Pirates shot a New Zealand man dead at close range with a shotgun before attacking his wife with a machete after boarding the family's vessel under the cover of darkness in Panama.

The dead man is 60-year-old Alan Culverwell, a former paua diver from Picton, who was remembered last night as a dedicated, loving husband and father.

His traumatised wife and two children, one of whom was also injured during the attack, remain in hospital and distraught relatives are rushing from New Zealand to be by their side.

The perpetrators, who wore hoods and stole an outboard engine during the attack, are still on the run. Local authorities are vowing to bring them to justice.

It was supposed to be the journey of a lifetime for the adventurous Kiwi family.

They left home before the chill of winter, bought a boat for a bargain in the United States and let the warm trade winds start them on a journey home to New Zealand that was expected to take up to two years.

But they only made it as far as the central American country of Panama before crossing paths with the pirates who would violently alter the course of their lives.

Around 2am local time on Friday, Culverwell, who had worked frequently in the Chatham Islands, emerged from the sleeping area of his family's 65-foot launch while it was off the Guna Yala region, on the country's northern coastline.

He'd woken to a noise on the vessel's roof.

But when he went to investigate — in an incident that has similarities to that of Kiwi sailing legend Sir Peter Blake, who was shot by pirates on a vessel near the mouth of the Amazon River in Brazil in 2001 — he paid with his life.

Culverwell's sister Derryn Hughes told the "Herald" her brother had been shot at "very close range" with a shotgun.

His wife Derryn was then attacked with a machete, suffering a shoulder wound, and one of their children also suffered minor injuries. Derryn Culverwell later called for help to New Zealand.

The three surviving family members are receiving treatment in hospital in Panama City.

Arrangements are being made to bring Culverwell's body back to New Zealand.

Derryn Hughes said her brother was a dedicated, loving husband, father, son, brother, uncle and friend to all.

"His family were his everything. Nothing could have prepared us for the attack that took place overnight and has tragically taken Alan's life.

"We want to assure you all that Derryn and the children are safe, while understandably traumatised.

"We are so grateful they survived ... and we will [support] them through the coming days, weeks, months and years."

Alan Culverwell and his wife Derryn were attacked by pirates in Panama. Photos / Facebook

The Ministry of Foreign Affairs and Trade would only say it was responding to an incident involving a New Zealand family in Panama.

"Due to privacy considerations, no further information will be provided."

But a source in Panama told the "Herald" Culverwell was killed in an attack by pirates. She didn't have any further information.

A report by the Spanish-language media outlet "Mi Diario" said the incident took place on May 2 near the island of Dad Naggwe Dubbir, and the attackers wore hoods and stole a boat engine.

The Culverwells are used to the gentle sway of the water below their feet.

Their journey began when they sold their beautiful and isolated home in the Marlborough Sounds. The home near Picton could only be accessed by boat.

Paua Industry Council chief executive Jeremy Cooper said that having searched the world for a nice boat for years, they used the money from the sale of their property to buy a "big 65-footer" in Florida.

Alan Culverwell and his wife Derryn with their two children. Culverwell was shot dead by pirates. Photos / Facebook

"It was a beautiful big boat that had been owned by someone with way too much money and [Culverwell] just timed it perfectly, he bought it in Florida for way less than had been spent on it," he said.

The family then flew to Florida and "decked out the boat and started driving it home".

Facebook posts showed the couple posting a glowing review in March on the page of a Florida marine service company that installed solar panels and other gear on their boat.

They also stopped off at the Panamanian island of Bocas del Toro where they played volleyball and became good friends with the owners of the Drunken Monkey Panama bar, which has room for boats to pull up alongside it.

The Pacific Puddle Jump website showed the family were due to leave shortly for French Polynesia as part of an annual and social sailing event.

Cooper told the "Weekend Herald" the paua community was rallying behind the family and trying to raise money to support them.

 

"A number of people have already rung me today to say 'how can we contribute'," Cooper said.

There would also be costs associated with bringing Culverwell's family home and working out what to do with their boat, Cooper said.

He said Culverwell was known as a "legend" in the Chatham Islands paua industry for being an early campaigner for catches to be managed sustainably.

"He certainly put his shoulder to the wheel ... [and did] the hard graft when other people were still talking about it," Cooper said.

Cooper had known Culverwell since the early 1990s. He had also known Culverwell's school-teacher wife Derryn for decades, since she taught his children when they were young.

A "brilliant teacher", Derryn had been home-schooling the couple's children on their boat as they made their two-year journey home.