Sowman v Marlborough District Council
[2020] NZHC 1014
•15 May 2020
IN THE HIGH COURT OF NEW ZEALAND BLENHEIM REGISTRY
I TE KŌTI MATUA O AOTEAROA TE WAIHARAKEKE ROHE
CRI 2020-406-1
[2020] NZHC 1014
IN THE MATTER OF the Criminal Procedure Act 2011 AND
IN THE MATTER OF
an appeal against conviction and sentence under ss 232 and 250 of the Act
BETWEEN
JOHN WAYNE SOWMAN
Appellant
AND
MARLBOROUGH DISTRICT COUNCIL
Respondent
Hearing: 12 May 2020 Counsel:
M J Radich for Appellant
A C Besier and J Webber for Respondent
Judgment:
15 May 2020
JUDGMENT OF COOKE J
Table of Contents
Factual background[4]
Procedural background and disputed facts[16]
Decision under appeal[22]
Approach on appeal[27]
Approach to appeal concerning s 106[28]
Sentence appeal[32]
Discharge without conviction appeal[34]
Issue One: was the Judge entitled to take into account evidence from the disputed facts
hearing?[34]
Issue Two: Did the Judge err by failing to take into account further materials produced at
sentencing?[50]
Issue Three: Did the Judge err by treating the co-offenders differently?[56]
SOWMAN v MARLBOROUGH DISTRICT COUNCIL [2020] NZHC 1014 [15 May 2020]
Sentence appeal[62]
Issue One: Starting point appropriate?[63]
Issue Two: Discounts for mitigating factors[73]
Result[78]
[1] The appellant pleaded guilty to two charges under the Resource Management Act 1991 (RMA) for his part in the unlawful discharge of contaminants associated with activities at a vineyard:1
(a)One charge of contravening s 15(1)(b) of the RMA by discharging “grape marc” onto land in circumstances which may have resulted in the grape marc and “leachate” entering groundwater, and
(b)One charge of contravening s 15(1)(d) by discharging grape marc and leachate from industrial or trade premises onto land.
[2] Grape marc is organic waste from wine production, and leachate is a liquid that can leech from grape marc. Mr Sowman applied for a discharge without conviction under s 106 of the Sentencing Act 2002. In a judgment delivered 9 December 2019 Judge Hassan declined the application and sentenced Mr Sowman to a fine of $18,000 and ordered him to pay a contribution of $1,000 towards the Council’s legal costs.2
[3] Mr Sowman appeals the decision declining the s 106 application on the grounds the Judge erred in his assessment of the gravity of the offending by taking into account factual matters not provided for in the summary of facts and relying on matters which were not proven beyond reasonable doubt. In the alternative, Mr Sowman appeals his sentence on the grounds the fine imposed was manifestly excessive with regard to comparable cases.
Factual background
[4] Mr Sowman is an employee of Marlborough Organics Ltd (Marlborough Organics). He is a former employee of Babich Wines Limited (Babich Wines).
1 Resource Management Act 1991, ss 15 and 339, maximum penalty $300,000.
2 Marlborough District Council v Sowman [2019] NZDC 25036 [Sentencing decision].
[5] In 2014, while Mr Sowman was an employee of Babich Wines, it was determined that Babich Wines would introduce a composting system to effectively use the large volume of grape marc produced from its winery located on the Echelon Vineyard in the Waihopai Valley, Marlborough. Echelon is one of several vineyards owned and operated by Babich Wines. Grape marc is a by-product of winemaking comprising of grape seeds and skin. The aim was to construct a grape marc pad to store the grape marc where it would turn into compost over time, and be redistributed to fertilize the vineyards.
[6] On behalf of Babich Wines, Mr Sowman engaged a local engineering firm to design and build the composting pad. Construction was completed in 2014. The pad was located on a terrace close to the Omaka River and three shallow groundwater bores. The bores provide the drinking water supply for six residential properties. The pad was first put to use following the 2015 harvest. There were no complaints at that time about contaminated bore water. Unfortunately, it transpired that the pad was not of sound construction and in early 2016 it began to leak.
[7] Mr Sowman ceased to be an employee of Babich Wines in January 2016, but when he did Marlborough Organics took on the role as contractor, with Mr Sowman undertaking the activities on its behalf.
[8] In May 2016 Marlborough District Council (the Council) received complaints from nearby properties reporting well water contamination. The Council inspected the Babich Wines site on 17 May 2016 and suspected the grape marc pad was the cause of the contamination. The site visit revealed ponding of grape marc leachate (a liquid by-product of grape marc) in the southern and western ends of the pad. The Council officers observed the leachate collection system was faulty as the sump was not lined and the outflow pipe discharged directly onto the land when the tank’s capacity was exceeded.
[9] Mr Reuben Fergusson, a compliance officer from the Council, contacted Mr Sowman on 20 May to outline the Council’s concerns. Mr Sowman told Mr Fergusson that he would pump leachate out of the sump that day and line the sump with polythene and to block the overflow pipe by the end of the following week. But
by 9 June, when the Council completed a second site visit, this work was still not completed. Council enforcement officers and a groundwater scientist observed an apparent increase in grape marc leachate ponding. The sump had still not been lined with polythene fully. By this stage the Council had received further complaints from residents. Water sampling results showed the level of contaminants in the water exceeded drinking water standards.3
[10] On 14 June the viticulture manager of Babich Wines’s Marlborough vineyards, Mr Bullivant, was contacted by the Council and assumed responsibility for managing the issue. He explained that he had not, before that point, been aware of any issues concerning the groundwater contamination.
[11] Council officers, accompanied by Mr Sowman and Mr Bullivant, undertook a further site visit on 27 June. By this stage the sump had been lined by polythene but officers observed that grape marc was being stored beyond the capacity of the pad. Further ponding of leachate was observed. It was agreed that improvements needed to be made as to how the grape marc was stored. Following this meeting Mr Bullivant made arrangements to wrap the grape marc and divert excess storm water in an attempt to prevent any further contamination.
[12] On 11 August the Council issued an abatement notice requiring Babich Wines to take steps to remove all grape marc and leachate from the property.
[13] On 8 September 2016 following significant Council investigation and testing, the source of the contamination was confirmed to be the defective grape marc composting pad. In total, all three bore water wells were contaminated. This affected the drinking supply for six residential properties. The wells did not recover sufficiently to meet drinking water standards until May 2017, over a year after the problem first emerged.
3 The manganese levels were at 1.03m per m3, when they should have been at 0.4m per m3 as provided by the Standards issued under the Health Act 1956.
[14] In November 2016 the Council charged Babich Wines and Mr Sowman under s 15 of the Resource Management Act 1991 (the RMA) for discharge of contaminants into the environment.
[15] Victim impact statements record the adverse effects of the water contamination, including slime in water tanks, odour, foul taste, clothing damage, inability to use the water for drinking, washing or cooking and the costs of sourcing an alternative water supply. During the period of contamination affected residents experienced frustration, anxiety and stress. On a more positive note, the statements recorded that residents found Babich Wines to be “responsible and helpful neighbours” in the aftermath of the incident. The victims reported that Babich Wines made contact with each affected resident and took action to deliver safe clean water to the affected residents at their own cost.
Procedural background and disputed facts
[16] Both defendants pleaded guilty to all charges on 26 June 2018. The defendants pleaded guilty on the basis of a summary of facts prepared by the Council for the purpose of a sentence indication sought by Babich Wines.
[17] Sentencing was then set down for 26 November. But Mr Sowman took issue with aspects of the summary of facts. On that basis, Mr Sowman’s sentencing was adjourned to allow for discussion with the Council to produce an agreed and updated summary of facts. Meanwhile Babich Wines applied for, and was granted, a discharge without conviction pursuant to s 106 of the Sentencing Act.4
[18] The Council and the appellant did not reach an agreed position on the summary of facts. The point of difference was one paragraph in the summary of facts concerning the nature and scope of Mr Sowman’s management responsibilities for the grape marc pad operation. The Council maintained that, at all material times, Mr Sowman was responsible for maintenance and operation of the pad, and was the Council’s main point of contact in relation to composting activities onsite from as early as May 2015. Mr Sowman maintained that the Council overstated his degree of responsibility. He
4 Marlborough District Council v Sowman [2018] NZDC 25069 [Babich Wines s 106 decision].
explained that, from 17 January 2016 he ceased to be a full-time employee of Babich Wines and became a part-time contractor. His responsibility for the pad was therefore on a more limited basis and shared equally with Babich Wines’s full time on-site employees.
[19] A disputed facts hearing was held on 1 and 2 August 2019 to determine this point of difference. The Judge heard evidence from eight witnesses as to the nature of Mr Sowman’s responsibilities at the time of the offending.
[20] In a lengthy judgment dated 20 September 2019 the Judge concluded that “the defendant was the sole person in a position of control over what was able to be done in regard to the discharge of contaminants from the grape marc pad during the relevant period”,5 but did not accept that Mr Sowman was the main point of contact for the Council in relation to composting activities as stated in the summary of facts:
[127] …While the evidence clearly establishes that was the de facto position, that is in a context I have described of a disorderly chain of command with the more logical choice of any formalised point of contact, Mr Bullivant, not having been proactively identified to the Council as having that role.
[128] As such it is inappropriate to treat the defendant as having had such a formal point of contact role when considering sentencing.
[21] The relevant paragraph of that summary of facts was amended to take into account the disputed facts hearing findings.
Decision under appeal
[22] After outlining the facts and the relevant sentencing principles, the Judge observed the bands set out in Waikato Regional Council v GA & BG Chick Ltd were of assistance albeit the bands were in relation to dairy effluent discharge.6
[23] Turning to a consideration of the culpability of the offending, the Judge observed the summary of facts revealed two distinct stages in the offending. From 29 February 2016 to the first complaint from residents in May 2016, Mr Sowman had
5 Marlborough District Council v Sowman [2019] NZDC 18485 [Disputed facts decision] at [117].
6 Waikato Regional Council v GA & BG Chick Ltd (2007) 14 ELRNZ 291.
no actual or imputed knowledge that anything was awry with the pad.7 The Judge accepted that his culpability for that period was very low. From early May 2016, however, Mr Sowman became aware that residents were impacted by contaminated water and suspected the pad as the cause. From this point Mr Sowman’s culpability was “increasingly elevated”.8 The Judge observed that Mr Sowman:9
(a)Had the opportunity to tell Mr Bullivant about the complaints from residents and the Council’s enquiries about the issues with the pad but did not do so,
(b)Did not take remedial action with regard to the sump despite having committed to the Council to do so, and
(c)Maintained effective control over the discharges and their impacts on people and disempowered those able to remediate the impacts.
[24] Overall the Judge found during the seven week period he displayed “a reckless disregard or deliberate unwillingness” to check whether the pad was the cause of the harm being suffered by residents.10 In terms of environmental impact, the Judge held there was a “moderately serious effect on the environment” given the adverse effects of contaminated water for the six affected residents and demand on Council investigative and public health resources.11
[25] The Judge concluded the offending fell properly within Band 2 of Chick and a starting point of $22,000 was appropriate.12 Discounts for Mr Sowman’s lack of prior convictions and guilty plea brought the end sentence to $18,500.13 It also appears the Judge made some discount for totality, ultimately ordering a fine of $18,000. The Judge also ordered Mr Sowman to pay solicitors’ scale costs of $1,000.
7 Sentencing decision, above n 2, at [68].
8 At [70].
9 At [71] – [74].
10 At [74].
11 At [76].
12 At [81] and [82].
13 At [89].
[26] Turning to the s 106 application, the Judge accepted that there “may well” be reputational consequences for Mr Sowman and his company, but the importance of deterrence overwhelmed the case for discharge.14 Overall the Judge was not satisfied that the direct and indirect consequences of a conviction would be all out of proportion to the gravity of the offence.15
Approach on appeal
[27] The appellant challenges two decisions of the Judge on appeal. The first is the Judge’s decision not to discharge the appellant without conviction under s 106. Secondly he challenges the sentence that the Judge imposed. These points involve different thresholds to be applied by this Court on appeal.
Approach to appeal concerning s 106
[28] Section 106 of the Sentencing Act 2002 provides that if a person who is charged with an offence is found or pleads guilty, the court “may discharge the offender without conviction, unless by any enactment applicable to the offence the court is required to impose a minimum sentence”. The application of s 106 is guided by s 107:
107 Guidance for discharge without conviction
The court must not discharge an offender without conviction unless the court is satisfied that the direct and indirect consequences of a conviction would be out of all proportion to the gravity of the offence.
[29] The Court of Appeal has addressed the required approach in the following terms:16
[11]It is settled that a court considering a discharge under s 106 of the Sentencing Act 2002 should follow a three-step process addressing the guidance given in s 107. These steps are:
(a)identification of the gravity of the particular offence, taking into account all aggravating and mitigating factors of the offending and the offender;
14 At [94].
15 At [94].
16 Prasad v R [2018] NZCA 537 (citations omitted).
(b)identification of the direct and indirect consequences of conviction; and
(c)a determination of whether those consequences are “out of all proportion” to the gravity of the offence.
Only if that threshold is met can the court move to consider the residual discretion under s 106. There must be a “real and appreciable” risk that any given consequence will happen. This standard recognises that the court is assessing the likelihood of something that may happen in the future.
[30] The appeal is brought under ss 231 and 248 of the Criminal Procedure Act 2011. An appeal against the refusal to grant a discharge without conviction is an appeal against conviction and sentence.17 The basis for determining an appeal against a refusal to grant a discharge without conviction is whether a miscarriage of justice has occurred:18
(a)by virtue of a material error by the sentencing judge in entering a conviction; or
(b)as a result of an error by the judge in applying the principles of discharging an offender without conviction under s 107 of the Sentencing Act 2002.
[31] The Court of Appeal in R v Hughes noted that such an appeal is not an appeal against the discretion of the Court.19 It is a matter of fact requiring judicial assessment and the discretionary power of the court to discharge without conviction arises only if the s 107 threshold has been met.20 Accordingly the normal appeal principles apply as set out in Austin, Nichols & Co Inc v Stichting Lodestar.21
17 Jackson v R [2016] NZCA 627 at [6]–[16].
18 At [12].
19 R v Hughes [2008] NZCA 546, [2009] 3 NZLR 222.
20 At [28].
21 Austin, Nichols & Co v Stichting Lodestar [2007] NZSC 103, [2008] 2 NZLR 141. This approach was confirmed in Brown v New Zealand Police [2019] NZHC 2348; and Sharma v New Zealand Police [2018] NZHC 2471.
Sentence appeal
[32] The appellant also challenges the sentence imposed by the Judge. This is a first appeal against sentence under s 244 of the Criminal Procedure Act. Under s 250, the appeal court must allow the appeal if satisfied that:
(a)For any reason, there is an error in the sentence imposed on conviction; and
(b)A different sentence should be imposed.
[33] A sentence appeal is an appeal against a discretion and only if there is an error of principle should the appellate court re-exercise the discretion.22 The focus is on the final sentence and whether that was in the available range, rather than the exact process by which it was reached.23 An appeal court should not engage in mere “tinkering”.24 The Court of Appeal has accepted, however that there may be some rare cases where “what has gone wrong is such as to require correction albeit the sentence imposed is within range”.25
Discharge without conviction appeal
Issue One: was the Judge entitled to take into account evidence from the disputed facts hearing?
[34] Mr Sowman’s first and primary ground of appeal is that the Judge’s assessment of culpability was based on facts he was not permitted to take into account.
[35] Ms Radich submits that the Judge placed heavy emphasis on the fact that in early May 2016 Mr Sowman was advised by affected bore owners that there was an issue with their water supply and they suspected discharge from the grape marc pad was the cause.26 Ms Radich submits there is no mention of any such meeting in the
22 B v R [2011] NZCA 331 at [9]; and Lawrence v R [2011] NZCA 272 at [11].
23 Ripia v R [2011] NZCA 101 at [15].
24 Bull v Police [2019] NZHC 1720 at [21]; Ripia v R [2011] NZCA 101 at [15]; Knedler v Commissioner of Inland Revenue [2017] NZHC 2888, (2017) 28 NZTC 23-044 at [16]; and Larkin v Ministry of Social Development [2015] NZHC 680 at [26].
25 Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36].
26 Sentencing decision, above n 2, at [24].
summary of facts and the Judge was not entitled to take it into account in assessing culpability.
[36] Section 24 of the Sentencing Act 2002 mandates the factual basis for sentencing. Facts relevant to sentencing can be drawn from the agreed summary of facts,27 facts essential to a guilty plea or finding,28 and disputed facts relevant to the sentencing process if proven to the required standards.29 In this case there was no trial as Mr Sowman pleaded guilty on the basis of the summary of facts. That summary of facts was amended following the Judge’s decision on the disputed facts.30 Departure from these principles is a material error on sentencing.31
[37] Evidence of the meeting with affected residents arose in the course of the disputed facts hearing. Three of the witnesses called referred to a meeting between Mr Sowman and the affected bore owners in early May 2016, prior to the Council first contacting Mr Sowman on 20 May.32 The Council called evidence about the meeting in the context of what the witnesses understood Mr Sowman’s role and responsibilities to be in relation to the pad.33 In concluding Mr Sowman had sole managerial responsibility for the operation of the pad the Judge relied, inter alia, on the May 2016 meeting.34 I note that the disputed facts judgment was substantial, running to 41 pages, although the ultimate conclusion affected only one paragraph of the summary of facts.
[38] Section 24(1)(a) provides the Judge is entitled to take into account “any fact disclosed by evidence at the trial”. Ms Besier for the respondent submits that the disputed facts hearing is a trial for the purpose of the section, referring to Haarhaus v
R.35 In Haarhaus the Court held that s 24(1)(a) encompasses evidence adduced at a
disputed fact hearing.36 Haarhaus, however, was determined prior to amendments to s 24(1)(a) by s 7 of the Sentencing Amendment Act (No 2) 2011. Those amendments
27 Sentencing Act 2002, s 24(1)(a).
28 Section 24(1)(b).
29 Section 24(2).
30 Disputed facts decision, above n 5.
31 See Page v New Zealand Police [2020] NZHC 904 at [34]–[36] and [38].
32 At [23], [80] and [83].
33 At [106].
34 At [114].
35 Haarhaus v R [2010] NZCA 41.
36 At [16].
removed the reference to “trial or hearing” in s 24(1)(a) to just refer to “trial”. Ms Radich argues that a disputed fact hearing is not a trial as its sole purpose is to determine whether a particular fact is material to sentencing. The respondent submits that, nevertheless, trial has a wide meaning as established by case law.
[39] I accept that the amendment made to s 24(1)(a) was not specifically directed to this issue, but was more simply a consequential amendment following the enactment of the Criminal Procedure Act 2011. But the operation of s 24 seems to me to be clear, particularly following its amendment. The facts upon which the defendant is sentenced are either those set out in the summary of facts, those disclosed by the evidence at trial, those agreed between the prosecutor and the defence, or those found following a disputed fact hearing. If there is a dispute about the facts, including a fact set out in the summary of facts, then that dispute can go to a disputed fact hearing under s 24(2) in accordance with the procedures in that sub-section. Those procedures involve identifying what fact or facts in dispute are, including identification of the importance that may be attached to the disputed matter (see s 24(2)(a)). A disputed fact hearing is not a “trial” for the purpose of s 24(1)(a).
[40] The findings of the Court following a disputed fact hearing are plainly relevant to sentencing, but not all evidence called at the disputed fact hearing necessarily becomes relevant. To do so may be procedurally unfair to a defendant who has not been given notice that this factual matter is in issue. The question of fact that may be considered and resolved at the disputed fact hearing is circumscribed by the procedural requirements of s 24(2). They contemplate a degree of particularity. Evidence called at that hearing is not the same as the evidence led at trial under s 24(1)(a). The gateway for considering the evidence called at a disputed fact hearing is s 24(2), not s 24(1)(a).
[41] This may involve an adaption to the approach taken in Haarhaus in light of the statutory amendment, but not a significant change. It is, of course, possible for disputed fact hearings to address wide ranging factual disputes such that the sentencing Judge’s reliance on that evidence would not be objectionable. The factual basis for sentencing proceeds in a realistic way. But that was not the case here as the matter in dispute was more carefully circumscribed, the Judge’s findings did not include findings on the factual matter in question, and the ultimate determination following
the disputed facts hearing was limited to the wording of one paragraph in the agreed statement of facts.
[42] There was a material error by the Judge here. It is apparent from the judgment that he proceeded on the basis that Mr Sowman’s receipt of the complaints by the bore owners was in the summary of facts. It was not. Rather it was evidence he became aware of because it was referred to during the disputed facts hearing. Relying on it was unfair to Mr Sowman as the disputed facts hearing did not proceed to resolve a dispute as to if and when Mr Sowman was informed of the issue concerning contamination of the bore water. Rather it was to resolve a different question of fact
— the extent of Mr Sowman’s overall responsibility for the management of the grape marc composting activities, and the maintenance and operation of the grape marc pad. Following the Judge’s findings on that point, the summary of facts was amended to make it consistent with the findings. I accept the Judge was not entitled to then rely on the evidence heard at the disputed fact hearing to replace those set out in the agreed summary of facts. I accordingly accept that there was an error by the Judge.
[43] But I do not accept that this means that the decision on the s 106 application was wrong, or the sentence imposed manifestly excessive. That is so for two reasons.
[44] First it is permissible for the Judge to draw inferences from the summary of facts.37 If the Judge had been strictly confined to the summary of facts then the following express statements of fact in the summary were material:
(a)That Mr Sowman’s responsibilities as employee and contractor included contracting the installation of the pad, management of the grape marc composting activities, and that until June 2016 he had responsibilities for the maintenance and operation of the grape marc pad.
37 R v Kinghorn [2014] NZCA 168 at [20] and [31]; Pokai v R [2014] NZCA 356 at [31]–[36].
(b)As a consequence of a visit in May 2015 the Council communicated its findings to Mr Sowman on 5 June 2015 and “Mr Sowman agreed to carry out an assessment of whether or not the pond was leaking”.38
(c)The 2016 harvest experienced more rainfall than the 2015 harvest and on 12 May 2016 the Council received the first complaint about contaminated ground water.
(d)On 17 May 2016 the Council visited and observed the grape marc storage, and the apparent deficiencies with the grape marc pad system.
(e)On 20 May the Council phoned Mr Sowman to outline its concerns following its visit and Mr Sowman agreed to take remedial action.
(f)That after a visit on 9 June following further complaints, and a further assessment, it was observed that the remedial steps had not all been taken.
(g)Following further complaints the Council contacted Mr David Bullivant of Babich Wines on 14 June 2016 who advised the Council that he was unaware of the issues with the contaminated ground water.
[45] On that basis it would have been open for the Court to proceed on the basis that Mr Sowman was responsible for the system, that he had been advised there was a potential issue in relation to leaking from as early as June 2015, that the system still leaked and caused significant contamination the following year, that he did not take all the steps he promised to take on 20 May, and that Babich Wines did not otherwise know about the issue until contacted on 14 June.
[46] It would appear, however, that the Judge has relied on the evidence at the disputed fact hearing to conclude that prior to May 2016 “I accept that I should recognise that you had no actual or imputed knowledge that anything was awry”.39 In
38 The “pond” being part of the leachate collection system for the grape marc pad.
39 Sentencing decision, above n 5, at [68].
part that may be because of his finding that it was “not a matter of common knowledge that grape marc leachate can have the impacts it had on groundwater”.40 These findings are in Mr Sowman’s favour. They could only have been based on material other than the summary of facts. So it seems to me that the Judge’s departure from the limitations of s 24 has cut both ways.
[47] To the extent that Ms Radich’s argument involves a complaint that the summary of facts did not squarely state that Mr Sowman did not draw Babich Wines’s attention to the problem when he became aware of it, and assumed responsibility for it himself, I do not accept the argument. That is the obvious inference from the statements in the summary of facts that Mr Sowman had responsibility for the operation and maintenance of the pad, and that when the Council contacted Babich Wines’s viticulture manager, Mr Bullivant, he informed the Council he had no knowledge of the contamination issue.
[48] The second point is that the summary of facts records that the Council contacted Mr Sowman about the neighbour’s complaints on 20 May. I acknowledge that is later than the “early May” finding. I accept that this date would mean the period where Mr Sowman assumed control of the problem without contacting Babich Wines would have been more like four than seven weeks. But I do not think the period of time is critical. What matters is that Mr Sowman did not respond appropriately and minimise the risks that were occurring. Whether Mr Sowman was first put on notice by the complaints in “early May” by the residents or the Council’s phone call on 20 May does not make a critical difference to his culpability. Either way, his failure to bring the matter to the attention of Mr Bullivant indicates a failure to properly respond to the issue, and led to the finding that there was an assumption of personal responsibility.
[49] For these reasons the Judge was entitled to conclude the offending was moderately serious and the assessment of the gravity for the purpose of s 106, and the sentence imposed, was not in error. I do not accept that there has been an error in assessing Mr Sowman’s culpability. To the extent the Judge went beyond the
40 At [38].
summary of facts he has not done so in a way that mischaracterises Mr Sowman’s culpability. The remaining question is whether the ultimate end sentence was manifestly excessive and whether the Judge was wrong not to order a discharge under s 106. Those are matters I turn to below.
Issue Two: Did the Judge err by failing to take into account further materials produced at sentencing?
[50] Turning to the second ground of appeal, Ms Radich submits the Judge erred in his s 106 assessment by failing to consider further materials provided by the appellant at sentencing. Ms Radich explains the Judge only referred to the statement of Mr White and did not consider information adduced from the appellant’s former employer or his colleague.
[51] At sentencing Mr Sowman produced a number of materials directed to the consequences of a conviction both personally and professionally. The Judge made reference to two of these — an affidavit from Mr Sowman himself, and a letter from Mr Jared White — but he did not make any reference to the affidavit from Mr Sowman’s brother, and three other statements from Timothy Johnson, Joseph Babich, and Bart Arnst. The Judge addressed what affidavits he would take into account as a preliminary question, and indicated he had no difficulty in taking into account the appellant’s affidavit, or the statement from Mr White. He then said he would not take into account an affidavit from Mr Besley because it went beyond the summary of facts. It may be that he intended to make the same finding in relation to the other statements, but he did not do so, and when assessing the application under s 106 stated that he only considered the appellant’s affidavit, and the statement given by Mr White.
[52] I accept that this could indicate that the Judge erred. I am not satisfied, however, that the additional affidavit evidence makes any real different to the analysis the Judge then undertook. For example Ms Radich refers to the following statement by Mr Arnst:
There is no doubt in my mind that John being convicted of these contamination offences will damage his reputation and credibility as a proponent of organic viticulture. It is not for me to say whether John deserves
that or not but I can say that it would be a great shame to our industry if John’s credibility and ability to continue his organics business were damaged. Organics is a necessary part of the sustainable management of our industry and John has a lot to contribute.
[53]Similar statements were made by Mr Johnson and Mr Babich.
[54] In applying the approach set out by the Court of Appeal, after identification of the seriousness of offending, and the detrimental effects arising from conviction, the critical matter is whether the consequences are out of all proportion to the gravity of the offence.41 The essential conclusion of the Judge was that it was not. The additional statements Ms Radich refers to make no meaningful difference to the assessment. It is apparent that there will likely be adverse effects for Mr Sowman as a consequence of the conviction. It will do reputational harm to him. But those adverse consequences appear to be proportionate. It damages his reputation for being environmentally sound, which is no doubt associated with his reputation in organic viticulture. But that reputational damage is not out of proportion to the offence he has committed.
[55] Again, therefore, any error that the Judge has made in failing to refer to the additional affidavit evidence does not affect the ultimate conclusion the Judge has reached. This ground of appeal is not made out.
Issue Three: Did the Judge err by treating the co-offenders differently?
[56] Babich Wines was granted a discharge without conviction. Ms Radich submits there is a “legal and logical fallacy” with the Judge’s conclusion that the appellant was more culpable than Babich Wines, relying on principal-agent theory and the parity principle.
[57] The RMA contemplates a principal may be strictly liable for the act of an agent.42 But the position is different at sentencing. The whole focus of the Sentencing Act is to carefully consider an offender’s individual circumstances and sentence accordingly.43 The parity principle presupposes that, all things being equal, co-
41 Jackson v R, above n 17. See discussion at [29] above.
42 Resource Management Act 1991, s 340.
43 Sentencing Act 2002, s 8.
offenders ought to receive the same sentence. But matters such as the relative involvement in the offence often justify different outcomes.
[58] The Judge considered the different positions of the co-defendant in his decision. He noted there were a number of material differences between Mr Sowman’s offending and his co-defendant:44
(a)Mr Sowman had knowledge of the risk but did not take steps to alleviate it. In contrast, as soon as Babich Wines became aware of the situation the company took immediate steps to prevent further contamination by covering the grape marc with silage wrap, diverting storm water to prevent overflow and sourcing an alternative water supply for the affected properties.
(b)Babich Wines had taken steps to remediate the residents’ suffering by contacting the residents individually, delivering bottled water, and paying for replacement water filtration systems.
(c)While Mr Sowman was remorseful he did not demonstrate the level of remorse as Babich Wines did as evidenced by its participation in restorative justice programmes.
[59] The Judge accepted that entry of a conviction would expose Babich Wines to a “significantly adverse export market reaction” at a scale that could jeopardise the company and, in turn, its employees.45 He concluded that the entry of a conviction would give rise to reputational damage all out of proportion to the gravity of the offending and granted the s 106 application.46
[60] The circumstances were different. There was no error in imposing different outcomes for the co-offenders.
44 Sentencing decision, above n 2, at [76], [92] and [94].
45 Babich Wines s 106 decision, above n 4, at [114]
46 At [115].
[61] I also observe that the appellant’s argument in this respect depends on the proposition that Babich Wines was rightly discharged under s 106. But the question of its discharge is not before this Court. The focus must simply be whether Mr Sowman should have been discharged, and I conclude that the Judge did not err in deciding that he should not.
Sentence appeal
[62] In the alternative the appellant submits the end sentence was manifestly excessive.
Issue One: Starting point appropriate?
[63] Ms Radich submits the Judge erred in considering the offending was moderately serious and adopting a starting point of $22,000. He says the offending is properly assessed as falling within the very low end of the relevant bands and the appropriate starting point was in the range of $0-$15,000.
[64] The Chick decision has provided guidance for the adoption of starting points for contaminant discharge offending under s 15 of the RMA.47 Band 1 identifies the least serious kind of offending as unintentional, one-off incidents as a result of system failure, with little to no effect on the environment.48 Band 2 is “moderately serious” offending involving unintentional but careless discharges usually of a recurring nature over a period of time.49 The offender is often reluctant to address the need for a safe system for contaminant disposal, resulting in delays in taking restorative action.50 There is little or moderate effect on the environment.51 The range expressed for the three bands were up to $15,000 for level 1, up to $30,000 for level 2, and more than
$30,000 for level 3.
[65] There are two factors that suggest that these ranges should not now be applied. The first is that it is now 13 years since Chick was decided. Secondly, as the Judge
47 Waikato Regional Council v GA & BG Chick Ltd, above n 6.
48 At [23].
49 At [25].
50 At [25].
51 At [25].
noted, the penalties under s 339(1) have now been increased from the $200,000 maximum initially set. For corporate defendants they are increased to $600,000. For individuals they are increased to $300,000. The previous maximum did not distinguish between corporate and individual defendants. This suggests there should be an overall increase in the levels of the financial maximums in each band. I note District Court decisions suggesting starting points for conduct within band 1 at
$30,000–$35,000.52 It also suggests that the penalties should generally be higher for
corporates than for individuals in each band.
[66] This is not an appropriate case for this Court to re-evaluate the bands set out in Chick, and what penalty ranges should be set for each range. The case has particular factual circumstances that make it unusual, many issues have been raised, and the hearing proceeded by way of telephone given the COVID-19 measures.
[67] In any event these bands should only be general guidelines. In Thurston v Manawatu-Whanganui Regional Council this Court conducted a review of RMA sentences.53 In addressing Chick Miller J held:
[50] As the Judge noted, the categories he identified were no more than a guide developed in pursuit of consistency. I observe such survey judgments facilitate consistency by causing sentences to cluster around the bands. Because they are simply a snapshot of final sentences imposed to a given date, they may inhibit the Court’s response to both developing trends in offending and evolving community norms. The latter may recently be reflected in an increase in the maximum fine of which the Court must in future cases take judicial notice.
[68] It seems to me that some care should now be taken in applying the bands in Chick, not only because the relevant penalties may now be regarded as outdated, but also because there are a wide range of considerations, including differences between corporate and individual responsibility that may make matters more complicated than the three bands in Chick. At [41] of Thurston Miller J set out considerations that will frequently assume relevance in pollution sentencing, and I endorse those considerations as potentially relevant in such cases.
52 Otago Regional Council v Bloem [2018] NZDC 16650; Waikato Regional Council v DB and AD Fullerton [2019] NZDC 23720. See Waikato Regional Council v Acorn Farms Ltd [2017] NZDC 18293 and cases referred to therein.
53 Thurston v Manawatu-Whanganui Regional Council HC Palmerston North CRI-2009-454-25, 27 August 2010 (footnotes omitted).
[69] The need for care is illustrated in the present case. The Judge put considerable emphasis on Mr Sowman’s failure to take prompt mitigation factors once the problem had been identified. Prior to that time he held that Mr Sowman had no actual or imputed knowledge that anything was awry. This factor moved the case from Chick band 1 to Chick band 2. Approaching the case with that emphasis may underestimate the significance of the pollution itself, and the need to hold those responsible accountable. Bands 1 and 2 of Chick may not capture all relevant considerations. The concept that polluters pay may have been a more significant factor in the present case, irrespective of the mitigation measures that Mr Sowman failed to take. Given that he had personal responsibility for engaging contractors to install the composting system and then responsibility for operating and maintaining a defective system, there is perhaps an argument that this aspect of the offending should have had greater emphasis even though this could be said to be a one-off failure. This was a moderately serious offending irrespective of the mitigation failures.
[70] It is, of course, Babich Wines who bear responsibility for the actions of Mr Sowman as its employee and contractor. The Judge also refers to the unclear systems and responsibilities. But Mr Sowman was a person with responsibility and was rightly sentenced on that basis.
[71] It was open for the Judge to impose the sentence that he did. Mr Sowman had responsibility for the installation, operation and maintenance of the defective system. He was then put on notice of a potential leak at the very latest by 20 May but did not bring it to the attention of supervisors until June. He delayed in taking all remedial steps to reduce the risk of contamination or further contamination. There was a moderately serious effect on the environment, with three water sources contaminated affecting the water supply for six residential properties for more than a year. The starting point of $22,000 is within range.
[72] Even if Chick is applied, and this case is treated as being in band 1, it would be in the upper end of band 1 and the Judge’s starting point would still have been within range if the Chick monetary amounts are adjusted for inflation and the increases in maximum penalty.
Issue Two: Discounts for mitigating factors
[73] The Judge discounted 15 per cent from the starting point to take into account Mr Sowman’s previous good record and guilty plea. Ms Radich submits the appellant pleaded guilty at an early opportunity and should have been awarded a full discount for guilty plea. The respondent submits a full discount was not appropriate as the appellant did not plead guilty at the earliest opportunity. Charges were first laid on 15 November 2016 but guilty pleas were not entered until after the sentence indication hearing on 26 June 2018. Ms Radich also submits the appellant ought to have been afforded a further 30 per cent discount to recognise:
(a)his participation in restorative justice,
(b)his record of previous good character and commitment to pioneering sustainable viticulture practices,
(c)his apology to affected parties, and
(d)remedial actions Babich Wines took on his behalf,
[74] I do not accept that the Judge made a material error in his assessments in this respect, or that the sentence is manifestly excessive.
[75] First it is apparent that the guilty plea was not entered at the first available opportunity. Indeed there was some delay before the guilty plea was entered. There is nothing to suggest that the delay between November 2016 and June 2018 can be attributable to the prosecutor, or other external factors. A reduced discount in relation to a delay would accordingly be appropriate.
[76] Further, whilst Mr Sowman has indicated that he apologises for his conduct, and attended a restorative justice conference, it is equally apparent that his response is not as apologetic as it could have been. The position can be contrasted with the actions taken by Babich Wines which, as soon as it was aware of the issue, took immediate steps to remedy the problem and assist the bore owners.
[77] It seems to me that an overall deduction of 15 per cent taking into account all the relevant considerations, including the guilty plea, was appropriate.
Result
[78]Accordingly for the reasons outlined above the appeal is dismissed.
Cooke J
Solicitors:
Radich Law, Blenheim for the Appellant
Tasman Law Ltd, Richmond for the Respondent
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