certification.
Mr Karetai and Ms Davis were unaware of this at the time, but later decided to upgrade the boat, spending about $80,000.
Maritime NZ commercial operations manager Arthur William Jobard gave evidence that Easy Rider was surveyed in August 2011 and received certification as a fishing boat authorised to operate with three crew.
It could be used for recreational purposes by Davis and Mr Karetai, but was not to carry passengers.
That was significant, he said, because carrying passengers would have required the vessel to reach a higher standard of survey, or would have required Davis, as owner, to apply to Maritime NZ for dispensation from meeting those standards.
The boat was due for another safety inspection by March 6, 2012, and this was begun by a maritime safety inspector at Bluff on March 14, Mr Jobard said.
However, Mr Karetai decided to leave port before the survey was completed.
The case, which may take two weeks, began slowly yesterday, with several adjournments. The case is being heard by Judge John Strettell.