Juken Nissho Limited v Northland Regional Council
[2000] NZCA 49
•15 May 2000
| IN THE COURT OF APPEAL OF NEW ZEALAND | CA 68/00 |
JUKEN NISSHO LIMITED
V
NORTHLAND REGIONAL COUNCIL
| Hearing: | 2 May 2000 |
| Coram: | Richardson P Gault J Thomas J |
| Appearances: | M L S Cooper and D H McLellan for Appellant R M Bell for Respondent |
| Judgment: | 15 May 2000 |
| JUDGMENT OF THE COURT DELIVERED BY RICHARDSON P |
Pursuant to leave granted by the High Court under s144 of the Summary Proceedings Act 1957, Juken Nissho Limited ("JNL") appeals to this court against the determination of the High Court on two questions of law arising on JNL's unsuccessful appeal to the High Court against two convictions entered in the District Court for offences under the Resource Management Act 1991. The judgment of Salmon J in that appeal is now reported at [2000] NZRMA 182.
JNL operates a plant in Kaitaia which manufactures a tri‑board product. In the course of the manufacturing process, aldehyde gases are generated. JNL was granted a resource consent by the Northland Regional Council ("NRC"), which permits the discharge of contaminants, including aldehyde gases, subject to certain conditions. These conditions include restrictions on the total quantity of aldehydes that may be emitted into the atmosphere.
The first charge against JNL was:
That between the 14th day of January 1997 and the 16th day of January 1997 Juken Nissho Limited did commit an offence against section 338(1)(a) of the Resource Management Act 1991 in that contrary to section 15(1)(c) of that Act it did discharge contaminants, aldehydes, into air from its factory at Whangatane Drive, Kaitaia, when the discharge was not expressly allowed by a rule of a regional plan, a resource consent or regulations, the discharge being in breach of condition 2 (as to emission concentration) and condition 3 (as to emission mass) of the air discharge air permit AIR 0014 granted by the Northland Regional Council.
The second charge was identical but related to the period between 15 and 18 April 1997.
The first question of law concerns the admissibility of evidence. It is whether two reports prepared by Air Research Management ("ARM") for JNL and submitted to the NRC pursuant to a reporting requirement in JNL's resource consent were admissible as proof of their contents in circumstances where the author of the reports was not called as a witness and JNL had no personal knowledge of the accuracy of the reports.
The second question concerns the burden of proof. It is whether s67(8) of the Summary Proceedings Act applied to s15(1)(c) of the Resource Management Act and that consequently, once the prosecution had proved that there was a discharge of a contaminant from the factory into the air, it was for JNL to prove on the balance of probabilities that it had not breached the conditions of its resource consent.
Admissibility of evidence
Section 108(3) and (4) of the Resource Management Act provide:
(3)A consent authority may include as a condition of a resource consent a requirement that the holder of a resource consent supply to the consent authority information relating to the exercise of the resource consent.
(4)Without limiting subsection (3), a condition made under that subsection may require the holder of the resource consent to do one or more of the following:
(a) To make and record measurements:
(b) To take and supply samples:
(c) To carry out analyses, surveys, investigations, inspections, or other specified tests:
(d) To carry out measurements, samples, analyses, surveys, investigations, inspections, or other specified tests in a specified manner:
(e) To provide information to the consent authority at a specified time or times:
(f) To provide information to the consent authority in a specified manner:
(g) To comply with the condition at the holder of the resource consent's expense.
Condition 7 of the relevant resource consent imposes an obligation on JNL to test at least monthly all vents emitting aldehydes and to submit the results of the testing to the NRC:
7. The Consent Holder shall for the period of this consent, at not greater than monthly intervals, test all vents emitting aldehydes for formaldehyde and total aldehydes. During the commissioning of the extensions to the mill, this testing shall occur on a weekly basis for a minimum period of four weeks in order to accurately determine the quantities of contaminants being emitted. The first round of testing shall occur within 7 days of the starting of operation of the extensions to the mill. The results of this testing shall be presented to the Council at the end of each week during the commissioning period and at the end of each month thereafter for the immediately previous testing period. All testing results shall include a record of the production rate of the plant being tested during the testing period compared to the maximum production rate of the plant.
As JNL apparently did not have the in‑house capability to conduct the required testing, it employed the consultancy firm, ARM, to do so. Evidence for the prosecution as to contaminant discharges of the relevant nature charged having occurred on the relevant dates, consisted of expert reports compiled by ARM, and letters from JNL, forwarding the reports to the NRC as required under the terms of the consent.
JNL's letter of 10 February 1997 to the Air Quality Officer of the NRC enclosing the emission results report for January 1997 noted that "the results exceed the allowable limits of our consent"; that there were a number of factors relating to the results that JNL wished to discuss with the NRC; and that JNL's comments would be forwarded in the very near future for the council's consideration.
The follow‑up letter of 14 February began:
On the 10th February 1997 I sent to you a copy of the emission test results for January. You would have noted the total of the stack emissions exceed that allowed under our discharge consent. Putting aside the question of tolerances these are the highest results ever reported using the DNPH test method.
I feel these results require some explanation and I offer the following comments for your consideration. ...
The ensuing discussion clearly accepted that the test results were correct and commented on possible explanations for that "unacceptable result in January".
Similarly, JNL's letter of 8 May 1997 commenting on the monitoring results for April, which JNL had submitted to the NRC, advised that "We cannot provide an immediate explanation as to why the results are so high" and noted that a number of considerations were being worked through and that ARM would be on site on 13 May to carry out regular monthly testing.
Admissibility of evidence: Salmon J's determination
Salmon J saw the real issue as being whether JNL had adopted the reports of ARM as its own (judgment, para [17]). The Judge concluded that the statutory and consent framework and the actions of the appellant in employing ARM disclosed an intention to rely upon the ARM reports as their own despite the appellant's lack of personal knowledge of the matters addressed by ARM. In doing so he relied on the approach of the High Court of Australia in Lustre Hosiery Ltd v York (1935) 54 CLR 134, 143:
... that words or conduct amount to an admission receivable in evidence against the party if they disclose an intention to affirm or acknowledge the existence of a fact whatever be the party's source of information or belief ... although the meaning of his words or conduct may depend upon the state of his knowledge, once that meaning appears and an intention is disclosed to assert or acknowledge the state of facts, its admissibility in evidence as an admission is independent of the party's actual knowledge of the true facts.
Admissibility of evidence: discussion
Mr Cooper for the appellant accepted that an in‑house report sent on to the NRC would have been admissible but distinguished that from the present case on the ground that in the former case the "confessing" party has perceived knowledge of the statements of fact but in the latter it does not. He submitted that the mere action of presenting another person's report did not amount to adoption as a recognised exception against the admissibility of hearsay evidence because JNL had no knowledge of the accuracy of the reports and there were no words or facts disclosing personal knowledge by JNL of the facts stated in the reports or establishing a voluntary and informed acceptance of those facts on its part.
We are satisfied that there is no substance to the challenge to the admissibility of the reports and, as with any admission, it was for the appellant to seek to rebut the information contained in the reports if it wished to do so.
The broad principle on which the recognised exception to the hearsay rule rests was discussed in R v Duffy [1979] 2 NZLR 432 and was expressed in R v Mitchell (1892) 17 Cox CC 503, 508 and approved in Parkes v The Queen [1976] 3 All ER 380, 383 in this way:
Now the whole admissibility of statements of this kind rests upon the consideration that if a charge is made against a person in that person's presence it is reasonable to expect that he or she will immediately deny it, and that the absence of such a denial is some evidence of an admission on the part of the person charged, and of the truth of the charge. Undoubtedly, when persons are speaking on even terms, and a charge is made, and the person charged says nothing, and expresses no indignation, and does nothing to repel the charge, that is some evidence to show that he admits the charge to be true.
The self‑monitoring system set up under the resource consent provisions of the Resource Management Act relies on honest reporting by the holder of the resource consent to the relevant authority. The information necessary to fulfil these reporting requirements may be obtained by the consent holder either through the work of its own expert employees, or through the services of experts employed for the purpose. One function of the reporting is to permit the relevant authority to detect and correct breaches of the terms of the resource consent. In order to allow the self‑monitoring system to operate successfully, it is necessary that both parties, the consent holder and the relevant authority, have some degree of faith in the accuracy of the reports. In sending the ARM reports to the NRC in fulfilment of its obligations under the resource consent, JNL acknowledged the content of the reports.
If JNL was questioning whether a breach of the resource consent had occurred, it could have been expected to have done so when submitting the report of the test results. On the contrary, their letters to the NRC proceeded on the footing that those results were correct. In putting forward the reports in this way as its own means of fulfilling its reporting obligations, JNL must be taken to be asserting, or acknowledging, the probable existence of the facts contained in the reports.
The onus of proof issue
The issue here is whether s67(8) of the Summary Proceedings Act applies to s15(1)(c) of the Resource Management Act 1991 so as to place the burden of proof on the defendant to show that on the balance of probabilities the contaminant discharges occurred lawfully, that is to say in accordance with the defendant's resource consent. The appellant's submission is that once the prosecution has proved that a discharge of contaminant occurred on the days charged, and once the defendant has proved that the activity proscribed under s15 (the discharge) was permitted under the resource consent, the legal burden should fall back on the prosecution to prove beyond reasonable doubt that the authority to carry out the activity (the consent) was negatived by a breach of the conditions of the consent.
Section 67(8) of the Summary Proceedings Act provides:
Any exception, exemption, proviso, excuse, or qualification, whether it does or does not accompany the description of the offence in the enactment creating the offence, may be proved by the defendant, but, subject to the provisions of section 17 of this Act, need not be negatived in the information, and, whether or not it is so negatived, no proof in relation to the matter shall be required on the part of the informant.
Section 15(1) and (2) of the Resource Management Act provides:
(1)No person may discharge any--
(a) Contaminant or water into water; or
(b) Contaminant onto or into land in circumstances which may result in that contaminant (or any other contaminant emanating as a result of natural processes from that contaminant) entering water; or
(c) Contaminant from any industrial or trade premises into air; or
(d) Contaminant from any industrial or trade premises onto or into land--
unless the discharge is expressly allowed by a rule in a regional plan and in any relevant proposed regional plan, a resource consent, or regulations.
(2)No person may discharge any contaminant into the air, or into or onto land, from--
(a) Any place; or
(b) Any other source, whether moveable or not,--
in a manner that contravenes a rule in a regional plan or proposed regional plan unless the discharge is expressly allowed by a resource consent, or regulations, or allowed by section 20 (certain existing lawful activities allowed).
The onus of proof: the High Court decision
As a matter of construction, Salmon J concluded that the provision in s15(1) "unless the discharge is expressly allowed by ... a resource consent ... " is not part of the description of the offence but is an exception or proviso which falls within the ambit of s67(8) of the Summary Proceedings Act.
In Bay of Plenty Regional Council v Bay Milk Products Ltd [1996] 3 NZLR 120 Thorp J had held that s15(1) came squarely within the language of s67(8). Following discussion of authorities, including R v Rangi [1992] 1 NZLR 385 (CA) and R v Hunt [1987] AC 352 and the seminal study by Sir Francis Adams in his monograph, "Criminal Onus and Exculpations: or, Provisoes and Exceptions in the Criminal Law", Thorp J concluded at 125:
It follows that in the summary jurisdiction the first task of a Judge seeking to determine whether s67(8) applies to a particular provision must be, as in all cases of statutory interpretation, to determine whether that provision plainly comes within the ordinary significance of the words "exception, exemption, proviso, excuse or qualification". It is only if that "linguistic interpretation" leaves the issue in doubt that the Court will need, in terms of R v Rangi at p388:
" ... to have regard to the orthodox considerations recognised in Hunt and Nimmo, because the intention is not plain on its face."
In short, it is only when the words of the statute are unclear that it will be necessary to turn to orthodox considerations such as those recognised in R v Hunt [1987] 1 AC 352 and Nimmo v Alexander Cowan & Sons Ltd [1968] AC 107. These include determining the intention of Parliament by examining the mischief at which the Act was aimed, and practical considerations affecting the burden of proof, in particular, the ease or difficulty that the respective parties would encounter in discharging the burden of proof.
As had Thorp J in Bay Milk, Salmon J considered that it was not necessary to go further than the plain meaning or linguistic approach. He continued:
The proviso in s1 "unless the discharge is expressly allowed by ... a resource consent ... " is not part of the description of the offence, but is an exception or proviso which falls within the ambit of s67(8) of the Summary Proceedings Act.
In Sir Francis Adams' 1968 monograph, Criminal Onus and Exculpations: or, Provisoes and Exceptions in the Criminal Law (Sweet & Maxwell) the word "unless" is considered as a typical example indicating a proviso covered by s67(8). In relation to the section Sir Francis says:
It seems therefore to be enough that there should be a statutory command or prohibition coupled with or having embodied therein a ground of "possible excuse".
That is precisely the case with s15(1). There is a statutory prohibition coupled with a possible excuse.
Section 15(1), he said, is an obvious case where an act is prohibited unless it has the licence or permission of specified authorities. There was nothing onerous in placing upon the defendant the onus of establishing that the discharge in question was allowed by its own resource consent. It after all has the obligation to monitor that resource consent and must be in the best position of all (using outside experts if necessary) to determine whether or not it is complying with the terms of its consent. Finally, he agreed with Thorp J and with Thorp J's reasons that if it were necessary to have resort to "orthodox considerations", the same result would be achieved.
The onus of proof: the rival contentions
Mr Cooper for JNL accepted that s25(c) of the New Zealand Bill of Rights Act 1990 could not negative the effect of s67(8), which in appropriate cases places at least an evidential burden on the defendant. His submission, as in the High Court, was that s15(1) is descriptive of the essential ingredients of the offence and should be interpreted as describing the essential ingredients of the entire offence, rather than as a list of prohibitions accompanied by possible exceptions or excuses. He submitted that:
In this case, the proscribed activity was the discharge of contaminants, and that activity was permitted by the consent held by JNL. If a local authority wishes to go further and allege that although the discharge of a particular kind of contaminant is permitted the conditions of the consent were breached, this will be for the prosecution to prove, and s67(8) does not save it from that burden.
This interpretation is consistent with the context and purpose of the Act. The Act is at the same time prohibitive and permissive; and to separate these two concepts into "the offence" and the "exception" is unnatural and strained.
Further, and referring to "orthodox considerations", he submitted that if the burden of proof is on defendants who hold conditional consents it would be unduly onerous to require them to prove compliance with the terms or their resource consents on a particular day, whereas the local authority issuing a consent can effectively control how the consent holder exercises the consent. The local authority has the ability through s108 of the Resource Management Act to require surrender of inculpatory information and has wide powers under the Act of entry, testing, etc, not to mention more orthodox prosecutorial powers of search and seizure.
Mr Bell for the NRC submitted that in both ss15(1) and 15(2) "unless" operates as a proviso. That qualification raises issues which are clearly severable from the issues raised in the earlier part of the subsection. He noted that Part III of the Resource Management Act indicates two forms of duties: (1) where certain activities are prima facie prohibited per se, but there are provisos where the activities are expressly allowed by rule, resource consent or regulations, e.g. s15(1) - and ss 9(2), 11(1), 12(1) and (2), 13(1), 14(1), 15A(1) and (2), 15B(1) and (2) and 15C(1); and (2) where activities are prohibited if in contravention of a rule in a relevant plan but there are provisos as to express allowance by resource consent or as to existing use, e.g. s15(1) - and ss9(1), 9(3), 13(2) and 14(2).
He submitted that the different formulation of duties reflects recognition by Parliament that activities within the first class will generally have environmental effects. They can be carried out only on express allowance by rules and resource consents, regulations.
Activities within the second class of duties are prima facie permitted. Instead, they are caught only if rules are made prohibiting or controlling those activities. The making of rules will identify the particular activities which are considered to have environmental significance. See ss68(3) and 76(3) of the Resource Management Act for the requirement to consider effects on environment when rules are made.
When a person carries out an activity which is prima facie prohibited under the first class of duty, or is in breach of a rule, so as to trigger prohibition in the second class of duty, then the activity is one which is prima facie prohibited, as being one that may have environmental significance. It is appropriate to require the prosecution to establish that the defendant has breached the relevant duty, whether it is in the first or second class.
The provisos to the duty provisions allow matters to be raised which will go to show a reduced probability of adverse environmental effect (such as compliance with a rule, resource consent or regulation). These "unless" provisions are matters that a defendant can best answer. That is consistent with s67(8) that the person carrying on the activity which is prima facie prohibited establish that its activity is in fact within the terms of a proviso.
And, Mr Bell submitted, monitoring conditions as expressly allowed for under s108(3) and (4) are consistent with a requirement on a consent holder to demonstrate that its exercise of the consent complies with consent conditions.
Onus of proof: conclusions
We are satisfied that Mr Bell's analysis of the statutory provisions is to be preferred. On a natural reading of s15(1), the final phrase beginning "unless" is intended as a qualification to what has gone before, providing an exception or excuse. The contrast between s15(1) and s15(2), reflective of the different classes of duty, brings home the important point that in both situations the description of the offence is complete before the qualification in each case comes into play.
Under the self‑reporting regime under the Resource Management Act, it is for the consent holder to gather and relay the information constituting the evidence of a breach of the consent. Section 15(1) generally prohibits the discharge of contaminants into the environment and lists the prohibited means of contamination, but provides an exception: "unless the discharge is expressly allowed by ... a resource consent ... ". Compliance with the express terms of the exception is monitored by way of reports sent by the consent holder to the relevant authority describing whether or not the levels of contaminant emitted fall within or outside of the levels specified in the consent. The consent holder thus has control over the collection and reporting of information evidencing a breach of the terms of the exception to the general prohibition. It cannot be said to be unduly onerous to place upon the person charged the burden of proving, on the balance of probabilities, that it came within the terms of the exception to the prohibition against contamination contained in the subsection.
Result
For the reasons given we are satisfied that Salmon J did not err in his determination of the two questions of law for our consideration under s144. The appeal is accordingly dismissed. If any questions of costs arise counsel may submit memoranda.
Solicitors
Jones Fee, Auckland, for appellant
Webb Ross Johnson, Whangarei, for respondent
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