Rerewhakaaitu Farm Limited v Bay of Plenty Regional Council
[2021] NZHC 3004
•8 November 2021
IN THE HIGH COURT OF NEW ZEALAND ROTORUA REGISTRY
I TE KŌTI MATUA O AOTEAROA
TE ROTORUA-NUI-A-KAHUMATAMOMOE ROHE
CRI-2021-463-000040
[2021] NZHC 3004
BETWEEN REREWHAKAAITU FARM LIMITED
Appellant
AND
BAY OF PLENTY REGIONAL COUNCIL
Respondent
Hearing: 28 June 2021 Counsel:
A F Pilditch QC and P Hardie for appellant A Hopkinson and V Brewer for respondent
Judgment:
8 November 2021
JUDGMENT OF KATZ J
This judgment was delivered by me on 8 November 2021 at 2:30 pm Pursuant to Rule 11.5 High Court Rules
Registrar/Deputy Registrar
Solicitors: CooneyLeesMorgan, Tauranga
Jones Howden, Matamata
Counsel: A F Pilditch QC, Richmond Chambers, Auckland
REREWHAKAAITU FARM LIMITED v BAY OF PLENTY REGIONAL COUNCIL [2021] NZHC 3004
[8 November 2021]
Introduction
[1] On 4 October 2018, Graeme Willacy, a worker on a dairy farm owned by Rerewhakaaitu Farms Ltd (“RFL”) set up a travelling effluent irrigator. Although he had previously set up the irrigator over 200 times without incident, on this occasion he set it up on a run which would bring it too close to a fenced off riparian area, through which flowed a small stream. As a result, some effluent was dispersed close to the stream and flowed into it. RFL, as the farm owner, holds the resource consent that authorises discharges of dairy effluent at the farm.
[2] The farm manager, Andrew Truscott, was away at the time. Mr Willacy was therefore under the supervision of Lance Wright, the senior farm worker. The Bay of Plenty Regional Council (“the Council”) charged Mr Willacy, Mr Wright and RFL under the Resource Management Act 1991 (“RMA”) with discharging a contaminant onto land where it may enter water.1
[3] Mr Willacy acknowledged from the outset that he had “screwed up” and promptly pleaded guilty. The charge against Mr Wright was dismissed at the end of the prosecution case. Following the conclusion of the trial, RFL was found guilty by Judge J J M Hassan in the District Court at Rotorua, on the basis that it was vicariously liable for Mr Willacy’s offending, pursuant to s 340 of the RMA.2 His Honour held that RFL had failed to establish either of the statutory defences in s 340, namely that:
(a)neither the directors nor any person involved in RFL’s management knew, or could reasonably be expected to have known, that the offence was to be or was being committed (“the lack of knowledge defence”); or
(b)that RFL took all reasonable steps to prevent the commission of the offence (“the reasonable steps defence”).
1 Resource Management Act 1991, ss 15 and 338.
2 Bay of Plenty Regional Council v Rerewhakaaitu Farm Ltd [2020] NZDC 22184.
[4]RFL now appeals its conviction. The key issues on appeal are:
(a)Was the charging document defective because it did not expressly refer to s 340 of the RMA?
(b)If not, was RFL otherwise fully and fairly informed of the case it had to meet (including that it faced an allegation of vicarious liability)?
(c)Did the trial Judge err procedurally, by dismissing RFL’s reasonable steps defence on a basis that was not put to RFL’s witnesses at trial? If so, has this created a real risk that the outcome of the trial was affected?
(d)Did the Judge err in finding that RFL had failed to establish either the reasonable steps defence or the lack of knowledge defence?
Approach to appeal
[5] The Court must allow the appeal if satisfied that the trial judge erred in his or her assessment of the evidence to such an extent that a miscarriage of justice has occurred, or a miscarriage of justice has occurred for any reason.3 A miscarriage of justice is any error, irregularity, or occurrence in or in relation to or affecting the trial that:4
(a)has created a real risk that the outcome of the trial was affected; or
(b)has resulted in an unfair trial or a trial that was a nullity.
[6] In Sena v Police, the Supreme Court stated that appeals against conviction from a Judge alone trial are to be approached as a rehearing in accordance with the principles set out in Austin, Nichols & Co Inc v Stichting Lodestar.5 If the appellate court comes to a different view on the evidence, the trial judge will have necessarily erred and the appeal must be allowed.6
3 Criminal Procedure Act 2011, s 232(2).
4 Section 232(4).
5 Sena v Police [2019] NZSC 55, [2019] 1 NZLR 575 at [32] citing Austin, Nichols & Co Inc v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141.
6 At [38].
[7] The Supreme Court in Sena made it clear, however, that the matter is not approached on a de novo basis.7 An appellant will still need to point to some error in the trial judge’s decision.8 The appellate court must also have regard to any advantages the trial court may have had – in particular, the ability to assess competing oral evidence first hand over the entirety of a trial.9 The adequacy of reasons given for the trial judge’s conclusions will also be relevant.
Relevant law
[8] The legislative purpose of the RMA is to promote the sustainable management of natural and physical resources.10 One of the ways the Act promotes this purpose is by enacting a strict liability regime in order:11
… to ensure, so far as is possible, that contamination is avoided by enacting criminal sanctions for those who ought, as a matter of public policy, to take steps to ensure that contamination does not occur.
[9] Section 15(1) relevantly provides that no person may discharge any contaminant onto land in circumstances which may result in that contaminant entering water. Every person who contravenes or permits a contravention of s 15 commits an offence.12 The definition of discharge includes “emit, deposit and allow to escape”.13
[10] Section 15 is a strict liability offence.14 In McKnight v NZ Biogas Industries Ltd the Court of Appeal described the s 15 offence in the context of the RMA regulatory offence regime as follows:15
The statutory structure enacts strict liability subject to the statutory defences which reflect the absence of fault defence evolved in the cases already cited… It is entirely consistent with the importance attached to protection of the nation’s natural and physical resources in the Resource Management Act.
7 At [38].
8 At [38].
9 At [38]-[40].
10 Resource Management Act 1991, s 5.
11 Sullivan v Taranaki Regional Council [2013] NZHC 1301 at [23].
12 Section 338(1)(a).
13 Section 2 definition of “discharge”.
14 Sections 338(1)(a) and 341(1).
15 McKnight v NZ Biogas Industries Ltd [1994] 2 NZLR 664 (CA) at 672.
[11] The Court of Appeal in McKnight v New Zealand Biogas Industries Ltd held that the term “discharge” in this context goes beyond direct action by a person, and also encompasses passive lack of interference.16 As Harrison J explained in URS New Zealand Ltd v District Court at Auckland:17
[44] … The statutory meaning of “discharge” extends to engaging in an activity which results in the emission or discharge of a contaminant, consistently with the policy of preventing contamination of waterways…
…
[46] … the phrase “allow to escape”, which is the alternative of “passive contamination”, is satisfied where a person fails to take reasonable precautions necessary to prevent an escape…
[47] … Biogas recognises the distinction between the alternatives of positive acts or passive omissions in breach of s 15. In the former or active category, the word “discharge” embraces the concept of causing to discharge, thereby bringing into the net of liability a party whose acts or omissions are an operative or effective factor in the chain of causation leading to a physical discharge. In the latter or passive category, the phrase “allows to escape” within the meaning of “discharge” allows a limited relaxation of the statutory principle of strict liability, by measuring liability against reasonable standards of care.
[12] In addition to being directly liable for a discharge (in either the active or the passive sense) a defendant may be vicariously liable for an offence committed by their agent or employee pursuant to s 340, which relevantly provides:
340 Liability of principal for acts of agents
(1)Where an offence is committed against this Act—
(a)by any person acting as the agent (including any contractor) or employee of another person, that other person shall, without prejudice to the liability of the first-mentioned person, be liable under this Act in the same manner and to the same extent as if he, she, or it had personally committed the offence…
…
(2)Despite anything in subsection (1), if proceedings are brought under that subsection, it is a good defence if—
(a)the defendant proves,—
…
16 At 669 and 670.
17 URS New Zealand Ltd v District Court at Auckland [2009] NZRMA 529.
(ii)in the case of a person other than a natural person,—
(A)that neither the directors (if any) nor any person involved in the management of the defendant knew, or could reasonably be expected to have known, that the offence was to be or was being committed; or
(B)that the defendant took all reasonable steps to prevent the commission of the offence; and
(b)the defendant proves that the defendant took all reasonable steps to remedy any effects of the act or omission giving rise to the offence.
[13] Hence, an employer will be liable in respect of an RMA offence committed by their employee unless they can prove either of the defences in s 340.
Factual background
[14] The key facts are not in dispute. RFL is the owner of the dairy farm. It employed Mr Truscott as the farm manager and three farm workers, including Mr Wright and Mr Willacy. On the morning of 4 October 2018, Mr Truscott was away from the farm and Mr Wright was in charge.
[15] RFL’s resource consent allows for the discharge of dairy wash water (effluent) to irrigate pastures on the farm, subject to a number of conditions. The conditions include that effluent is not to reach surface waters by overland flow, effluent is not to be discharged onto land within 20 metres of any water body, and the rate of effluent application is not to result in the ponding of effluent.
[16] Effluent from the farm’s holding pond is distributed via a network of pipes and hydrants to a travelling irrigator. When activated, the travelling irrigator sprays effluent as it moves in a straight line being pulled automatically on a cable that is anchored by the operator in a paddock on a fence post. The irrigator will run for one to three hours depending how long its timer is set for.
[17] Mr Willacy was responsible for setting up the travelling irrigator on the morning of 4 October 2018. This routinely occurred after milking had finished. At the time Mr Wright was busy attending to a down cow (a recumbent cow that cannot get up) and the other farm worker was assisting him with this.
[18] At about 10 am, Mr Willacy set up the irrigator in paddock 69. Paddock 69 is undulating in places and has an irregular boundary with a riparian area. Mr Willacy made the mistake of setting up the irrigator on a direction of travel that, during its run, would cause it to come too close to the fenced off riparian area on the western edge of paddock 69. A tributary stream of the Awaroa stream ran through the fenced off area.
[19] After he had set up the irrigator, Mr Willacy returned to the cowshed and switched the irrigator on. The farm had a policy (although it was not in writing) that required the person setting up the irrigator to go back and check on it once the pump had been turned on. Mr Willacy failed to do this and therefore missed an opportunity to realise he had made a mistake when setting up the irrigator. Mr Willacy worked for the rest of the morning on other tasks elsewhere on the farm. Neither Mr Wright nor the other farm worker checked the irrigator that morning.
[20] At about 1.30 pm a Bay of Plenty Regional Council officer arrived at the farm to carry out a routine compliance inspection. When he inspected the irrigator in paddock 69 he found that it had completed its timed run and come to a stop about eight metres from the riparian fence (14 metres from the middle of the stream). The irrigator had discharged effluent within 20 metres of the stream, in breach of RFL’s resource consent. Effluent had flowed into the tributary stream running through the riparian area.
[21] The Council officer alerted Mr Wright to the problem and directed him to stop the flow of effluent into the stream by digging some small bunds with a spade. Mr Willacy and Mr Wright immediately attended to this.
District Court judgment
[22] As noted above, Mr Willacy pleaded guilty to contravening s 15(1)(b). The Judge found RFL vicariously liable for this breach pursuant to s 340(1)(a). As a result, RFL would be found guilty of contravening s 15(1)(b) in the same manner and to the same extent as if it had personally committed the offence, unless it could prove on the balance of probabilities that one of the defences in s 340(2) applied.
[23] Although the Judge was satisfied that RFL had proved the second limb of both of those defences, namely that it had taken all reasonable steps to remedy any effects of the discharge,18 he found that RFL had not proved either of the first two alternative limbs of the s 340(2) defences. RFL was therefore found guilty on a vicarious basis. The Judge accordingly did not consider whether RFL was also directly liable for a breach of s 15(1)(b) as a principal.
[24]RFL was convicted and fined $24,000.19
Was the charging document defective or a nullity because it did not expressly refer to s 340?
The charging document
[25]The charging document relevantly states:
Offence description: [RFL] contravened or permitted a contravention of section 15(1)(b) of the Resource Management Act 1991 by discharging a contaminant, namely dairy effluent, onto or into land in circumstances which may result in that contaminant … entering water, when that discharge was not expressly allowed by a … resource consent.
Legislative reference: Sections 338(1)(a) and 15(1)(b) of the [RMA]
[26] Particulars were requested, but not provided. RFL did not pursue the matter further.
The Judge’s ruling on vicarious liability
[27] On 5 June 2020, the Friday before trial, the prosecution filed and served its opening legal submissions. They summarised the basis on which the prosecution alleged that RFL was liable, as follows:
RFL
51.The prosecutor’s case against RFL is that it had a causative role in the discharge because:
(a)RFL is the farm owner and consent holder;
18 Section 340(2)(b).
19 Bay of Plenty Regional Council v Rerewhakaaitu Farm Limited [2021] NZDC 4217.
(b)RFL failed to ensure that Mr Willacy received appropriate training on the consent conditions and how to safely operate the farm’s effluent management system;
(c)RFL failed to ensure that there were adequate systems in place to protect against accidental effluent discharges, for example it had not implemented an effluent management plan requiring the irrigator be checked during use to ensure it was operating correctly and not discharging effluent in contravention of the consent conditions;
(d)RFL was aware of facts from which a reasonable person would recognise that escape of a contaminant could occur. It is self-evident that if a travelling irrigator malfunctions and/or is left operating in one location for too long effluent can pond and flow overland to a nearby watercourse. The risks associated with effluent irrigators had been reinforced to RFL in a letter from the Council dated 14 August 2018. RFL had identified the area within paddock 69 where the irrigator was located as an area that was unsafe for irrigation in a document that RFL called its “traffic light map”. Having identified this risk, it failed to ensure its employees were aware of the traffic light map and were complying with it.
52.Alternatively, the prosecutor submits that RFL is vicariously liable for the acts of its employee, Mr Willacy, under section 340(1)(a) of the RMA.
[28] Hence, the prosecution alleged that RFL was primarily liable under s 15(1)(b) on three bases – that it failed to ensure Mr Willacy received appropriate training on the farm’s effluent management system; that it had not included in its effluent management plan a requirement that the irrigator be checked during use; and that it failed to ensure that its employees were aware of the traffic light map (a map kept in the milking shed which showed the level of risk in each area of the farm for effluent irrigation purposes). In the alternative, the prosecution alleged that RFL was vicariously liable for Mr Willacy’s offending.
[29] RFL says that this was the first time that it became aware that the Council was advancing its case (in the alternative) on the basis of vicarious liability. RFL promptly objected. Its objection was heard at the outset of the hearing. Counsel for Mr Wright raised a similar objection.
[30] The Judge ruled that the charging notice was not defective. He followed the decision of Osborne J in Fulton Hogan Ltd v Canterbury Regional Council which held that a charging document under the RMA was not required to specifically refer to
s 340.20 The Judge found that the relevant offence provisions were ss 15 and 338, which were both referred to in the charging notice. Section 340 simply extended vicarious liability to an employer for an offence committed by their employee or agent, unless one of the defences in ss 340 or 341 is made out. (Section 341 is not relevant in this case.)
[31] The charging document was therefore not defective. Further, because the charging document used the words “contravened” or “permitted a contravention” it effectively disclosed that the prosecutor sought to cover the full gamut of all offending for the described incident. This is in the context where the offending is alleged to have occurred on land owned by RFL as a result of farming operations, for which RFL can be imputed to be responsible on the basis that its two co-defendants were both RFL employees.
Was Fulton Hogan wrongly decided?
[32] Judge Hassan was bound by Fulton Hogan. On appeal, however, Mr Pilditch QC (counsel for RFL) submitted that Fulton Hogan is wrongly decided, and that I should decline to follow it.
[33]The relevant question before the High Court in Fulton Hogan was as follows:21
Was the Judge correct to conclude that it was not necessary for the charging documents to reference s 340(1) in order for vicarious liability to be relied upon or for the defences under s 340(2) to be available?
[34] Osborne J first summarised the reasoning of Judge Hassan at first instance, including that:22
(a)Only s 338 of the RMA specifies RMA offences, as indicated by the cross-referencing solely to s 338 in ss 338(4), 339, 339B, 339C, 341 and 342.
20 Fulton Hogan Ltd v Canterbury Regional Council [2019] NZHC 1767.
21 At [38].
22 At [30]
(b)Section 340 is not a self-contained offence or vicarious liability provision. The role of s 340 of the RMA is to operate in tandem with s 338, to some extent supplementing the offences specific in s 338.
(c)Section 340(1)(a) operates to impute liability to a principal or employer for the contravening acts of their agent (including a contractor or employee).
(d)The reference in s 340(2) to “proceedings … brought under [subs (1)]” is that the s 340(2) defences apply whenever vicarious liability is imputed simply by operation of s 340(1) and the defences are not limited to circumstances in which vicarious liability is explicitly alleged in the charging documents.
(e)Both primary offenders and vicarious co-defendants may be charged in the same terms for the same contraventions.
[35]After setting out the submissions of both parties, Osborne J concluded that:
[57] The single, reasonable interpretation of part 12 [of the RMA] is that the relevant offence is created under s 338 … s 340 [of the] RMA is not a self-contained offence… [I]t is the provisions of s 339 alone which provide penalties for offences under part 12 of the RMA. Those provisions do not identify any penalty in relation to s 340. There is no reason to believe that Parliament intended to create a stand-alone offence under s 340 but then overlooked the need to provide a correlative penalty. One should examine the organisation and format of part 12, including the heading of s 338 itself. Examined thus, the penalty provisions in s 339, accounting for each of the offences created by s 338, are reasonably to be taken as covering each situation of liability under part 12.
[58] This interpretation of ss 338 to 340 is not undermined by the s 340(2) words “if proceedings are brought under that subsection [340(1)]”…
…
[62] The … wording of s 340(2) RMA … does not directly describe the creation of an offence. The words used in s 340(2), standing alone, might be there as one possible interpretation a recognition that an offence is created under s 340(1), but such an interpretation cannot stand when the provisions in the Act are interpreted in their full context, including the surrounding provisions.
[36] Osborne J held that Judge Hassan had correctly concluded that s 340 of the RMA does not created a distinct offence provision. Section 338(1)(a) had therefore been correctly identified in the charging documents as the offence-creating provision.
[37] The reasoning in Fulton Hogan, in my view, is compelling. Section 338 of the RMA is explicitly a provision that creates offences. The penalties specified in s 339 of the RMA are only available in respect of offences against s 338. There are no separate penalties relating to s 340, because that provision does not expressly create any offence. Instead, s 340(1)(a) sets out a rule of vicarious liability which applies where an offence is committed against the RMA by any person acting as the agent or employee of another person. If this rule applies (because an employee has committed an offence), then the principal becomes liable for the offence as if they had personally committed it under s 338, unless they can establish one of the statutory defences.
[38] Mr Pilditch submitted that the reasoning in Fulton Hogan offends against the presumption of innocence in s 25(c) of the New Zealand Bill of Rights Act 1990 (“NZBORA”). Because strict liability offences shift the onus of exculpation to the defendant, they clearly do encroach on the presumption of innocence. However, because they operate within the limited “public welfare regulatory” sphere, strict liability offences are regarded, under s 5 of the NZBORA, as a justified limit on the presumption of innocence.23 As the Court of Appeal explained in Civil Aviation Department v MacKenzie:24
… the defendant will ordinarily know far better than the prosecution how the breach occurred and what he had done to avoid it. In so far as the emphasis in public welfare regulations is on the protection of the interests of society as a whole, it is not unreasonable to require a defendant to bear the burden that the breach occurred without fault on his part … a high standard of care is properly expected of a defendant in such a case and he must prove that he did what a reasonable man would have done.
[39] Mr Pilditch further submitted that Fulton Hogan is wrong because s 340(2) uses the words “proceedings are brought”. This argument was addressed in both the District Court and High Court in Fulton Hogan. As set out in the quote at [35] above, Osborne J found that although this was one possible interpretation, such an
23 Law Commission Pecuniary Penalties (NZLC R133, 2014) at [5.16].
24 Civil Aviation Department v MacKenzie [1983] NZLR 78 (CA) at 85.
interpretation could not stand when the relevant statutory provisions are interpreted in their full context, including the surrounding provisions. I agree.
Conclusion
[40] In my view Fulton Hogan was correctly decided. The charging document was not therefore defective or a nullity because it failed to expressly refer to s 340.
Was RFL fully and fairly informed of the case it had to meet?
[41] Although there was no legal requirement that the charging document expressly refer to s 340, the charge was nevertheless required to contain sufficient particulars to fully and fairly inform RFL of the substance of the offence it was alleged to have committed.25 Further, a person charged with an offence must be informed promptly and in detail of the nature and cause of the charge.26 Exactly what is required will vary from case to case.
[42] In this case, Judge Hassan struck out the charge against Mr Wright at the commencement of the trial on the basis that there had not been full and fair disclosure of the fact that Mr Wright was alleged to be vicariously liable for Mr Willacy’s conduct. His Honour observed that it was unusual, and not a matter of obvious inference, that one employee of a company could be said to be an agent of another employee. This proposed basis of liability should therefore have been expressly disclosed. Given that RFL was a body corporate, however, the Judge found that its situation was different. RFL should have realised that it would be argued that it was vicariously liable for the actions of its employees.
[43] Mr Pilditch submitted that Ruki v Bay of Plenty Regional Council is broadly analogous.27 In that case Mr Johnstone was found guilty on the basis of vicarious liability, despite the prosecution not advancing their case on that basis at trial.28 Nor did the trial Judge inform Mr Johnston that his liability would be considered on that
25 Criminal Procedure Act 2011, s 17(4).
26 New Zealand Bill of Rights Act 1990, s 24(a).
27 Ruki v Bay of Plenty Regional Council [2020] NZHC 669.
28 At [70]-[72].
basis. Mr Johnstone only learned that s 340 was being applied when he received the verdict decision.
[44] Fitzgerald J quashed Mr Johnstone’s conviction, observing that it was “trite” that a defendant must have fair notice of the allegations.29 What was required was a question of fact and degree.30 Because Mr Johnstone did not know the basis of his liability until he received the verdict decision, he was denied the ability to present a defence he could otherwise have presented, and a miscarriage of justice had occurred.31
[45] This case obviously differs from Ruki in that RFL found out shortly before trial (not after trial) that the prosecution intended to advance its case, in the alternative, on the basis of vicarious liability.
[46] Mr Hopkinson, for the Council, submitted that the Judge was correct to find that RFL should have appreciated that vicarious liability would be in issue. RFL owned the relevant farm and held the relevant consent. It carried out the dairy farming operation and exercised the rights under its consent through the actions of its employees and contractors. Mr Hopkinson submitted that any offence committed by those employees and contractors under the RMA was therefore going to involve RFL and raise the issue of vicarious liability. Vicarious liability is raised as a matter of obvious inference in such circumstances, even if not expressly notified to the defendant.
[47] Mr Pilditch challenged this assertion and submitted that it is not a foregone conclusion that just because a defendant is a company, vicarious liability will be raised. A company can also be primarily liable under s 15. He submitted that it was reasonable for RFL to assume from the wording of the charging document that it was charged solely as a primary offender (either active or passive).
[48] In my view the disclosure to RFL prior to trial of the specific allegations against it, and the fact that vicarious liability was alleged, fell well short of best
29 At [76].
30 At [76].
31 At [77]-[78].
practice. I accept that RFL did not realise that vicarious liability was in issue until Friday 5 June 2021. In the overall circumstances of this case, however, this late disclosure has not given rise to a miscarriage of justice. There is no real risk that the failure to specifically alert RFL to the fact that vicarious liability would be relied on affected the outcome of the trial.
[49] First, although not ideal, it is certainly not unusual for aspects of the prosecution case to be clarified in opening submissions. In Fulton Hogan, Osborne J referred to examples of two recent Court of Appeal cases where the Court held that a lack of particulars had been cured by the prosecutor’s opening submissions at trial:32
(a)Wiley v R, where the Court rejected a submission as to the insufficiency of particulars of the substance of the offence under s 17(4) of the Criminal Procedure Act 2011 on the basis that the prosecutor had made clear, at trial before the jury was empanelled, the basis on which the Crown proposed to proceed.33
(b)Nattrass-Bergquist v R, where the Court, in rejecting a ground of appeal by which it was asserted that a charging document did not contain sufficient particulars to comply with s 17(4) of the Criminal Procedure Act 2011 (in relation to the form of murderous intent relied on by the Crown), found that the Crown’s intention to rely on s 167 of the Crimes Act 1961 was clear from the prosecutor’s opening to the jury at trial.34
[50] Here, RFL was given notice that vicarious liability was raised the Friday before the trial commenced. Then, after the Judge gave his ruling on s 340, RFL was given the opportunity to seek any additional trial directions. It could, at that stage, have sought an adjournment of the trial if it believed that it would be seriously prejudiced by proceeding. It did not do so.
[51] In any event, the initial three days allocated for the trial (8 to 10 June 2020) were occupied with legal argument about vicarious liability, the delivery of the ruling, and then the prosecution evidence. At the close of the Council’s case the trial was
32 Fulton Hogan Ltd v Canterbury Regional Council [2019] NZHC 1767 at [97].
33 Wiley v R [2016] NZCA 28, [2016] 3 NZLR 1 at [97]-[98].
34 Nattrass-Bergquist v R [2017] NZCA 552 at [64].
adjourned part heard until 1 September 2020. RFL therefore had almost three months to prepare any additional evidence and undertake any further research. I am not aware if RFL did so, but Mr Pilditch did not point to any further evidence RFL could have given (for example in support of its s 340(2) defence), or further submissions it could have made, if it had had more time.
[52] I also accept Mr Hopkinson’s submission that there is a close similarity between the “took all reasonable steps” element of the s 340(2) defence, and the “failed to take reasonably prudent precautions” element of the prosecutor’s case that RFL was directly liable under s 15(1)(b). For example, in Otago Regional Council v Northlake Investments Ltd, Judge Dwyer held that his findings in relation to Northlake Investments’ direct liability under s 15(1)(b) of the RMA meant that the defence in s 340(2) could not be proved by Northlake Investments.35 Hence, in practical terms, RFL presumably prepared for trial on the basis that it would need to address this issue, even if it did not appreciate that vicarious liability would be in issue.
[53] In conclusion, even if RFL did not realise that vicarious liability was in issue until Friday 5 June 2020, this has not resulted in a miscarriage of justice.
Did the Judge err in dismissing RFL’s reasonable steps defence without putting a key ground for his decision to RFL’s witnesses during the trial?
[54] Mr Pilditch submitted that the trial Judge dismissed RFL’s reasonable steps defence without putting a key element of his reasoning to RFL’s witnesses during the trial.
[55] The Judge acknowledged that RFL had taken a number of steps with the intention of preventing the commission of effluent discharge offending. He also found, however, that “the evidence also reveals some notable omissions, given what was known concerning the risks in operating the irrigator.” In summary, the Judge found that:
(a)RFL’s regime for monitoring the operation of the irrigator was inadequate. In particular, RFL should have had in place a system that
35 Otago Regional Council v Northlake Investments Ltd [2019] NZDC 11710 at [79].
would have included assigning to the manager or, through a roster, another staff member (in addition to the staff member who set up the irrigator) responsibility to check on how the irrigator was operating.
(b)There was no direction given to the rostered farm worker on how long the irrigator would be timed to run for.
(c)There was no system of proactive enquiry and scrutiny by RFL’s director of the farm manager’s systems for staff supervision and monitoring of effluent discharge operations.
[56] Mr Pilditch submitted that the Judge’s key finding was that set out in [55](a) above (the “second person check” requirement), but that this finding was made in breach of natural justice because RFL’s witnesses were not given an opportunity to comment on this matter.
[57] Mr Hopkinson, on the other hand, submitted that the Judge was entitled to find RFL liable on the basis that it had not proved that it had taken all reasonable steps to prevent the commission of the offence. He was not required to air his proposed findings on liability at the trial so that RFL could respond to them before those findings were confirmed in the judgment. The onus was on RFL as the defendant to satisfy the Court that it had taken all reasonable steps to avoid the commission of the offence to avoid liability under s 340(1).
[58] The difficulty, however, is that the failure to have a system in place for a second person to check the operation irrigator was not part of the prosecution case. RFL did not therefore anticipate that this was a “reasonable step” that it needed to address. The prosecution case was that RFL did not have a policy at all for checking the irrigator once it was operating. RFL established at trial, however, that it did have a policy or practice that the person who set up the irrigator must subsequently check it (although this policy was not formally documented). Mr Willacy, who was a prosecution witness, confirmed that he was aware of this requirement but had failed to follow it on this one occasion. The Judge accepted that RFL had this (unwritten) policy.
[59] As for Mr Willacy’s level of experience and expertise, the Judge found that, as an experienced ISO trained farm hand, Mr Willacy was familiar with how to operate a travelling irrigator and had done so on the farm some 200 times, including at least three times in paddock 69. He knew the importance of keeping effluent out of watercourses. He frankly admitted that he had made a mistake in putting the irrigator too close to the riparian area, saying “I admit that day I screwed up”. Mr Willacy acknowledged that checking how the irrigator was operating was part of his job, and that he had slipped up and failed to do it on the day of the offence. The Judge concluded that:
[81] In essence, the evidence overwhelmingly presents Mr Willacy as a farm worker who was properly competent and experienced in the operation of a travelling irrigator, but who made uncharacteristic mistakes on 4 October 2018 that resulted in the offending discharge.
[60] The proposition that a “second person check” would have been a reasonable further step for RFL to take to prevent an unauthorised effluent discharge was never put to RFL’s witnesses by either the prosecution or the Judge. Mr Pilditch advised, however, that both Mr Hamilton and Mr Truscott would have been in a position to address this proposition if questioned about it. They could have apparently explained why, in their view, such a policy would have been entirely impractical. Further, they (or possibly an expert witness) would likely have been able to give evidence that they were not aware of any farm in New Zealand that had adopted such a policy.
[61] In Nominal Defendant v Saleh, the Court of Appeal of New South Wales observed that procedural fairness extends to the Court’s duty to give “a fair opportunity to those who are parties in the controversy for correcting or contradicting any relevant statement prejudicial to their view.”36 This requires a party to be:37
… given the opportunity to respond to matters prejudicial to its interests that are known only to the court and which might be taken into account in the determination of issues that may affect the party’s property, rights or legitimate expectations.
36 Nominal Defendant v Saleh [2011] NSWCA 16 at [23].
37 At [23].
[62] The Court further observed that where a denial of natural justice affects the entitlement of a party to make submission on a fact, it is difficult for an appellate court to conclude that compliance with natural justice could have made no difference.38
[63] Such observations, in my view, are uncontroversial and reflect well established law. I therefore accept Mr Pilditch’s submission that the failure to give RFL’s witnesses an opportunity to comment on the “second person check” reasonable step was procedurally unfair. As a consequence, the finding that a further reasonable step that RFL could have taken to prevent an effluent discharge was to have a second person check the irrigator must be put to one side.
Did the Judge err in finding that RFL had not established the lack of knowledge defence?
[64] In order not to be held vicariously liable for Mr Willacy’s offending, RFL had to establish either the lack of knowledge defence or the reasonable steps defence.
[65] The lack of knowledge defence required RFL to establish that neither the directors nor any person involved in the management of RFL knew, or could reasonably be expected to have known, that the offence was to be (or was being) committed.
The Judge’s findings in respect of the lack of knowledge defence
[66] The Judge found that the lack of knowledge defence had not been established for the following reasons:
(a)Mr Wright was involved in the management of RFL.
(b)RFL did not have in place proper systems for keeping its manager(s) properly informed.
(c)RFL’s systems for checking on the irrigator were deficient in that they placed undue reliance on the competence of the farm worker assigned
38 At [16].
to set it up rather than having an appropriate back up in case of mistakes, such as having a second staff member assigned to monitoring.
(d)It would have been readily evident, on proper checking, that the irrigator would have run too close to the riparian area.
(e)There was a significant period of time that elapsed before the irrigator started spraying effluent into the riparian area during which a manager could have become informed of the impending offence.
[67] Overall, the Judge concluded that a lack of proper monitoring of the irrigator on the morning of 4 October 2018 significantly impeded the capacity of Mr Wright to have been alerted to the prospect of the offence. If a second staff member had been assigned to monitor the irrigator as a backup in case of mistakes, Mr Wright would have discovered Mr Willacy’s error. It follows, the Judge reasoned, that Mr Wright could reasonably have been expected to have known that the offence was to be committed. The lack of knowledge defence had therefore not been established.
Submissions
[68] The Council submitted that the Judge’s approach to the lack of knowledge defence was realistic and appropriate. The possibility of human error existed, as was accepted by RFL. Accordingly, in the absence of a two person system for monitoring and checking the operation of the irrigator, RFL could reasonably be expected to have known that in the event of a mistake such as that which occurred on 4 October 2018, the offence was to be committed.
[69] Mr Pilditch, on the other hand, submitted that the Judge’s approach was unrealistic. The opportunity for RFL to know of the offending was non-existent given that Mr Willacy’s offending was an isolated, uncharacteristic and short-lived event. Further, the offence was solely attributable to Mr Willacy’s failure to follow RFL’s effluent management systems and policies (which required that he return to check the irrigator). RFL could not have reasonably apprehended that Mr Willacy would inexplicably place the irrigator on a run that would bring it too close to the riparian area, and then fail to check on it, given that he had previously operated the irrigator
on more than 200 occasions without incident. Mr Pilditch submitted that there was simply no evidence to put RFL on notice of the risk that Mr Willacy would make this uncharacteristic mistake.
Discussion
[70] The Judge’s reasoning on the lack of knowledge defence again turns on the proposition that RFL should have implemented a “two person check” on the operation of the irrigator, as a fall-back against the possibility of a mistake by the person who set up the irrigator. As noted above, however, that proposition was not put to RFL’s witnesses. It is possible that if it had been, they would have been able to persuade the Judge that a two person check was neither realistic nor appropriate. I have therefore held that that particular finding should be put to one side.
[71] The Council’s case at trial was not that a second person should have been assigned to also monitor the irrigator, but rather that RFL, as the farm owner and consent holder:
(a)failed to ensure that Mr Willacy received appropriate training on the consent conditions and how to safely operate the farm’s effluent management system;
(b)failed to ensure that there were adequate systems in place to protect against accidental effluent discharges, for example it had not implemented an effluent management plan requiring the irrigator be checked (at all) during use to ensure it was operating correctly and not discharging effluent in contravention of the consent conditions; and
(c)failed to ensure its employees were aware of the traffic light map and were complying with it.
[72] RFL’s evidence focussed to a significant degree on these issues, given that they were the issues in respect of which RFL was said to have fallen short.
[73] In respect of the first and third issues, there was a direct conflict between the evidence of Mr Willacy (a prosecution witness) and Mr Truscott (a defence witness). If Mr Truscott’s evidence is accepted, then Mr Willacy received appropriate training on the consent conditions, was carefully instructed on how to safely operate the farm’s effluent management system and was shown the traffic light map. If Mr Willacy’s evidence is accepted, he did not receive appropriate training on the effluent management system and was not shown the traffic light map.
[74] The reliability of both witnesses was challenged. The Judge found the evidence of both witnesses “sufficiently reliably on all matters on which I must make findings”. He did not make an adverse credibility finding against either witness. It appears, however, that on the issue of Mr Willacy’s training (which Mr Truscott said included showing Mr Willacy the traffic light map) the Judge preferred Mr Truscott’s evidence to that of Mr Willacy. He stated that:
I find force in Mr Truscott’s observation that Mr Willacy’s previous clean record in the operation of the irrigator, some 200 times, tended to suggest he was effectively trained and inducted in doing so.
[75]I see no reason to depart from that view, which is supported by the evidence.
[76] The remaining prosecution allegation (at [71](b) above) was that RFL had failed to ensure that there were adequate systems in place to protect against accidental effluent discharges. Specifically, it had not implemented an effluent management plan requiring the irrigator be checked (at all) during use to ensure it was operating correctly. As noted above, RFL also rebutted this allegation at trial.
[77] Accordingly, at trial, RFL successfully rebutted the prosecution’s three primary allegations. The lack of knowledge defence failed because the Judge found that RFL should have had a policy requiring a second person to check the operation of the irrigator. On appeal, the Council supported the Judge’s reasoning on this issue (that a second person check should have been part of RFL’s effluent management policy) and did not advance any alternative basis for concluding that RFL had failed to prove the lack of knowledge defence.
[78] It follows, in my view, that the Judge erred in finding that the lack of knowledge defence had not been proved, because his reasoning was underpinned by a proposition (the second person check requirement) that RFL’s witnesses did not have an opportunity to comment on and which therefore must be put to one side. As noted above, RFL successfully refuted the three specific allegations advanced by the Crown (summarised at [71] above) and one or more of those allegations cannot therefore provide a reasonable alternative basis for finding that the lack of knowledge defence was not proved. It therefore follows, in my view, that the appeal should be allowed.
[79] As it is only necessary for RFL to establish one of the two alternative defences in s 340(2)(a)(ii) it is not necessary to also consider whether RFL has also proved the reasonable steps defence.
Should there be a retrial?
[80] The Council submitted that if RFL’s appeal is successful the prosecution should be remitted to the District Court for a retrial, because the trial Judge did not consider the prosecutor’s argument that RFL was directly liable as a principal for contravening s 15(1)(b) of the RMA. Rather, he took the view that because s 340 applied and the defences under s 340(2) were not proved, he did not need to consider whether RFL was liable directly.
[81] A court has a discretion as to whether to direct a new trial.39 The approach is flexible and there are no hard and fast rules regarding the exercise of that discretion.40 In this case I do not consider that it is in the interests of justice to order a retrial to consider whether RFL is liable as a principal for contravening s 15(1)(b) of the RMA.
[82] This proceeding has already occupied five days of hearing time in the District Court and a day in this Court. The issues have been fully ventilated. The underlying breach by Mr Willacy (who no longer works on the farm) appears to have been an isolated and uncharacteristic contravention, towards the lower end of the RMA offending spectrum. The directors of RFL have since undertaken a comprehensive
39 R v Samuels [1985] 1 NZLR 350 (CA) at 356.
40 At 356.
review of their effluent management plan, including taking advice from an independent expert. A repeat of this incident seems highly unlikely.
[83] Overall, it is my view that there is likely to be little benefit in committing the District Court’s limited resources (already stretched due to the current COVID-19 crisis) to a further trial in this matter.
Result
[84]The appeal is allowed, and the conviction is quashed. No retrial is ordered.
Katz J
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