Otago Regional Council v Paterson Pitts Partners (Wanaka) Limited HC Dunedin CRI 2010-412-4

[2010] NZHC 1445

IN THE HIGH COURT OF NEW ZEALAND DUNEDIN REGISTRY

CRI 2010-412-000004

OTAGO REGIONAL COUNCIL

Appellant

v

PATERSON PITTS PARTNERS (WANAKA) LIMITED

Respondent

Hearing:         26 July 2010

Counsel:         A J Logan for Appellant

C P Thomsen for Respondent

Judgment:      29 July 2010

JUDGMENT OF FOGARTY J

Introduction

[1]      This is an appeal by way of case stated from the District Court (Environment Judge B P Dwyer) where he dismissed two informations laid by the Otago Regional Council (ORC) against the appellant, Paterson Pitts Partners (Wanaka) Limited (PPPL)   alleging that it had diverted ground water by means of a bore when not allowed by s 14(3) of the Resource Management Act 1991 (RMA) or alternatively

took ground water similarly in breach of s 14(3).

OTAGO REGIONAL COUNCIL  V PATERSON PITTS PARTNERS (WANAKA) LIMITED HC DUN CRI

2010-412-000004  29 July 2010

Background

[2]      The water concerned was coming from an underground aquifer known as the Wanaka Basin Cardrona Gravel Aquifer.   The aquifer had been accidentally intercepted in the course of an engineering investigation of a site above the aquifer in order to determine the bearing conditions for a proposed building.  That engineering investigation and the accidental interception was not by PPPL.

[3]      As a result of the accidental interception ground water rose rapidly in the test pit, which was some metres deep, and overflowed onto neighbouring properties.  A senior geotechnical engineer, Dr G Salt’s initial advice was to backfill the pit.  But this did not contain the pressurised water.   The next attempt was to place an upstand pipe in the pit to reduce water pressure in the hole and the hole was backfilled again, but seepage continued.  The next attempt to control the escape of the water was to re-excavate the test pit, and install a PVC pipe half a metre in diameter vertically in the hole to a depth of 3.2 metres below ground level.   The pipe protruded approximately 2 metres or so above ground level (total length 5 metres or so).  The bottom section of the pipe was perforated to allow the intake of artesian water at the bottom of the excavation.   The excavation hole was then sealed with the vertical PVC pipe in place.   Layers of pea gravel, concrete, bentonite (a clay sealer) and gravel were put in the hole to hold the pipe in place and to seal the hole.  During this process ground water was pumped out to enable the concrete to set after which the pumping was discontinued.  The plan was that sealing the pit in this manner would resolve the seepage problems caused by the initial accidental excavation into the aquifer.

[4]      This last work was undertaken pursuant to two RMA consents.  One was a land use consent taking advantage of a controlled activity in the regional plan for the management of bore heads and maintenance of bores, r 4.1.1.1(c).   The other was a water permit.   The water was taken to a stream called Bullock Creek, which is a stream naturally drawing water from the aquifer in question.

[5]      This solution also failed.  There were still problems with seepage of ground water.  Dr Salt was consulted again.  This time he recommended that a valve and

flow meter be installed to take water from the PVC pipe thus reducing the head or pressure in the sealed pipe, thereby alleviating the pressure building up in the underground aquifer, and so bringing the seepage to an end.  He recommended that this seepage could be brought to an end with the flows taken from the pipe being limited to 0.3 litres per second, no more than 30,000 litres per day.   Under the regional plan the taking of ground water was a permitted activity where the take for rate is no greater than 2.5 litres per second and the volume no greater than 30,000 litres per day (r 12.2.2.2(c)(x)).

[6]      The Council agreed.  This refinement of the solution was put in place.  This work was done by the contractors on 18 April 2008.  By now this was little over a year after the accidental interception of the aquifer.  The work on the solution was at this stage being supervised by PPPL, for the owner of the site.

[7]      After the work was done PPPL employed a survey technician to regularly read the meter and check the level of water in the PVC pipe.  The meter was also being read, unknown to PPPL, by a neighbour, being one of a number of persons in dispute with the owner of the site over the development proposed on the site.   A complaint was made to the Council.   The upshot was it turned out that the PPPL figures indicated that over the period between 18 April and 9 May between 46,000-

48,000 litres per day approximately went through the meter.

[8]      Part of the defence of PPPL before the District Court was that there had been sabotage of either the flow meter or of the tap.  The technician taking the records, Mr Kennerley, said that he observed that someone else had been to the site because the meter cover had been left open and there were footprints in the soft soil around the standpipe in an area that he had not been walking in.  He gave evidence that as part  of  his  job  he  had  a  target  figure  of  30,000  litres  per  day.    His  superior, Mr Patterson advised that Mr Kennerley had reported to him that there appeared to be anomalies in the flow and each time he set it to try to achieve 30 cubic metres it seemed to be giving funny results.  He reported that Mr Kennerley was of the view that the meter may have been tampered with.

[9]      Initially the Council issued infringement notices and then when these were challenged it brought these prosecutions.

The District Court decision

[10]     The definition of water in the RMA provides:

Water -

(a)       Means water in all its physical forms whether flowing or not and whether over or under the ground:

(b)       Includes fresh water, coastal water, and geothermal water:

(c)       Does not include water in any form while in any pipe, tank, or cistern:

(Emphasis added to (c))

[11]     The Judge reasoned:

[42]      I have previously referred to the definition of water contained in RMA and in the Regional Plan.   As I have noted, in both cases, the term water is deemed not to ... include water in any form while in any pipe, tank, or cistern.  There is no dispute that the tap through which PPL drew water was attached to the large PVC upstand pipe which had been put in place in TP1 and removed water from that PVC pipe.

[43]      PPL contended that the point of take or diversion of the water was the point at which the tap connected to the PVC pipe and that the water which it removed at that point was deemed not to be water for the purposes of RMA or the Regional Plan because it was in a pipe at the point of its removal.

[44]      The Council’s response to that proposition was that the point of take by PPL was not the point at which it had connected the tape to the PVC pipe (just at or above ground level) but rather was the point at which the PVC pipe intercepted the groundwater some 3.2 metres below the ground surface. The Council contended that the PVC pipe intercepted the aquifer where groundwater was contained.  Perforations in the pipe enabled groundwater to enter the pipe.  As the tap was opened allowing water to flow out of the PVC pipe, fresh groundwater was drawn into the PVC pipe replacing that which flowed out of the tap.  The point of take was accordingly the point at which the PVC pipe intercepted the aquifer and that the pipe thereafter merely acted as a conduit for the intercepted groundwater which flowed out of the tap.

[45]     It will be evident from the above that the vital point in determining whether or not water has been taken or diverted is fixing the point of take.  If (as PPL contends) the point of take is the point at which the tap is screwed

into the PVC pipe, then the water is taken or diverted from the pipe and is deemed not to be water for the purposes of RMA or the Regional Plan.  If on the other hand the point of take is the point at which the PVC pipe intercepts the groundwater in the aquifer so that the pipe thereafter simply acts as a conduit of that groundwater to the tap (as the Council contends), then there is a take or diversion of water at the point of interception with the aquifer.

[46]      I consider that the position of the point of take is a question of fact to be determined on the basis of the evidence before the Court.   In order to determine which of the two propositions as to the point of take is correct it is necessary to give consideration to the evidence of Dr Salt for PPL.

[47]     In Paragraph 2.11 of his evidence Dr Salt had explained that he recommended that a valve or tap be put on to the PVC pipe in order to control the ongoing seepages of groundwater which were still being experienced at TP1.   He elaborated on that in cross examination and in response to questions from the Court.

[48]     Dr Salt explained that there was a head of water in the PVC pipe about 1 metre above ground level.  This transmitted pressure back into the water below in the aquifer.  That pressure in turn created an upward pressure on the aquifer water which led to it seeping upwards through or around the material which Tonkin and Taylor had used to try and seal TP1.  It was Dr Salt’s view that this seepage could be avoided by reducing the head of water in  the  PVC  pipe  and  hence  the  pressure  on  the  groundwater  below. Dr Rekker acknowledged that reducing the level of head would have the effect of depressurising the aquifer as Dr Salt contended.

[49]     Dr Salt calculated that in order to achieve the reduction in pressure which he sought it was necessary to reduce the head of water in the PVC pipe to about 300 mm above ground level as opposed to its previous level of

1 metre above ground level.  He further calculated that in order to achieve that it was necessary to drain about 30,000 litres of water per day from the

PVC pipe.

[50]      Coincidentally the 30,000 litres equated to the maximum permissible take of water allowable without a water permit under the Regional Plan. Dr Salt felt that he had achieved a solution which both achieved what he wanted in terms of depressurisation of the aquifer and complied with what he understood the Regional Plan requirements to be.   He did not turn his mind to the question before the Court as to whether or not a water permit was needed for the take from the PVC pipe at all.

[51]      It was these calculations on Dr Salt’s part which led to installation of the tap and meter by PPL and their resultant prosecution.  What Dr Salt’s evidence establishes conclusively is that the tap was put in place to remove water from the PVC pipe thereby reducing the head of water contained within it. The tap was placed where it was to achieve that purpose.

[52]      I accept that a consequence of water being taken from the pipe by the  tap  is  that  replacement  water  would  flow into the  pipe  through  the perforations at the bottom, hence Mr Logan’s submission that the point of take is where the PVC pipe intercepts the aquifer.   I disagree with that contention.  The take at that point is not a take occasioned by PPL but by the installation of the PVC pipe in the first place by Tonkin and Taylor or

Golfside to bring groundwater into the pipe.  At that point the groundwater ceases to be water for the purposes of RMA.   Placement of the pipe was authorised by resource consent.

[53]     The tap was put in place where it was for the specific purpose of reducing the head of water already in the PVC pipe and accordingly,  I consider that the point of take by PPL is the point at which it attached the tap to the PVC pipe.  The water which it took or diverted at that point was not water and accordingly there was no take or diversion of water at that point. This was not a case where the PVC pipe was being used as a conduit to access groundwater by PPL but one where PPL was required to control the level of water already in a pipe.

[54]      For these reasons I find that there was no take or diversion of water by PPL and I dismiss the charges against it.

The case stated

1.Was the purpose for which the tap was fitted by the defendant to the bore (which I found to be to reduce the head in the bore) relevant in determining where water was diverted or taken for the purposes of Section 14 of the Resource Management Act?

2.Did the defendant take or divert water from the aquifer in terms of Section 14(1) of the Resource Management Act because the opening of the tap by the defendant caused water to flow from the aquifer into the bore through perforations at its base?

3.Was the finding that water was taken or diverted from the bore, and not from the aquifer into which the bore protruded, a conclusion properly open to me on the evidence?

The relevance of the purpose for which the tap was fitted

[12]     Mr Logan for the appellant submitted that the first question was drawn to capture the reasoning in paragraphs [51] and [53] of the decision.  He submitted that as contravention of s 14 is an offence of strict liability, s 341(1), it is immaterial whether the respondent intended to commit an offence.  That being so the enquiry is an entirely objective one as to whether or not there was a taking or diversion by the

respondent of groundwater by means of a bore.   The reasons for the conduct do not bear on the enquiry.   The respondent’s reasons are only relevant if an affirmative defence is raised.

[13]     Accordingly, the finding of fact that the tap was placed on the PVC pipe to reduce the head of the water contained in it is not relevant to the question of whether or not water was being taken or diverted from the aquifer.

[14]     Mr Thomsen did not challenge this reasoning head-on.  Rather he argued that Mr Logan’s submissions misunderstand the Court’s reasoning of referring to the purpose of fitting the tap to the bore.  He argued the Court’s principal finding was that the liquid that was taken did not fit the definition of “water” in the Act because it was in a pipe and so fell within the exemption in paragraph (c), see [45], [52] and [54].

Question 2: Did the defendant take or divert water from the aquifer?

[15]     Mr Logan argued that the Judge himself had acknowledged in paragraph [52] that the consequence of the water being taken from the pipe by the tap was that replacement water would flow into the pipe (from the aquifer) through the perforations at the bottom of the bore.

[16]     Mr Logan submitted that the causation reasoning to be applied in RMA cases is robust.  It is sufficient that there is a causal connection.  He relied on McKnight v New Zealand Biogas Industries Limited   [1994] 2 NZLR 664. That was a case where the defendant was charged with breach of s 15 of the RMA by discharging contaminants. The Court of Appeal stated at 669:

A person may discharge contaminant within s 15(1) though not intending to do so.

It continued:

... Any requirement that the person foresee, or be aware of, the discharge would not be consistent with the available defences.

Plainly however a person could not be said to discharge the contaminant unless there is a causal connection between the person and the discharge.

[17]     The judgment then discussed the statutory defences.  The Court concluded:

This means that because of its context the word discharge is to be construed as  extending  to  cause  to  discharge.  That  accords  with  the  natural  and ordinary meaning of discharge as engaging in an activity which results in the emission or discharge of contaminant.

(At 670)

[18]     Mr Logan argued that similarly a person takes or diverts water when that person causes water to be taken or diverted.

[19]     Mr Thomsen’s response to this argument was again principally that the liquid was not water as defined in the RMA.  Further, he pointed out that the regional plan did not contain rules that controlled the problem that was being addressed in this case, the escape of water from a confined aquifer.     He argued that the correct interpretation of the facts was that if the tap had not been turned on at all water would continue to be displaced from the aquifer.  In that sense there is no causative link between turning on the water and taking or displacing water from the aquifer and that the truth of the problem here is that it was acts of third persons or natural forces which had caused the problem which PPPL was trying to mitigate.  He relied in part on the judgment of Viscount Dilhorne in the House of Lords in Alphacell Ltd v Woodward [1972] All ER 475 at 483. The case was cited by the Court of Appeal in McKnight at 670, though not this passage.

Question 3:  Was the finding that water was taken or diverted from the bore conclusion properly open to [the Court] on the evidence?

[20]      Both counsel agreed that the test to determine is whether the facts of the case brought it within the construction of a statute.  See Commissioner of Inland Revenue v Walker [1963] NZLR 339.

[21]     The RMA anticipates the need for works to be undertaken to remedy adverse effects on the environment.   Emergency powers are given to various persons in s 330.   Works can be done to mitigate the adverse effects of an emergency without s 14 applying (s 330(1)), but once that work has been undertaken the person who undertook the work is required to apply in writing for an appropriate consent under the RMA (s 330A(2)).

[22]     In paragraph [52] of his decision Judge Dwyer reasoned that PPPL were not taking water from the aquifer because it had been taken at the point where the pipe intercepts the aquifer, which pipe had been placed by other persons.  Allied to that, in paragraph [53] he relied on a characterisation of the tap at the end of the pipe as being to control the level of water already in a pipe, and so made a link back to sub- paragraph  (c)  of  the  definition  of  “water”.    By  contrast  in  the  decision  of  the Planning Tribunal in Minister of Conversation v South Taranaki DC WO61/93, the Tribunal had to decide whether a discharge of sewage was to a coastal area or to a stream.  The sewage passed through a pipe and then through a tunnel (also regarded by the Tribunal as a pipe) but when it left the tunnel it was regarded by the Tribunal as a discharge.

[23]     Similarly here, there is no doubt in my mind that the installation of a tap instead of a cap on the top of the pipe took or diverted the water from the aquifer.

[24]     The context of this case is more naturally one of emergency works.  No-one had  ever  intended  to  draw  water  from  this  aquifer.    It  had  been  accidentally breached.  All the works undertaken were trying to stop the water escaping from the aquifer at this point.  The Council could have taken its own steps under s 330 and applied thereafter for resource consents for the work.  It did not.

[25]     Given the policy that RMA consents have to be obtained for remedial works it was quite appropriate for the land use and water permit consents to be granted for the taking of water from the aquifer to Bullock Creek as a means of reducing the pressure while the plugging works were constructed.   There was also a justification

for looking for compliance with the relevant rules for the final remedial step of installing a tap on the pipe.

[26]     Accordingly, in my view, Judge Dwyer’s distinction between the water in the five metre pipe and the water in the aquifer, so that the former is not “water” for the purpose of the RMA is inconsistent with the scheme and purpose of the Act.   I answer question 1:  “no” and question 2: “yes”.  I answer question 3:  “no”.  The answer to the third question follows from the answer to the second question.

Orders

[27]     Mr  Thomsen  submitted  that  whatever  way this  Court  answered  the  case stated the Court should decline to send this matter back to the District Court for reconsideration.   He pointed out that the parties agreed that there were either no adverse effects or no more than minor adverse effects on the environment as a result of the respondent’s actions.  It will be recalled that the water was being diverted to Bullock Creek, which was the ultimately discharge point of the water in the underground aquifer anyway.  Because there is in effect no adverse effect at the heart of these proceedings, they should not be prolonged.  He argued that his client had been put to considerable expense by both the original hearings and this appeal.

[28]     Mr Logan accepted that there was some force in this submission.  This was a proper concession.   He said that his Council’s principal concern was to test the finding by the District Court that the water in the pipe was not “water” for the purpose of the RMA.

[29]     I am satisfied that it is appropriate that this case not be remitted back to the District Court for further consideration.   Given that a third party was reading the meter, Mr Kennerley had reason to suspect that someone might have been tampering with the valve.  I, of course, make no finding in that account.  But it does explain, to a degree, though not completely, why PPPL did not react immediately to the first readings.  With the benefit of hindsight they should have drawn their concerns to the Council straight away.   But overall we are talking only of a period of about three weeks and in a context where no adverse effect was occurring.   Even though the

offence is one of strictly liability, it is difficult to see that there would be any significant penalty imposed on PPPL who only got into this problem because they were trying to remedy another party’s accidental broach of the underground aquifer.

[30]     In the circumstances there will be no order for costs.

Solicitors:

Ross Dowling Marquet Griffin, Dunedin, for Appellant

Gallaway Cook Allan, Dunedin, for Respondent