Fenwick Farms Limited v Waikato Regional Council
[2014] NZHC 2584
•22 October 2014
IN THE HIGH COURT OF NEW ZEALAND AUCKLAND REGISTRY
CRI-2013-404-000330 [2014] NZHC 2584
BETWEEN FENWICK FARMS LIMITED and
ROGER ALEXANDER FENWICK Appellants
AND
WAIKATO REGIONAL COUNCIL Respondent
Hearing: 25 August 2014 Appearances:
R M Hesketh for Appellants
J M O'Sullivan for RespondentJudgment:
22 October 2014
JUDGMENT OF COURTNEY J
This judgment was delivered by Justice Courtney on 22 October 2014 at 3.30 pm
pursuant to R 11.5 of the High Court Rules
Registrar / Deputy Registrar
Date………………………
FENWICK FARMS LTD v WAIKATO REGIONAL COUNCIL [2014] NZHC 2584 [22 October 2014]
Introduction
[1] Fenwick Farms Limited (FFL) pleaded guilty in the Auckland District Court to seven charges under the Resource Management Act 1991 (RMA). These were four charges of discharging dairy effluent into water1 and three of discharging dairy effluent onto land in circumstances where it may enter water.2 Judge Harland imposed a fine of $16,285.70 in respect of each offence. FFL appeals on the ground
that the fines are manifestly excessive as a result of the Judge: (a) Taking too high a starting point;
(b) Giving too small a reduction on account of good character; (c) Failing to give any deduction for remorse; and
(d) Failing to give any deduction for other mitigating factors.
The offending
Construction of new feedpad
[2] FFL owns a 188 hectare dairy farm in Waiuku. Its directors are Mr and Mrs Fenwick, who had previous experience in dairy farming. Mr Fenwick undertook the day-to-day running of the farm.
[3] At the time of the offending the milking herd comprised about 400 cows. Prior to the offending FFL had begun upgrading facilities on the farm and intensifying its milking operation. One of the steps it took was to build a covered concrete feedpad near the milking shed. This facility would require additional effluent management facilities because of the increased load on the effluent system as a result of large volumes of effluent being concentrated into a small area.
[4] The feedpad itself was completed by about August 2012. However, that did not include an appropriate effluent disposal system. Nevertheless, because of the
wetness of the 2012 winter, Mr Fenwick began to use the feedpad in the belief that
1 Resource Management Act 1991, s 15(1)(a): CRNs 065, 067, 069 and 070.
2 Section 15(1)(b): CRNs 062, 063 and 064.
the amount of effluent generated could be contained in the partially completed solids bins at either end of the feedpad.
[5] At the time of the offending, therefore, the effluent management system comprised the “dairy shed” the “feedpad northern end” and the “feedpad southern end”. In the dairy shed the effluent was gravity fed to a concrete sump and automatically pumped to a travelling irrigator which applied the effluent to paddock surfaces. Effluent in the feedpad area was gravity fed to a large sand trap through a concrete sump with effluent solids then scraped into solid bins. The solids were held and the liquid component flowed through a weeping wall system into a small underground sump.
The charges
[6] The effluent system that existed on the farm at the time of the offending was not consented and was therefore subject to the permitted activity rule in the Waikato Regional Plan. Rule 3.5.5.1 permitted the discharged of diary farm effluent onto land in certain circumstances but did not permit the discharge of effluent into water from any holding facility. All effluent treatment or storage facilities were required to be sealed to restrict the seeparge of effluent; effluent was not permitted to enter surface water by way of overland flow or ponding on the land surface.
[7] Waikato Regional Council staff visited the farm on 18 September 2012 following the receipt of a complaint about contaminated water entering a stream in the Waiuku area. The charges arose from what they found on that visit.
[8] CRNs 065, 067, 069 and 070 alleged discharge of effluent into water. CRNs
062, 063 and 064 alleged the discharge of effluent onto land where the contaminant may enter water.
[9] CRN 065 related to the feedpad southern end. In that area effluent was discharged from an underground pipe running along the side of the feedpad which was connected to a hose. The discharge flowed directly into an ephemeral tributary which flowed 600 metres to the boundary of the property entering a wetland.
Although effluent was not actively discharging from the hose when inspected, there were signs that it had recently been discharged through the hose.
[10] CRNs 067, 069 and 070 relate to the feedpad system at the northern end which had also been set up to unlawfully discharge effluent in the same way as the southern end to the same tributary. The charges related to separate discharges on 22 and 23 August 2012 and 16 September 2012. In each case a petrol-powered pump pumped discharge into a hose running to the inlet of the culvert.
[11] CRN 063 related to discharge of effluent from the travelling irrigator. The irrigator had stopped at the end of its run at the top of a steep paddock leaving the paddock surface covered in thick effluent sludge. The irrigator appeared to have been in that position for between one and two days and there was an area of approximately 700 square metres of over-application and ponding. A further smaller area of ponding was found at the base of the hill.
[12] CRN 062 related to another paddock in which an irrigation hose discharging directly onto the paddock at pressure had caused a relatively large hole to be scoured in the land. An area around the hole was showing the effects of increased nitrogen. It appeared that the discharge in this area had occurred over a period of 3-4 days.
[13] CRN 064 related to the discharge from the weeping wall at the feedpad southern end which had overflowed onto land and ponded.
Explanation for the offending
[14] Important information about the offending came from a former employee of FFL, a farm worker, who said that he had been directed by Mr Fenwick to pump effluent from the southern end of the feed pad sump on more than one occasion and that at times Mr Fenwick had assisted by adding water to the sump because the effluent was too thick to pump out. The farm worker was directed to set up the same system at the northern end of the feed pad, directing effluent through the sand trap and discharging it directly to the culvert. The farm worker was worried about doing this and even took video footage and photographs but felt unable to say anything because he was concerned about losing his job.
[15] When the Council staff visited the property on 18 September 2012 they directed Mr Fenwick to cease the unlawful effluent discharges and abatement notices were served on 29 September 2012. A follow-up inspection on 10 October 2012 did not find any ongoing non-compliance. When he was interviewed Mr Fenwick said that he had budgeted $250,000 for the effluent management system but the actual cost was about $400,000.
The starting point
The Judge’s approach
[16] The Judge sentenced on the basis of an agreed summary of facts which set out the nature of the offending in some detail. It also recorded statements given by the farm worker, photographs taken by Council staff when they visited the property and statements made by Mr Fenwick himself when he was interviewed. The agreed summary of facts also touched on the environmental effect; attached to it as appendices were reports by a programme manager for the permitted activity monitoring programme and the investigations programme for the Waikato Regional Council (Mr Dragten) and a water quality scientist with the Waikato Regional Council (Mr Vant).
[17] Although there was no evidence of active discharge into the tributary at the time of the Council’s inspection, the Judge inferred from the information provided in the agreed summary of facts that actual discharges were likely to have occurred, given that 40,000 litres had been pumped from the northern end of the feed pad sump on three separate occasions. That conclusion is not challenged on appeal.
[18] In setting the starting point the Judge treated FFL’s culpability as high, a characterisation that FFL’s then counsel, Mr Lichfield, accepted. The Judge identified “offending over a period of time, as well as systemic and management failures”.3 She noted that FFL had not obtained professional advice from a farm management consultant, the effluent system supporting the feedpad was inadequate
and the feedpad was being used before the effluent system was fully operational.
3 Waikato Regional Council v Fenwick Farms Ltd DC Auckland CRN1057500062, 26 September
2013 at [33].
The Judge identified this as “exactly the kind of behaviour that requires a deterrent approach”.4
[19] The Judge was also critical of FFL’s farm management practices such as failing to move the irrigator to prevent over-application. She considered that Mr Fenwick “appeared unwilling to accept there was a problem or if he did, to treat it with the urgency required”. The Judge was “left with the impression that he was prepared to do what he could get away with”.5
[20] Although the Judge cautioned that those matters had to be weighed against the fact that FFL had acted immediately when the problem was identified, she nevertheless considered that this fact did not reduce its culpability.
[21] Having identified the relevant facts and assessed the level of culpability for the purposes of finding an appropriate starting point, the Judge went on to consider the comparable decisions of Northland Regional Council v Stanaway,6 Southland Regional Council v Talisker Farms Ltd7 and Canterbury Regional Council v White
Gold Ltd.8 She considered that Talisker Farms was the most comparable.
[22] In Talisker the defendant was convicted on five charges of discharging contaminants over a period of about two months. The discharges were made onto land, not water. Although there was a risk of ground water contamination, there was no evidence that effluent actually entered a surface waterway. There were, however, shallow aquifers in the vicinity that eventually discharged ground water into a river. The Judge adopted a starting point of $150,000 for the totality of the offending.
[23] Judge Harland considered that:9
The offending in this case [was] worse than Talisker Farms because there was the actual discharge of effluent to a tributary (albeit an ephemeral one),
4 At [34].
5 At [35].
6 Northland Regional Council v Stanaway DC Whangarei CRN-2011-500-123, 20 February 2012.
7 Southland Regional Council v Talisker Farms Ltd DC Invercargill CRI-2010-25-2498, 17
December 2010.
8 Canterbury Regional Council v White Gold Ltd DC Christchurch CRI-2011-9-4949, 18 June
2012.
9 Fenwick Farms Ltd, above n 3, at [40] – [42].
significant ponding and the use of a feed pad before the effluent system attached to it was fully operational.
She therefore fixed the starting point by reference to Talisker Farms:
I am not persuaded that a starting point for the fine should be $200,000 but neither do I agree that $120,000 adequately reflects the defendant’s culpability, the effect on the environment and the need for general and specific deterrence. I am not persuaded to significant reduce the starting point to take into account the defendant’s submission that to do otherwise would mean that it is unable to install the storage pond this season rather than next. Upon reflection this is a matter that is relevant to the defendant’s ability to pay a fine under s 40 which should be considered at the end of the sentencing process.
For the reasons already expressed, but particularly because the offending was deliberate, showed a real want of care and a disagreed for the effects on the environment, my view is that the starting point for the fine should be
$16,000.
Was the starting point too high?
[24] Mr Hesketh, for FFL, submitted that the Judge erred in characterising the offending in the present case as worse than the offending in Talisker Farms because in that case (1) the dumping charges were continuing offences and the defendant did not clean up despite agreeing to do so, (2) the overflowing pond charge was a continuous offence in January and was still ongoing when the Council inspected again in February and April 2010, and (3) although the offending in Talisker Farms related only to the discharge of contaminants onto land rather than water, the Judge recognised that there was no evidence of discharge into a waterway in the vicinity of shallow aquifers that would eventually discharge ground water into the Mataura River.
[25] In comparison, Mr Hesketh pointed out that FFL’s offending involved discrete discharges into a waterway rather than continuing offences and the offending ceased immediately following the Council’s initial inspection.
[26] I agree with the Judge’s view of Talisker as a comparator for the reasons given by her in sentencing and outlined by the respondent’s counsel, Ms O’Sullivan; (1) there were more offences committed by FFL than by Talisker, (2) four of those offences involved direct and deliberate discharge into a waterway, with evidence of
contaminants in the waterways and (3) all the discharges in the present case involved untreated effluent, whereas three of the five charges in Talisker involved treated pond effluent. It was open to the Judge to take a global starting point that was higher than the starting point taken in Talisker. Further, the starting point of $160,000 taken was not a great deal higher, especially given that it reflected more changes.
Remorse
[27] At sentencing FFL sought a further reduction on the basis that the immediate action taken following the Council’s inspection indicated remorse over and above that provided for within the guilty plea. The Judge rejected that on the basis that the steps that FFL had taken were steps that ought to have been taken in the first place and therefore did not justify a separate reduction for remorse. Mr Hesketh relied on the observation by Andrews J in Northland Regional Council v Roberts:10
[91] The Judge gave Mr Roberts credit for having been cooperative in interviews and discussions, and having actively sought advice from Council officers, for his remorse, and for the “fairly considerable and costly efforts made since the offending in a continuing endeavour to remedy the problems on the land”. However the discount in respect of the last factor had to be limited as those efforts are generally not “necessarily giving rise to a reduction in penalty because it is putting the situation right and as it should have been in the first place.”
[28] Mr Hesketh submitted that not only was Mr Fenwick frank and cooperative with the Council, he acknowledged responsibility for the offending and took steps to comply with the requirements and additional steps in preserving the wetland areas. These actions all showed genuine remorse over and above the acknowledgment of offending through the guilty plea.
[29] Ms O’Sullivan’s response was that, whilst Andrews J had given a discount in Roberts for remorse, she had also noted that such efforts did not necessarily give rise to a reduction in penalty and, in any event, the steps taken by Mr Roberts were well in excess of the relatively minor fencing and replanting undertaken by FFL. Nor did he accept that the frankness and cooperation relied on by FFL existed to the extent
now submitted. The acceptance of responsibility fell within the ambit of the
10 Northland Regional Council v Roberts [2014] NZHC 284 at [91] (footnotes omitted).
discount for guilty plea but Mr Fenwick had sought to minimise his own failings by criticising those who had advised him.
[30] I do not consider that the circumstances were such as to require a discount. It may have been open to the Judge to have made a small additional allowance but it was well within her discretion to decline to do so and there is no error in the course that she took.
Previous good character
[31] The Judge made an allowance of five per cent for Mr Fenwick’s previous good character, noting that FFL had no previous convictions and there had been no previous compliance issues or abatement notices against either it or Mr Fenwick. She regarded the five per cent as appropriate:11
There is no evidence of environmental stewardship to the extent that would require additional recognition by way of mitigation for previous good character. There are two small wetlands on the farm and I was told that these are now fenced and there is some replanting being undertaken. The defendant purchased the farm in 2010 and accepted that the wetlands were there before the purchase. They are being improved but the fencing of them is simply a matter of good management and arguably it is something which is now expected of farmers. The replanting is to be encouraged but is not of sufficient extent to warrant a further deduction, particularly in light of the concession that the wetlands are useful to absorb nutrients in any event, a matter which is of benefit to the defendant.
[32] Although this point was raised in written submissions there were no specific details provided as to why the deduction was inadequate and the point was not elaborated on in oral submissions. In the absence of any other specific material I can see no reason to interfere with the Judge’s assessment of the appropriate discount to allow on this ground.
Result
[33] The appeal is dismissed.
P Courtney J
11 Fenwick Farms Ltd, above n 3, at [47].
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