Canterbury Regional Council v Shaskey

[2017] NZHC 2540

IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY

I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE

CRI-2017-409-000123 [2017] NZHC 2540

BETWEEN

CANTERBURY REGIONAL COUNCIL

Appellant

AND

AARON LUKE SHASKEY Respondent

Hearing:	11 October 2017
Appearances:	C Lange for the Appellant N A Beadle for the Respondent (no attendance required)
Judgment:	18 October 2017

JUDGMENT OF NATION J

[1]      On 30 March 2016, a Canterbury Regional Council (CRC) officer found a large amount of dairy effluent had spilled over and flowed into a paddock on a dairy farm near Rangiora.  The farm was owned by Mairangi Dairies Limited (Mairangi). They hired A&H Dairies Limited (A&H) as a contract milker.  Mr Shaskey was a director and shareholder of that company and the individual responsible for the day to day farming operation.

[2]      Mairangi, A&H and Mr Shaskey were all charged with unlawful discharges offences under the Resource Management Act 1991. All pleaded guilty.

[3]      On 26 January 2017, A&H and Mairangi were each convicted, fined $29,000 and ordered to pay Council investigation costs of $2,740, Court costs of $132.89 and

solicitors’ costs  of  $113.   The  Environment  Court  Judge  did  not  deal  with  Mr

CANTERBURY REGIONAL COUNCIL v SHASKEY [2017] NZHC 2540 [18 October 2017]

Shaskey at that time.  The sentencing Judge noted he was not before the Court then because he was taking part in “a restorative justice system”.

[4]      On 30 June 2017, another Environment Court Judge discharged Mr Shaskey without conviction on the charge to which he had pleaded guilty.   On 21 August

2017, that sentencing Judge, under the Costs in Criminal Cases Act 1967 (the Act), ordered the CRC to pay costs of $2,000 to Mr Shaskey. The CRC appeal against that decision.

Jurisdiction

[5]      The  CRC  had  a  right  of  appeal  pursuant  to  ss  270  and  271  Criminal

Procedure Act 2011.  Under s 274, the Court must determine the appeal by:

(a)   confirming the decision appealed against; or

(b)   varying the decision appealed against; or

(c)   setting aside the decision appealed against; or

(d)   making any other order it considers appropriate

Approach on appeal

[6]      An appeal against a costs award is an  appeal  against a discretion.   The relevant principles were summarised by the Court of Appeal in V (CA428/2012) v R:1

[21]      In R v Reid, the Supreme Court dealt with an appeal against an award  of  costs  under  the  [Costs  in  Criminal  Cases]  Act.    The  Court confirmed  that  the  decision  to  award  or  not  award  costs  under  the Act involves the exercise of a broad discretion and that what might generally be described as an error of principle by the judge must be established if the exercise of the discretion is to be challenged successfully on appeal.   In describing the error required as it did the Court no doubt had in mind the discussion in Kacern v Bashir in relation to appeals against discretionary decisions.

[22]     As  this  Court  noted  in  Delamere  v  Serious  Fraud  Office,  the Supreme Court [in Reid] made it clear that the weight given to the statutory criteria does not engage matters of principle affecting the exercise of the discretion.   The Supreme Court also identified the difficulty faced by an appellate court in attempting to capture “the ephemeral but significant impressions which inform the assessments and discretions of the trial judge”.

1      V (CA428/2012) v R [2013] NZCA 211.

[7]      In Kacem v Bashir, the Supreme Court noted that the criteria for a successful appeal against the exercise of a discretion is stricter, identifying the four grounds of appeal as:2

(i)       Error of law or principle;

(ii)      Taking account of irrelevant considerations;

(iii)     Failing to take account of a relevant consideration; or

(iv)     The decision is plainly wrong.

District Court decision

[8]      The Judge considered s 5 of the Act applied because the discharge without conviction was deemed to be an acquittal.3   He rejected the submission that the CRC could not be criticised for continuing with the prosecution after Mr Shaskey had failed to complete obligations he had accepted as part of a diversionary process.  He said that, in doing this, the CRC was really inviting him to revisit obligations he had made when sentencing Mr Shaskey.  He nevertheless found that the CRC had at all times  in  the  process  acted  in  good  faith  and  not  with  any ill-will  towards  Mr Shaskey.

[9]      The Judge found the CRC had been incompetent in not recognising the need to adopt a global approach to the sentencing of both A&H and Mr Shaskey and in not considering this after the other co-defendants had been sentenced.4   As a result, he found the CRC’s conduct fell short of what a reasonable and fair-minded prosecutor would have done in the circumstances and that it should be answerable for this in a costs award.  He considered this made it necessary for Mr Shaskey to engage counsel to plead against a sentencing outcome (conviction and fine) that the

CRC ought never to have pursued.   He found that constituted “special difficulty”

within the meaning of s 13(3) of the Act so as to justify an award in excess of scale.

2      Kacem v Bashir [2010] NZSC 112, [2011] 2 NZLR 1 at [32].

3      Sentencing Act 2002, s 106(2).

4      As to that, need to be referred to my judgment in Hardegger v Southland Regional Council

[2017] NZHC 469, [2017] 2 NZLR 852.

[10]     The actual costs incurred were $2,302.50, excluding GST.  Mr Shaskey was awarded costs of $2,000.

Mr Shaskey’s position

[11]     Mr Shaskey said he would simply abide the decision of this Court.  I thus did not have the benefit of submissions in answer to those made for the CRC.

The CRC’s submissions

[12]     For the CRC, Mr Lange said that, despite the deemed acquittal, the right to claim costs under s 5 of the Act, where there has been an acquittal, should be interpreted as to require an actual acquittal, not a deemed acquittal.

[13]     Section 5 gives the Court a discretion to make a costs order “where any defendant is acquitted of an offence or where the charge is dismissed or withdrawn, whether upon the merits or otherwise”.   The editors of Adams say that under the Act:5

Costs that may be ordered against the prosecution are limited to cases where the prosecution has been unsuccessful or the prosecution involved a difficult or important point of law.

[14]     Mr Lange acknowledged the difficulties I would face in deciding this point in the absence of a submission in opposition to his.  Given the decision I have reached on other matters, I do not need to and I will not do so.

[15]     The Judge did not suggest that the CRC had been at fault in laying a charge against Mr Shaskey personally as well as against his family’s company, A&H.  With his guilty plea, Mr Shaskey had acknowledged that, given the evidence and legal elements of the charge, the laying of that charge against him was justified.

[16]     With  prosecutions under the  RMA,  it  is  common  for charges  to  be  laid against both a company and one of its officers or an employee where an individual

has been directly responsible for whatever has happened to justify a prosecution.  It

5      Simon  France  (ed) Adams  on  Criminal  Law  –  Procedure (online  loose-leaf ed,  Thomson

Reuters) at [CPA364.09].

is  consistent  with  the  purposes  of  the  RMA that  such  individuals  can  be  held personally accountable for their acts or omissions and not be able to avoid such responsibility through having only the company with  which they are associated liable for what they have done, or have not done.

[17]     The  Judge,  however,  said  the CRC  had  been  careless  in  failing to  even consider the need to take a global approach to sentencing after Mairangi and A&H had been sentenced.

[18]     Mr  Lange  argued  the  Judge  was  wrong  in  finding  the  CRC  had  been negligent in continuing with the prosecution and filing submissions seeking a conviction and fine.

[19]     When A&H and Mairangi were sentenced on 26 January 2016, a different Judge noted that all defendants had entered pleas of guilty, but his sentencing notes indicate he understood he was then dealing with just the two companies.  He did this when assessing the culpability of those two companies and when he discussed the impact the sentence would have on them, noting as he did so that each was able to pay a fine.   In considering the issue of remorse, he said “both companies claim remorse but I have to say that it always worries me a bit when companies claim remorse as  opposed  to  individuals”.    He concluded that  he could  not  give any particular deduction in terms of personal mitigation.   He accepted there were negligent discharges and said the arguments over whose job it was and what they each meant by maintenance of the system showed “both parties in a rather poor light”.

[20]     The Judge arrived at a starting point for “both companies” of $70,000.   In looking  at  the  personal  circumstances  of  the  defendants  he  was  sentencing,  he referred to the personal records of both companies without making any reference to Mr Shaskey personally.

[21]     In its submissions for that sentencing, the CRC acknowledged A&H and Mr Shaskey were effectively “one person” and did not make any comment as to what the penalty might be for Mr Shaskey personally but reserved the right to make comment

in relation to a discharge application, should that be necessary.   It  submitted a starting point of $80,000 would be appropriate for each of the companies.

[22]     In their submissions for that initial sentencing of the companies, the CRC referred to the way it submitted both Mairangi and A&H were culpable for the offending.  In doing that, it referred to the way Mr Shaskey was on the ground and the way it said he was aware of events, including the effluent discharges.

[23]     In his sentencing remarks, the Judge said he was taking into account that there were three offenders, but that one, Mr Shaskey, was taking part in a restorative justice system.

[24]     It would thus appear the Judge sentenced the companies on the basis that Mr Shaskey would not be separately fined but that there would be a satisfactory outcome from the restorative justice process, as far as he was concerned.

[25]     On the same day as the two companies were sentenced, the sentencing Judge remanded Mr Shaskey at large to 22 March 2017 “for restorative justice process to be carried out”.   The parties filed a joint memorandum on 28 February 2017. Following the filing of that memorandum, the Court granted a final adjournment of the proceedings against Mr Shaskey to 30 June 2017.

[26]     Counsel for the CRC filed a memorandum dated 23 June 2017 in anticipation of the matter being called on 30 June 2017.  The submission began by saying the matter was to be called “for report as to the status of AEJ (alternative environmental justice  scheme)  and  disposal”.    The  CRC  referred  to  the  earlier  sentencing  of Mairangi and A&H and attached a copy of the sentencing notes.  It referred to the fact Mr Shaskey was a director of A&H.   It referred to the way Mr Shaskey had participated in AEJ and had participated in a conference run by Restorative Justice Services Ōtautahi, the Ministry of Justice provider of restorative justice services in Canterbury.  It said he had failed to do any of the 20 hours’ community work which was part of the agreement that had been reached and said that, as he did not complete the outcomes, the matter was being returned to Court for sentence.

[27]     The CRC referred the Court to the submissions that had been filed in advance of the earlier sentencing and said those submissions should be read contemporaneously with their further memorandum.

[28]     The CRC suggested that in the first instance, the matter should be referred to the earlier sentencing Judge “for a decision whether he deems it necessary that having sentenced the two companies he sentences Mr Shaskey”.   As to that, the prosecutor was neutral.

[29]     The CRC, however, submitted that sentencing should proceed and that Mr Shaskey should be convicted and sentenced.  The CRC indicated it would oppose a discharge without conviction for reasons set out in its submission.  In doing that, it referred to the offending in a general way but also made a submission as to Mr Shaskey’s personal role in the offending.  The CRC said that the issue of quantum arose.   In that context, it said “the prosecutor accepts that the company and its director are entwined.  This is relevant for the purposes of determining penalty”, but said “despite A&H Dairies Ltd sentence, the Court can still take the view that the offending needs to be marked by more than a conviction alone for Mr Shaskey”.

[30]     It gave reasons for that submission, but in the end, submitted that “a small fine of around $5,000 would mark the offending but retain proportionality in relation to the company A&H Dairies Limited”.

[31]     The CRC submitted such an outcome “would ensure that the message goes

out to those in the industry, that they must take their responsibilities seriously”.

[32]     In Hardegger v Southland Regional Council, I said it was appropriate to adopt one global starting point for the offending involving two defendants where they were closely related.6   I also referred to other cases which established the close relationship between the parties and that the impact of the overall penalty could be

recognised by arriving at different starting points for the two related defendants.

6      Hardegger v Southland Regional Council, above n 4.

[33]     I cannot see how the Judge could have found the CRC did not consider this global approach to sentencing when making a submission as to whether and how Mr Shaskey should be sentenced following the breakdown in the agreed AEJ arrangements.   The CRC made sure the Court was aware of the way the two companies had been sentenced.  In the memorandum for the 30 June calling of the matter, it acknowledged that there would be an issue as to whether Mr Shaskey needed to be convicted and, if so, whether and to what extent he should be fined. Both Mairangi and A&H had been fined $29,000 and ordered to pay significant costs.  With the CRC’s suggestion that there should be a fine of around $5,000, there was an acknowledgement that, with the fine imposed on A&H, it would not be appropriate for Mr Shaskey to be fined in the same way.

[34]     In  response  to  that  memorandum  from  the  CRC,  Mr  Shaskey  swore  an affidavit of 30 June 2017, the same day as his sentencing hearing.  In it, he referred to the agreement he had reached with the CRC as to what he would do as an alternative to the CRC pursuing a conviction against him.

[35]     Mr  Shaskey  set  out  what  he  had  done  pursuant  to  the  agreement,  but explained why he had not done the 20 hours’ voluntary work at the Tuhaitara Coastal Park that he was obliged to do as part of the agreement.  He also set out the rather dire financial situation he and his family faced after he had ceased to be involved in the dairy industry the previous year.   He did not file any written application for a discharge  without  conviction.    Mr Shaskey had  not  sought  a  discharge  without conviction  when  counsel  had  filed  submissions  for  both  him  and A&H  on  22

December 2016.

[36]     When the matter was called before a different Judge on 30 June 2017, the CRC did not seek the imposition of a fine but still submitted that it was not a proper case for a discharge without conviction, arguing that the requirements of s 107 of the Sentencing Act were not met.  An oral application was then made by Mr Shaskey’s counsel.  The Judge’s decision records that application was made “by your counsel on my enquiry.”

[37]     The Judge had Mr Shaskey confirm what he had said in affidavits filed both for  the  original  sentencing  and  for  the  appearance  on  30  June.    There  was cross-examination. There were further oral submissions.

[38]     With matters having proceeded in that way, I can see no reasonable basis on which the Judge could conclude the CRC were negligent in the submission it made, initially as to whether there should be conviction and fine and then, after it was advised of Mr Shaskey’s financial position, as to whether there should be a conviction.

[39]     In a judgment of the same day, for the reasons he carefully set out in his sentencing remarks, the Judge  granted a discharge without conviction.   On this appeal, the CRC made no criticism of that decision or the reasons he gave for it.  Nor do I make any such criticism.

[40]     In reaching that decision, the Judge gave Mr Shaskey credit for various steps he had taken under the agreed AEJ arrangement as a way of accepting responsibility for his involvement in what had happened.  He also took into account Mr Shaskey’s explanation for not having completed the community work required of him.

[41]     In his decision granting the discharge, the Judge also indicated he had a preliminary view that the CRC should pay costs under the Act on an indemnity basis. He proposed a timetable for submissions to be filed as to that.

[42]     Counsel for the CRC filed detailed submissions on costs addressing ss 5 and

13(3) of the Act.  Those submissions referred briefly to the breakdown in the AEJ arrangement, the failure of the community work agreement and that resulting in a continuation of the Court proceedings.  A brief submission was filed by a solicitor for the defendant.  It incorrectly began by saying the Court had already ordered the CRC to pay the defendant’s costs on an indemnity basis.  The solicitor set out what he thought the costs would be.

[43]     In his costs decision, the Judge criticised the CRC for the way it sought to explain why it had made the submissions it did as to sentence following the non-

performance of the AEJ agreement by referring to the protocol it had established for a diversion process.  The Judge said that this has been an improper submission to make because it was an attempt to have the Judge revisit the findings he had made when granting a discharge.  The Judge said it was “entirely inappropriate for CRC to invite the Court to revisit findings in the related decision discharging Mr Shaskey without conviction”.  The Judge referred to those findings, including the credit he had given for Mr Shaskey’s voluntary participation in the AEJ process.

[44]     I cannot accept the logic of that criticism.   The CRC had referred to that background, not to argue or criticise the Judge in any way for his decision to grant the discharge or to question the reasons for it, but to explain why the CRC had asked the Court to proceed with sentencing and to explain why, at that time, it had considered it was still appropriate to argue for a conviction.

[45]     I have read the written submissions which were filed for the CRC on the costs issue.  In making his costs decision, the Judge had criticised them for saying in those submissions:

In pursuing the prosecution after the defendant’s failure to complete AEJ, the informant merely followed its own policy.  It is submitted that the informant cannot be criticised for adopting this approach, it being consistent with the policy it has developed in order to provide defendants with alternative environmental justice processes.

[46]     I can see nothing in that comment or elsewhere in the CRC’s submissions on which it could be said that, in its submissions on costs, the CRC were wanting the Judge to revisit findings he made on granting the discharge.

[47]     Mr Lange, for the CRC, also argued the Judge had made an error in making an award in excess of maximum scale costs, on the basis s 13(3) of the Act had been engaged because a situation of “special difficulty” had resulted from the CRC’s negligence.  For reasons already discussed, I do not consider there was a basis for the finding of negligence.   It is apparent, however, from the Judge’s decision that he considered it necessary to order the CRC to pay costs as he did because “considering all the circumstances, [he found] it just and reasonable that CRC contribute towards

the costs of Mr Shaskey’s defence and that this contribution should be in excess of

scale”.

[48]     Mr Shaskey pleaded guilty to the charge brought against him. There was thus evidence sufficient to justify his being charged.  The Judge acknowledged that the CRC had always proceeded with the charge and had acted in good faith.   For the reasons already discussed, I do not consider there was a proper basis on which it could be said it was negligent in making the particular submissions it did, when it did.  A court is not entitled, in terms of the Act, to award costs in excess of scale simply on the basis a judge considers this would be “just and equitable”.

Conclusion

[49]     The end result is that I find the basis on which the judge made his award of costs did take account of irrelevant considerations and was in error. I accordingly allow the appeal.  The order made in the District Court for the CRC to pay costs of

$2,000 is quashed.

[50]     The CRC is to bear its own costs in relation to this appeal.

Solicitors:

Raymond Donnelly & Co., Christchurch

DLA Piper, Auckland.