Ministry for Primary Industries v McConnell

[2023] NZHC 1342

IN THE HIGH COURT OF NEW ZEALAND WHANGAREI REGISTRY

I TE KŌTI MATUA O AOTEAROA WHANGĀREI-TERENGA-PARĀOA ROHE

CRI-2022-488-000087

[2023] NZHC 1342

BETWEEN

MINISTRY FOR PRIMARY INDUSTRIES

Appellant

AND

KEVIN JOHN McCONNELL

Respondent

Hearing:	8 February 2023
Counsel:	B O’Connor and P Leeming for Appellant Respondent in person
Judgment:	31 May 2023

JUDGMENT OF HINTON J

This judgment was delivered by me on 31 May 2023 at 4.00 pm, pursuant to Rule 11.5 of the High Court Rules.

Registrar/Deputy Registrar Date: ………………………….

Solicitors:           Marsden Woods Inskip Smith, Whangarei

MINISTRY FOR PRIMARY INDUSTRIES v McCONNELL [2023] NZHC 1342 [31 May 2023]

[1]                  This is a sentence appeal brought by the Ministry for Primary Industries (the Ministry) under the National Animal Identification and Tracing Act 2012 (NAIT Act).

[2]                  Mr McConnell is a 73-year-old beef farmer based in Mangapai, Northland. He farms about 300 hectares of land and largely breeds his own cattle. He is a fifth- generation farmer in the area and has worked as a farmer for some 58 years.

[3]The two charges under the NAIT Act are:

(a)That between 3 May 2022 and 14 June 2022, Mr McConnell failed to ensure that the animals in his charge were registered according to the NAIT Act.1 (This charge related to eight movements of animals and 117 cattle in total. All movements were from his farm to the meat works.)

(b)That on 30 May 2022, Mr McConnell failed to ensure that animals were registered according to the NAIT Act.2 (This charge related to around 400 cattle, being the total number of cattle on his farm at that date and involving no movement of animals.)

[4]                  Mr McConnell was convicted and sentenced on 14 September 2022 by Judge G L Davis in the Whangarei District Court. 3 He was convicted and discharged with respect to the first charge, and a fine of $500 was imposed in respect of the second charge.

[5]On appeal, the Ministry submits that the sentence was manifestly inadequate.

The NAIT regime

[6]                  The NAIT regime was established to identify and track individual and groups of NAIT animals (that is cattle and deer) from birth to death or live export. Its key purpose is to enhance biosecurity management in New Zealand. Where infectious

1      National Animal Identification and Tracing Act 2012, s 31 and sch 2 cl 15(2)(b).

2      Section 30 and sch 2 cl 15(2)(a).

3      Ministry for Primary Industries v Kevin John McConnell [2022] NZDC 18870.

disease is detected in animal populations, accurate NAIT tracing information is used to manage and contain spread. The system is vital to protecting New Zealand’s export industry as reflected by the increase in maximum penalties for offending under the NAIT Act from $10,000 to $100,000 in 2019, following an outbreak of mycoplasma bovis in 2017. That outbreak showed there was widespread non-compliance with the NAIT system. The increase in maximum penalties indicated a low tolerance for breaches going forward.

[7]                  The Organisation Supporting Primary Industries (OSPRI), through its subsidiary NAIT Limited, is the designated organisation responsible for collection and management of information and data within the digital NAIT system.

[8]                  There are six key obligations under the NAIT Act for individuals or entities wanting to own or manage NAIT animals. The obligations are that:

(a)Individuals in charge of NAIT animals must register as a Person in Charge of NAIT Animals (PICA) with the NAIT organisation.4

(b)A PICA must register every location where that person is in charge of NAIT animals and confirm they are a PICA for the specified location.5

(c)A PICA must ensure that the NAIT animals in their charge are correctly fitted at all times with a NAIT device (Radio Frequency Identification Device or “NAIT tag”) and are registered with the NAIT organisation.6 A PICA must not move NAIT animals from the NAIT location or other location which that PICA controls unless those animals are fitted with a NAIT device and registered.

(d)A PICA must declare every NAIT animal movement on or off their NAIT location to the NAIT organisation within 48 hours after the end of the day that movement occurred.7

4      National Animal Identification and Tracing Act 2012, ss 26 and 27.

5      Section 29.

6      Section 30.

7      Section 31.

(e)A PICA must declare the death, loss, or intended export of NAIT animals.8

(f)A PICA must provide correct and up-to-date information to the NAIT organisation as required by or under the NAIT Act.9

[9]                  As Ms Leeming for the Ministry explained, when animals are moved off a farm, the process involves either:

(a)a “one-legged movement” where cattle are moved from the farm to the meat works or to sale yards for resale; or

(b)a “two-legged movement” where cattle are transported to another farmer directly. Sometimes the movements are more complicated still but that is not relevant for present purposes.

[10]              In the case of a one-legged movement, registration of the movement is handled by the meat works or the sale yards when the animals arrive. Under a two-legged movement, registration of the movement is required both on departure from the holding farm by the PICA and again on arrival at the receiving farm by the receiving PICA.

[11]              The farmer pays for tags and attaches them, but they are not tagged to a particular animal until scanned and thereby registered. There is no cost involved in registering animals or their movements. That is a data exercise only. Obviously, there is time and attention involved.

[12]              There has been, although it should no longer hold true, a widespread misunderstanding among farmers, stock agents and meat processing facilities that where animals are only going to the meat works, there was no need to register them, on the basis that providing they were tagged they would automatically be logged in the NAIT system upon receipt at the works. Many farmers also considered that

8      Section 32.

9      Section 33.

purchasing tags and applying them to their cattle would amount automatically to registration of the animal and its movements. It may be that the system will evolve and simplify in that way.

[13]              It seems that until around 2017 when there was the outbreak of disease, the regime, although it had been in force since 2012, was only loosely policed. As noted above, since the outbreak the fines have significantly increased and enforcement has been stricter.

[14]              The Ministry has set up a helpline where people can call for assistance and register animals manually if they are having difficulty with electronic registration. The Ministry has also undertaken extensive education initiatives over the years.

Background

[15]              Mr McConnell has been registered as a PICA since 2012 and his farmland is registered under the NAIT Act as a NAIT location.

[16]Mr McConnell has also always tagged all of his animals with a locating device.

[17]              He also always completed the animal declaration cards required when animals are moved.

[18]              However, as noted above, once tagged, animals are to be registered with OSPRI and since 2012 Mr McConnell has failed to register a large number of animals born on his farm. No official action was taken by NAIT Ltd until 2019. In May 2019, he received a notice from NAIT Ltd reminding him of his obligations under the NAIT Act. On 16 July 2020, he received a warning letter from the Ministry as a result of moving unregistered NAIT animals from his farm on 17 April 2020.

[19]              Further infringement notices were issued by the Ministry in relation to three groups of unregistered cattle being moved from Mr McConnell’s farm between 5 May 2020 and 10 March 2022. These went unheeded and additional breaches were recorded by the Ministry.

[20]              The current charges were then laid and on 14 September 2022, without having been in touch with the  Ministry  beforehand  and  at  a  first  call  of  the  charges, Mr McConnell appeared before Judge Davis represented by a duty solicitor. He entered guilty pleas in respect of both charges.

[21]              Counsel appearing for the Ministry requested that sentencing be adjourned so that submissions could be filed. Judge Davis decided to proceed and Mr McConnell was thereafter convicted of both charges and ordered, as noted above, to pay the $500 fine in respect of the second charge and discharged in respect of the first charge.

[22]              On 26 October 2022, the Ministry submitted a memorandum to Judge Davis under s 180 of the Criminal Procedure Act 2011. It sought correction in respect of Mr McConnell’s sentencing on the basis that:

(a)the Judge erred in entering convictions for the relevant charges as these were category one offences which do not carry convictions; and

(b)the fine of $500 and discharge were manifestly inadequate for the offending, diverging significantly from sentencing in similar cases.

[23]              Judge Davis acknowledged the convictions were entered in error and set both aside. He declined to alter the fine or discharge saying that a rehearing would not be appropriate as Mr McConnell had not had any opportunity to respond and, as the fine had already been imposed, he did not consider it appropriate to recall under s 180.

The test on appeal

[24]              This appeal is brought pursuant to s 246 of the Criminal Procedure Act 2011 under which a prosecutor may appeal against a sentence proposed for an offence unless the sentence is fixed by law. The Ministry had to obtain, and did obtain, the consent of the Solicitor-General. The appeal is to be determined in line with s 250 which provides that a first appeal court must allow an appeal if satisfied that for any reason there is an error in the sentence imposed on conviction and a different sentence should be imposed.

[25]              While s 250 refers to a conviction, infringement offences are captured as convictions for the purposes of the Criminal Procedure Act, where the Court may order the defendant to pay a fine and costs in respect of that infringement.

[26]              Section 251 outlines the powers given to a first appeal court under s 250, including the ability to set aside a sentence, impose another sentence, or vary the existing sentence. The effect of this approach was clarified in Tutakangahau v R10 where the Court of Appeal held that an appeal court should only intervene where there is a “material error in the sentencing process” which requires correction on appeal.

[27]              As noted by the Court of Appeal in R v Wilson,11 whether a sentence is manifestly inadequate will be determined with reference to the maximum sentence for an offence and any comparable sentences but will ultimately turn on “the totality of the offending and the culpability of the offender in the particular case”.

The arguments on appeal

The Ministry

[28]              The Ministry says there were material errors in the sentencing process. Without the benefit of submissions, Judge Davis imposed a sentence well outside the expected range for similar offending. He had not adopted the required approach of a starting point, uplifts and discounts, and had taken no account of the correct NAIT procedure.

[29]              Further, the Ministry says the fine of $500 for the second charge was manifestly inadequate and that this was compounded by the discharge of the first charge. Given the charges relate to different animals, there is no reason that offending related to one group should be reflected in sentencing but not offending related to the other group.

[30]              The Crown submit that on the basis of the post-2019 District Court cases reflecting the new maximum penalty under the regime, the starting point for the two charges combined should be $40,000.

10     Tutakangahau v R (2014) 27 CRNZ 29.

11     R v Wilson (2004) 21 CRNZ 56.

[31]They accept that discounts for mitigating factors may be applicable.

Mr McConnell

[32]              Mr McConnell had not taken any steps in respect of the appeal but, as happened with the first call of the charges before Judge Davis, he appeared at the hearing. He gave, as did the Crown, very helpful submissions. He explained that he is a sole operator in respect of his holding, which he views as a medium-sized farm. He mostly breeds his own cattle and seldom purchases cattle. As stated above, he has farmed for some 58 years now. He is computer illiterate.

[33]              Mr McConnell said that his animals are bred on the farm and are only ever moved from the farm to the meat works. He is not obligated to register those movements, as noted above, and thought (at least earlier on) that compliance would be achieved when the meat works did so. Mr McConnell says further that he sends a truck to the meat works containing his cattle only, so they do not come into contact with other cattle en route.

[34]              Mr McConnell expressed some frustration with the Ministry and the NAIT system. He says that the Ministry failed to act quickly during the mycoplasma bovis outbreak of 2017, which resulted in widespread loss for farmers. He does not seem to be alone in expressing dissatisfaction with the Ministry and the NAIT system.

[35]              In response to questioning, Mr McConnell addressed various personal circumstances which I address below.

Analysis

Starting point

[36]              The charges are brought under sch 2 cl 15 of the NAIT Act, which is a strict liability offence. For the reasons stated earlier, enforcement of the NAIT Act is important.

[37]              Having reviewed the cases and the legislation, I agree with the Crown that the starting point for sentencing in NAIT cases should be fixed on a global basis with particular reference to:

(a)the number of unregistered animals;

(b)the number of movements;

(c)the places and number of locations to which the animals were moved;

(d)the overall extent of the PICA’s failure to engage in the NAIT scheme;

(e)the biosecurity risk involved; and

(f)efforts to cooperate and comply with NAIT.

[38]              In MPI v Richmond,12 Judge Krebs listed a number of other factors that he considered could be helpful in determining culpability but these related more to the second stage of sentencing, for example, whether any remorse had been demonstrated by the PICA.

[39]              Judge Krebs also said it was relevant to culpability whether the PICA was on notice of registration obligations, but the regime has now been in  effect  for some  11 years, and it has been rigorously applied and advertised for over three years. Notice of registration and other obligations under the NAIT Act must be taken as a given. It would be a rare case where that is not so. Similarly, generic complaints about the Ministry and/or the NAIT system will seldom be relevant at this stage.

[40]              The following list, largely provided by the Crown, sets out a range of post- 2019 District Court cases that reflect the “new” maximum penalty under the regime. The Crown’s list referred only to the starting point, number of charges and number of animals. I have added the number and type of movements, which I consider, and the Crown accepts, is material:

12     MPI v Richmond [2022] NZDC 7697.

(a)MPI v Donaldson - $35,000 starting point for three charges involving a total of 352 animals and three movements (farm to sale yard);

(b)MPI v Bell - $35,000 starting point for two charges involving a total of 362 cattle and 12 movements (farm to works in two locations);

(c)MPI v O’Leary - $52,000 starting point for 13 charges involving a total of 476 cattle and 13 movements (farm to works on eight occasions, others not specified);

(d)MPI v Banicevich - $40,000 starting point for one charge involving no fewer than 500 cattle (several movements captured by a representative charge, where all were farm to works). However, the starting point was reduced to $20,000 for NAIT administration issues; and

(e)MPI v Richmond - $20,000 starting point for one representative charge involving 524 deer (seven movements all farm to works).

[41]              In assessing liability under sch 2 cl 15, the Judges have placed emphasis on different factors.

[42]              In MPI v Banicevich,13 Judge Tomlinson emphasised the total number of unregistered animals as being important to the functioning of the NAIT regime, but acknowledged that where large groups of animals are involved a global approach to sentencing would be more apt. The defendant in Banicevich had failed to register something over 500 animals which was the subject of one representative charge and a starting point of $40,000 was adopted to reflect the risk posed by this large population, but as noted the starting point was reduced in that case. The judgment does not refer to the number of movements involved but it is clear that all movements were just to the meat works.

13     MPI v Banicevich [2021] NZDC 20753.

[43]              In MPI v O’Leary,14 Judge Matheson focused on the total number of movements rather than the number of unregistered animals in determining the severity of offending. In that case, a global starting point of $52,000 was adopted in respect of 13 separate movements by around 476 cattle over a nine-month period. The Judge considered that the number of infringements – for which the defendant was on notice, having received warnings from the Ministry – showed a pattern of non-compliance. In addition, the discrete movements by unregistered animals were considered particularly dangerous in terms of biosecurity, and contrary to the purposes of the NAIT Act.

[44]              In MPI v Richmond,15 Judge Krebs adopted a starting point of $20,000. He noted that Mr Richmond had experienced administration issues with NAIT as had Mr Banicevich. The defendant in that case had failed to register around 524 deer. Seven movements were recorded over a one-month period. While the number of unregistered animals and movements was relatively high, Judge Krebs considered it relevant that those movements were all to one location and that the defendant had accompanied the animals during transit. This, in his estimation, diminished the biosecurity risk posed by the unregistered animals and justified a lower starting point.

[45]              Turning to the present case, on the second charge, while 400 animals are involved, they are all animals that had never moved anywhere. They had been born, tagged and remained on Mr McConnell’s farm. There is nonetheless, quite apart from a clear obligation to register, a risk of animals being up against fences of neighbouring farms or bulls coming onto Mr McConnell’s farm. However, the Ministry accepted that the biosecurity risk would be minimal.

[46]              In terms of the much smaller number of cattle relating to the first charge, those eight movements were all movements solely to the meat works. Mr McConnell was under no obligation to register the movement as that was for the meat works to do. In each case the meat works picked up on non-registration of the cattle when they went to register the movement. As far as is known, in each instance the cattle were not mixed with other animals. There is still a risk in those cases because disease can be

14     MPI v O’Leary [2022] NZDC 3868.

15     MPI v Richmond [2022] NZDC 7697.

spread where the same truck is subsequently used by other farmers to transport their animals, but again the risk is low.

[47]The key factors here are therefore:

(a)Mr McConnell’s wholesale non-compliance with the registration of his cattle, albeit that he had tagged them all and otherwise met the requirements of the NAIT Act.

(b)The total number of cattle involved, which is in the top bracket of the cases noted above.

(c)The movements being one-legged only.

(d)A relatively low biosecurity risk.

[48]              I note further that Mr McConnell was on notice of his offending, having received a warning letter and six infringement fines prior to being charged. It is reasonable to expect that he should have taken steps to complete registration or reach out to NAIT for further information on how to fulfil his obligations if he was unsure.

[49]              I assess Mr McConnell’s level of culpability as moderate, particularly because of the relatively low risk to biosecurity.

[50]              In my view, the offending here is somewhat akin to that in MPI v Richmond. There is a similar number of animals and movements, and low biosecurity risk. In Richmond there was no charge laid for non-registration of deer remaining on the farm but it seems highly likely those deer were also not registered. Materially, there was a level of cooperation on the part of Mr Richmond which has not applied here and Judge Krebs considered there had been failures on the part of NAIT, which is not the case here.

[51]              Having  regard  to  all  the  above,  I  would   set   the  starting  point   for   Mr McConnell’s sentence for the two charges at $30,000. I consider that to be broadly in line with the previous District Court cases. If the movements had been more

complex and the risk higher, I would agree with the Ministry that, given the number of animals involved and the level of non-compliance, a starting point of $40,000 would have been more appropriate.

Personal circumstances

[52]              There are no personal aggravating factors. I have taken the level of prior notice and infringements into account in setting the starting point.

[53]              In terms of mitigating factors, Mr McConnell is entitled to a 25 per cent discount for his guilty pleas. It should be noted, as Judge Davis did in his initial sentencing, that Mr McConnell acted quickly in responding to the charges. Also, it is through no fault of his that the matter had to be taken on appeal. Arguably, given the nature of the charges under the NAIT Act, counsel for the Ministry should be ready to proceed at the first call. In this case they were relying on Crown Law – that should not be necessary now.

[54]              The Ministry accepts that Mr McConnell can receive a discrete further discount of 5 to 10 per cent for the steps taken by him to attend Court and have the first appearance date brought forward for the entry of plea. I allow a discount of 5 per cent in this regard.

[55]              There is no question as to Mr McConnell’s general good character. He has no previous convictions and his only issue is with regard to the NAIT breaches. However, I cannot allow for a discount given the number of warnings and notices Mr McConnell received in relation to the regime. I agree with Judge Krebs in Richmond that, unfortunately, a discount is not available in these circumstances.

[56]              Mr McConnell is 73 years old and manages the farm on his own. For the last three years he has also been a full-time carer for his partner who had a stroke and cannot talk. He is working day and night. He has no children or staff to support him. He is completely unfamiliar with computer systems and does not have a mobile phone, let alone a computer. He relies on a relative who lives nearby when he needs to access the internet. He was for some time, as it seems other farmers facing NAIT charges have been, uncertain about the functioning of the NAIT system, in particular in terms

of how and when registration takes place. It is understandable for an older person in Mr McConnell’s situation that he would have been confused and perhaps a bit overwhelmed by the system. I consider a discount of 20 per cent is applicable for  Mr McConnell’s significant personal difficulties.

[57]              I also note that Mr McConnell says he is in a position to pay a fine but says that he is making virtually no profit out of farming now and he sees no future in it for a purchaser. I take it therefore that any fine would have to come out of capital.

[58]These discounts amount to a 50 per cent reduction on the starting point of

$30,000, leaving a consequential fine of $15,000.

Result

[59]              There is no question but that the sentences imposed were manifestly inadequate.

[60]              The fine and the discharge are both set aside. Mr McConnell is ordered to pay a total fine of $15,000 in respect of the two charges.

Postscript

[61]              Farmers in Mr McConnell’s position must avail themselves of the Ministry’s NAIT helpline and if they have difficulty in doing so, record their attempts. A warranted NAIT officer, Mr Solomon, attended the hearing before me and was helpful and constructive, as were counsel.  Mr  Solomon  was  to  remain  in  liaison  with Mr McConnell.

Hinton J