Sullivan v Taranaki Regional Council
[2013] NZHC 1301
•4 June 2013
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH] REGISTRY
CRI-2012-443-34 [2013] NZHC 1301
BETWEEN PETER JUDE SULLIVAN Appellant
AND TARANAKI REGIONAL COUNCIL
respondent
Hearing: 13 February 2013
Appearances: P J Mooney for appellant
K J L de Silva for respondent
Judgment: 4 June 2013
JUDGMENT OF ALLAN J
In accordance with r 11.5 I direct that the Registrar endorse this judgment with the delivery time of 4.30 pm on Tuesday 4 June 2013
Solicitors:
Mooney & Webb, New Plymouth
Karenza de Silva, North Shore City
SULLIVAN v TARANAKI REGIONAL COUNCIL [2013] NZHC 1301 [4 June 2013]
[1] Mr Sullivan is the owner of a dairy farm property situated at Eltham Road, Kaponga. At all material times the dairy farming operation was under the immediate control of a sharemilker, Mr Bakewell.
[2] On 20 September 2011, an officer of the respondent, Mr Cooper, inspected the farm next to Mr Sullivan. He saw that the Hupati Stream was green with dairy effluent. The effluent was traced back to Mr Sullivan’s property.
[3] Further investigations followed. Ultimately, Mr Sullivan was charged with four offences under the Resource Management Act 1991 (RMA). There were two discharges of effluent, the first being from a holding pond and the second from a travelling irrigator.
[4] Separate charges were laid in respect of the two discharges, and Mr Sullivan was separately charged with discharging a contaminant and with permitting the discharge. There were four charges in all, the charges of permitting the discharge being laid in the alternative.
[5] Mr Sullivan defended all of the charges. They were heard by Judge Dwyer in the New Plymouth District Court. On 9 August 2012, the Judge delivered an extensive oral judgment in which he found Mr Sullivan guilty of the direct offences of discharging a contaminant in breach of s 15(1)(b) of the RMA.1
[6] Mr Sullivan was subsequently fined $30,000 for each breach, together with solicitor’s costs in accordance with the Costs in Criminal Cases Regulations 1987, and Court costs of $132.89. The Judge directed that in each the fines, less 10% Crown deduction, were to be paid to the respondent.2
[7] Mr Sullivan now appeals against both conviction and sentence.
1 Taranaki Regional Council v Sullivan DC New Plymouth CRI-2012-021-267, 9 August 2012.
2 Taranaki Regional Council v Sullivan DC New Plymouth CRI-2012-021-267, 21 August 2012.
Factual background
[8] Much of the relevant factual matrix is undisputed, although some matters of detail were contentious. I adopt the factual summary succinctly set out in Judge Dwyer’s judgment.
[7] Mr Sullivan’s farm contains approximately 118 hectares. On 20
September 2011, it was milking about 580 cows and heifers. Mr Sullivan holds a resource consent authorising spray irrigation of effluent from the farm dairy shed and yards onto land.
[8] Although Mr Sullivan lives on the farm he does not manage the day-to-day milking operation. On 20 September 2011, that was being done by a sharemilker Glendon Bakewell, under a variable order sharemilking agreement dated 2 March 2011 (the sharemilking agreement). That is tab 12 in exhibit 1. Mr Bakewell had commenced working on the property under the sharemilking agreement on 1 June 2011. The sharemilking agreement is in standard form and is a comprehensive document. The evidence I heard established that the parties discussed its provisions in detail as part of the signing process.
[9] Among the matters covered by the sharemilking agreement was the farm effluent system. The sharemilking agreement provided (in summary) that Mr Sullivan was to obtain any necessary resource consents for operation of the effluent system and to provide the system itself. Mr Bakewell was to operate the system in an efficient and workmanlike manner.
[10] The effluent system contains two effluent ponds which hold effluent from the dairy shed and an adjacent feed pad. The first pond is the primary pond with the second pond providing overflow capacity when the first pond is full. Effluent is pumped by a floating pump in the first pond out onto the paddocks of the farm and distributed by spray irrigator onto the paddocks.
[11] Mr Sullivan produced a copy of a farm layout plan which identified the paddocks available for spray irrigation. A copy of this plan was given to Mr Bakewell when he started on the farm. Mr Sullivan’s resource consent required that he had at least 20.25 hectares available for spray irrigation. Although there was some disagreement between Mr Sullivan and Mr Bakewell as to the precise figure, there is little doubt that there were at least
30 hectares available in fact and possibly more. I understand that this system has been in place since 2002 or 2003 when Mr Sullivan established the dairy farm.
[12] On 20 September 2011, Mr J P Cooper, a Council investigating officer, was inspecting the farm next to Mr Sullivan’s. He saw that the Hupati Stream was green with dairy effluent. He traced the effluent back to Mr Sullivan’s property. Mr Cooper discovered that dairy effluent was entering the stream from two sources on the Sullivan farm:
The travelling irrigator was operating in one of the farm paddocks which was saturated. Effluent from the irrigator was travelling over land and into the stream;
Additionally, the effluent ponds near the dairy shed were found to be full. The first pond was overtopping into the second pond and the second pond in turn was overtopping and flowing into the stream which was only seven metres away.
[13] 20 September 2011 was part of a particularly wet period. All of the witnesses agreed on that. Mr Sullivan’s exhibit A was a copy of a Council record of rainfall at Dawson Falls, about 10km from the farm, which the witnesses agreed would provide an appropriate comparison of the extent but not of the precise volumes of rain at the farm. The record shows a period of heavy rainfall which extended from 11 to 19 September 2011.
The issues
[9] Mr Mooney advances two grounds of appeal against conviction. First, he contends that Judge Dwyer incorrectly applied the relevant test under s 340(2)(a)(i)(A) of the RMA, which affords a positive defence to a defendant if certain requirements are met. Second, he argues that, in any event, the learned Judge’s decision was against the weight of evidence.
[10] The outcome of Mr Mooney’s first argument necessarily bears upon a consideration of the second.
[11] In respect of the appeal against sentence, Mr Mooney argues that the fines were too high, having regard to the extent of Mr Sullivan’s culpability, and that there ought to have been a discount to reflect the disparity between Mr Sullivan and Mr Bakewell, who was dealt with by way of infringement notice, and ultimately paid an infringement fee of $1,500. On those grounds, Mr Mooney contends that the fines were manifestly excessive.
Scope of the appellant’s obligations
[12] It was not disputed before Judge Dwyer that the discharges constituted a breach of the terms of Mr Sullivan’s resource consent and of s 15(1)(b) of the RMA. A breach of s 15(1)(b) is a strict liability offence by virtue of s 341 of the RMA, which provides that in any prosecution for an offence of contravening s 15, it is not necessary to prove that the defendant intended to commit the offence.
[13] Although Mr Sullivan was not engaged in the day to day operation of the dairy farm, he was caught by s 340 of the RMA 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,—
(i) in the case of a natural person (including a partner in a firm),—
(A) that he or she did not know, and could not reasonably be expected to have known, that the offence was to be or was being committed; or
(B) that he or she 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.
[14] It is common ground that although Mr Sullivan had delegated management of the dairy effluent system to Mr Bakewell under the sharemilking agreement and it was Mr Bakewell who was operating that system on 20 September 2011, Mr Sullivan might nevertheless be liable for the offending under s 340(2)(a)(1)(A) of the RMA.
[15] Section 340(2)(b) requires a defendant to prove that he took all reasonable steps to remedy the effects of the offence. Judge Dwyer considered that Mr Sullivan had met that part of the test.
[16] Mr Sullivan’s case in the District Court was that he did not know that the events giving rise to liability were occurring, and that he could not reasonably be
expected to know that they were occurring. It is not disputed that the obligation of establishing the statutory defence under s 340 lies with Mr Sullivan by virtue of s
67(8) of the Summary Proceedings Act 1957. The burden of proof is on the balance of probabilities.
[17] Judge Dwyer reviewed the evidence at length and then summarised his findings as follows:
[62] I now turn to Mr Sullivan’s defence in light of those findings. I accept that he did not actually know that the offence was being committed on 20 September 2011. That is because he had not checked the operation of the effluent system by Mr Bakewell on that day. I do not accept, however, that he could not reasonably have been expected to know that the offence was being committed. It was entirely foreseeable that operation of the effluent system could give rise to an offence during wet periods. Mr Bakewell was operating an effluent system with the deficiencies which I have identified, at a time of sustained heavy rainfall when the ponds were beyond their holding capacity. Effluent was overflowing from the second holding pond, even though he was irrigating.
[63] Mr Sullivan took no steps whatever in the period between 1 June
2011 when Mr Bakewell commenced on the farm, up until 20 September
2011, to check on Mr Bakewell’s operation of the system, whether he was
doing things properly and whether everything was in order with the system. Mr Sullivan acknowledged that he gave Mr Bakewell no training but simply expected him to know what to do. Mr Bakewell was a new worker on the farm. Whatever Mr Sullivan’s expectations may have been, he should have been checking Mr Bakewell’s work. He did nothing.
[64] Even more fundamental than that, Mr Sullivan was the farm owner and holder of the resource consent authorising the discharge of effluent from the ponds to land. He is responsible to ensure that the discharge of effluent is being undertaken properly. Although he might delegate operation of the effluent system to someone else, the obligation to comply with Resource Management Act requirements rests with him. Nevertheless, not once during this period of extremely wet weather did Mr Sullivan go and check on the state of the ponds or the state of the paddocks onto which effluent was being discharged. That was notwithstanding that on 2 September he had been given an inspection notice by Mr Crofsky which indicated that there were issues with the capacity of the second pond and operation of the travelling irrigator. After that there was a period of sustained heavy rainfall in mid-September.
[65] Mr Sullivan should have checked what was happening. If he had taken any steps whatever to check the state and operation of the system over this period, the potential for non-complying discharges would have been readily apparent. He could reasonably be expected to have known that such a discharge might occur. His own evidence establishes a total absence of management on his part.
[66] Mr Sullivan has failed to make out the defence contained in s
340(2)(a)(i)(A) by an overwhelming margin. I find that he is guilty of the offences as charged. I consider that the consequence of application of a
ss 340(1) and 341 is that Mr Sullivan is guilty of the direct offences of
discharging in breach of s 15(1)(b) rather than the offence of permitting such breaches as he has been charged with in the alternative. I leave it to counsel to address that matter on sentencing.
[18] Restating the Judge’s findings slightly, his train of reasoning was this:
[a] Mr Sullivan was the farm owner and holder of the resource consent authorising the discharge of effluent from the ponds to land;
[b] He was therefore responsible to ensure that the discharge of effluent was being undertaken properly;
[c] Although he was entitled to delegate operation of the effluent system to someone else, an obligation to comply with the RMA remained with him;
[d] Nevertheless, during a period of extremely wet weather, Mr Sullivan failed to check on the state of the ponds or the state of the paddocks onto which effluent was being discharged, notwithstanding an inspection notice by an officer of the respondent indicated that there had been issues with the capacity of the second pond and the operation of the travelling irrigator just two weeks earlier;
[e] Mr Sullivan took no steps during the period between 1 June and 20
September 2011 to check on Mr Bakewell’s operation of the effluent system; he had given Mr Bakewell no training but simply expected him to know what to do. Mr Sullivan did not actually know what was occurring on 20 September, because he had taken no steps to check the effluent system by Mr Bakewell on that day. The effluent system had certain identified deficiencies of which Mr Sullivan knew or ought to have been aware, and he should have checked on the system’s operation at the time;
[f] If Mr Sullivan had taken any steps whatever to check the state and operation of the system over the winter period and in particular during the period of heavy rainfall over the previous week, the potential for non-complying discharges would have been readily apparent to him.
[19] A determination of Mr Sullivan’s criminal culpability had to have regard to the factual circumstances as they existed at the time. There can be no quarrel with that submission, advanced by Mr Mooney. But Judge Dwyer did conduct a careful review of the facts, and it cannot seriously be suggested that he somehow reached a conclusion without regard to events as they unfolded at the relevant time.
[20] At the heart of Mr Mooney’s argument is the proposition that the Judge treated the defence as requiring Mr Sullivan to establish on the balance of probabilities that he “should not reasonably be expected” to have known what was occurring rather than “could not reasonably be expected”. In other words, Mr Mooney submits, the issue is whether Mr Sullivan, having established his system and placed Mr Bakewell in charge of it, was put on inquiry. Mr Mooney contends that only if something was brought to the appellant’s attention, which put him on notice that an infringement was occurring, did any duty to act rest upon him.
[21] He accepts that the appellant was not entitled to rely on a state of wilful blindness, but beyond that he was entitled to assume that all was well until put on notice that it was not. In this case, Mr Mooney argues, there was nothing to put Mr Sullivan on notice.
[22] In my view, the construction of s 340 advocated by Mr Mooney places a burden on the appellant that is altogether too light. It places little if any weight upon the fact that Mr Sullivan is the owner of the dairy farm and the holder of the resource consent. It would result in farm owners facing a lower risk of criminal liability if they stepped back from any active role in the management of the farm. By so doing, they would lessen the risk of being put on inquiry. Moreover, the appellant’s argument flies in the face of the legislative purpose of the enactment.
[23] The purpose of the legislation is plain. It is 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.
[24] Judge Whiting, sitting in the Environment Court, explained the legal responsibility of farm owners accurately and succinctly in Northland Regional Council v Pinney.3
[54] First; the evidence incontrovertibly establishes; that Mr Pinney was the owner of the farm and the holder of the resource consent. As such it was his prime responsibility to ensure that the effluent system was appropriately constructed and managed. As such he had the authority to control the operation; and if necessary; to investigate and take appropriate investigative measures,
…
[59] Owners of dairy farm properties cannot lightly escape their responsibilities by a contract of employment 01' agency. They are responsible for the infrastructure, which includes any effluent disposal systems. They hold any resource consents which are required to operate the system, As the owner and holder of any resource consent, they should be aware of the consequences of an effluent system that is inadequate, or which is not operated appropriately. As the owner, they have the authority to intervene. They have the responsibility to intervene.
[60] Mr Pinney was not the person who placed the irrigator in either Position 1 or Position 2. He was not the person who turned it on. But those actions by a third person do not break the causal link, which is the awareness of facts from which a reasonable person should have recognised that a discharge could occur and thus required appropriate intervention.
[25] Mr Mooney reminds the Court that it is necessary for the respondent to prove that Mr Sullivan “discharged” the contaminant so there must be a causal link between the person charged and the discharge itself. But that is a question of fact in each case.4 In this case it can hardly be contended that Mr Sullivan has not discharged the contaminant, subject to his entitlement to raise a positive defence because, as the farm owner and holder of the resource consent, he has engaged through his sharemilker, in an activity which has resulted in the discharge of the
contaminant.5
3 Northland Regional Council v Pinney DC Whangarei CRN 0902-7500764 18 March 2011.
4 McKnight v NZ Biogas Industries Ltd [1994] 2 NZLR 664 at 670-671.
5 Union Steamship Co of NZ Ltd v Northland Harbour Board [1980] 1 NZLR 273.
[26] In my view, Judge Dwyer, who has considerable experience in this field, applied the right test. I reject Mr Mooney’s argument to the contrary.
[27] I should mention that I do not regard Crafar v Waikato Regional Council,6 as of any significant assistance. In that case, the appellants had been charged with “permitting” an unlawful discharge. Different considerations arise there.
The appellant’s conduct
[28] Mr Mooney submits that the following matters are of special significance:
[a] The resource consent had been in operation since 2002 and apart from the occasional mechanical problem there had been no difficulties with any overflowing ponds or discharges into streams;
[b] The Regional Council had inspected the farm at least annually since the issuing of the consent in 2002, and had never given any specific direction other than making some general observations;
[c] Mr Bakewell had never communicated any particular problems with the effluent system, although he did communicate problems with matters other than effluent;
[d] Mr Bakewell did not advise Mr Sullivan of any specific problems with the effluent during September 2011, or indeed at any other time;
[e] Mr Bakewell accepted that he had made a mistake when he chose to use the irrigator on paddock 29, when he could have chosen a more appropriate paddock;
[f] Mr Bakewell accepted that he had not been operating the pump 24 hours a day during periods of high rainfall in order to bring the pond
levels down;
6 Crafar v Waikato Regional Council HC Hamilton CRI 2009-419-67, 13 September 2010.
[g] Both before and after 20 September 2011, the system had been able to deal with periods of heavy rainfall.
[29] Accordingly Mr Mooney submits, nothing had been brought to Mr Sullivan’s attention that should have alerted him to the risk of effluent contamination. In other words, he had not been put on inquiry, to use Mr Mooney’s expression.
[30] I will comment briefly on the various points raised by Mr Mooney. As to the system’s previous history, it is relevant to note that the appellant’s evidence that there had been no previous difficulties must be read subject to his concession that he did not himself check the ponds at all between 1 June 2011 (the date of Mr Bakewell’s sharemilking agreement) and the date of the overflow on
20 September 2011, so it is difficult to see how he would have known whether there had been previous problems during that period. Mr Bakewell says that there had been overflows from the holding pond on multiple occasions during the period.
[31] Council inspections occur annually. There was evidence of three previous incidents of non-compliance (some overflows in September 2001 and November
2005 and effluent discharge when a pipe came apart from a join in April 2006). There was therefore evidence upon which the learned Judge was able to conclude that the system had not been trouble free prior to 20 September.
[32] Mr Mooney relies also on the absence of formal directions from the Council following annual inspections. The Council issued typed inspection notices to Mr Sullivan (though interestingly, not to Mr Bakewell), containing a record of what was found on inspections. As Ms de Silva points out, the terminology in the inspection notices is not confrontational, but there are suggestions which ought properly to be read as directions. For example, on 2 February 2011, the expression:
Please ensure that there at least 1m of freeboard at all times. Recommend the second pond is fully emptied to ensure that there is sufficient capacity if first pond overflows.
may properly be seen as a direction in respect of the operation of the system for the future, and a recommendation to deepen a pond on 2 September 2011 (just before the
relevant incident) might also be seen as a direction. At the very least of course, it put
Mr Sullivan on inquiry.
[33] Mr Mooney relies on the absence of clear advice by Mr Bakewell to Mr Sullivan of the existence of prior problems. However, Mr Bakewell gave evidence in cross-examination to the effect that he thought that Mr Sullivan was aware of the problems with the system because Mr Sullivan had seen them at first hand.
[34] There was a fundamental dispute between these two witnesses as to the extent to which Mr Sullivan did inspect the farm and the effluent system in particular. He operated a transport business full time from another point on the farm. Moreover, he said he suffered from arthritis which prevented him from walking long distances, particularly across farm land.
[35] Mr Bakewell said in evidence that Mr Sullivan was often in the dairy shed and near the effluent system. Mr Sullivan said he was not. But the point is that it was up to Mr Sullivan to take steps to ensure that he was up to date with the state of the system.
[36] Mr Mooney’s point about Mr Bakewell’s decision to irrigate on paddock 29 is of limited weight. The evidence was that all of the paddocks were saturated as a result of very heavy rainfall during the preceding week. Moreover, Mr Sullivan acknowledged in cross-examination that he had included paddock 29 in a plan he had earlier given to Mr Bakewell of paddocks that could be used for irrigation purposes.
[37] Likewise, the fact that Mr Bakewell had accepted that he had not been operating the irrigator 24 hours a day was of very limited weight. The Judge accepted Mr Bakewell’s evidence that he was under threat from Mr Sullivan that if he pumped the ponds too low and caused damage to the pumps or the stirrer, then he would have to make good the damage.
[38] In my view, this material even on an assessment most favourable to the appellant, does not come close to exempting Mr Sullivan from responsibility. To put matters in another way, it does not establish that Mr Sullivan could not reasonably be expected to have known about what was occurring on 20 September 2011.
Verdict against the weight of evidence
[39] As a second ground of appeal, Mr Mooney submits that Judge Dwyer made a number of unjustified factual findings which combined to produce the wrong outcome. Had the Judge considered and weighed the evidence properly, then he ought to have been satisfied that the appellant had made out the defence under s 340.
[40] I will discuss these matters briefly but observe that Mr Mooney’s argument appears to be premised upon the success of his first argument, which I have rejected. In other words, he takes a much narrower view of the appellant’s obligations than I consider is warranted by the statute and the authorities. Some of the matters relied upon by the appellant have already been discussed above to some extent. There is a degree of overlap.
[41] Mr Mooney’s first point concerns the extent to which Mr Sullivan was physically present at times in the vicinity of the dairy sheds, the ponds and the effluent system. There was evidence to the effect that, although Mr Sullivan drove each day from his house on the farm to his transport yard at a different point on the farm, his route did not pass particularly close to the relevant effluent infrastructure. Occasionally he would go to a slightly closer point on the farm to assist his wife with the rearing of calves.
[42] But as Ms de Silva submits, nothing significant turns on Mr Sullivan’s route, or upon whether his business took him near the effluent ponds on any particular occasion. The real point is that the appellant did not check on Mr Bakewell’s management of the effluent system at any point between early June and
20 September 2011, and did not check the state of the ponds or the paddocks even after Mr Crofsky (an officer of the respondent) met Mr Sullivan on 2 September
2011 and gave him an inspection notice recommending that the second pond be deepened to provide extra holding capacity.
[43] Mr Mooney’s second point concerns the capacity of the ponds. There was a great deal of evidence about the effective carrying capacity of the two ponds. A point of considerable disagreement was the extent to which the bottom of the ponds had been permitted to rise by the natural deposit of silt or sand. Evidence from the respondent suggested that a substantial contribution to the accretion came from loamy soil carried by cows from the paddocks to the milking sheds and then washed into the ponds.
[44] The appellant, on the other hand, contended that to the extent that there was silt at the bottom of the ponds (so reducing their carrying capacity), it consisted mostly of material worn away from the sides of the ponds. If that was so then there was no net decrease in pond capacity because the loss of depth would be made up by increased width. Mr Bakewell tended to side with the appellant on this point.
[45] The presence or otherwise of silt or sand in the ponds was related to another question as to whether there should have been a sand trap. In my view, the importance of this issue, which occupied much of the hearing time in the District Court, has been over-emphasised by Mr Mooney. The real point is that when climatic conditions placed the effluent system under the greatest strain it could not cope. That may in part have been because the depth of the ponds had been compromised by the deposit of silt or other materials. In my view the Judge was well entitled to conclude that there was a substantial amount of silt or sand at the bottom of the ponds.
[46] Mr Mooney’s fourth point concerns the effect of ground water, chiefly stormwater, which the Judge held would go into the effluent pond system, thus reducing its holding capacity. Mr Mooney engaged in certain arithmetical calculations designed to show that even heavy rain would produce only limited quantities of stormwater, which could be removed by pumping over a limited period. He may well be right, but of course this point on its own was not intended by the Judge to have determinative effect. Indeed, it is obvious that he regarded the
stormwater point as only one of a number of inputs that would have made management of the effluent system “ …at the least, challenging during this very wet period”.7
[47] The Judge was there talking about the combined effect of stormwater and ground water, which is Mr Mooney’s fifth point. The ground water point was based on evidence about the existence of a spring on the farm not far from the effluent system. As Mr Mooney submits, there is no evidence as to the volume or effect of the ground water, but the Judge was perfectly entitled to take evidence about the spring into account in a general way, along with the stormwater evidence, in reaching the views he expressed.
[48] Finally there is the issue of 24 hour pumping. Mr Mooney submits that Judge Dwyer has either misunderstood or given inappropriate weight to the evidence about the need to use the irrigator in order to keep the ponds at an appropriate level. The Judge said:8
In addition to the systematic problems which I have identified there are operational problems which make management of the system challenging. The most obvious of these is the need to irrigate if the ponds are full at times of heavy rainfall. This was what was happening on 20 September. Mr Sullivan acknowledged that Mr Bakewell probably had no option but to do so. Although Mr Sullivan tried to fudge the matter somewhat, it was clear that on occasions it was the practice to pump 24 hours a day to stop the ponds from overflowing, and Mr Bakewell was told to do so, if necessary, by Mr Sullivan. Irrespective of the conditions of resource consent this practice seems contrary to common sense and a recipe for disaster.
[49] Mr Mooney submits that Judge Dwyer was wrong to hold that Mr Bakewell was instructed by Mr Sullivan to pump for 24 hours a day if the ponds were full and it was raining heavily.
[50] In evidence, Mr Sullivan said:
MS DE SILVA: Right, now he said when he gave evidence that there were no written instructions or procedures or written procedures about the effluent system. So you agree with that? …That’s right.
7 At [57].
8 At [59].
And he said that you didn’t give him any training on how to manage the effluent system.… No ‘cos he said he knew what he was doing. He’d run this other one and it was very difficult to work and he said, ‘This is easy’.
Okay. So you said when you gave evidence this morning that you told Mr Bakewell during heavy rain he needs to keep the pond level down, need to keep the irrigator running? … That’s correct.
And Mr Bakewell said a similar thing. He said that you told him that in the spring the effluent irrigation system may need to be running for 24 hours per day... Per day, yep.
Right so you agree, you agree on something - … Not, not all the time but yeah, like I say when it needed to be, you needed to make sure you had that (inaudible) in case we got more heavier events of rain.
[51] In my opinion this passage justifies the Judge’s findings in two respects:
[a] It confirms the fact that Mr Bakewell got no effective instruction on the structure and operation of the effluent system. He was simply left to his own devices. That was confirmed by Mr Sullivan at other points in his evidence;
[b] Mr Bakewell was instructed to pump virtually 24 hours a day even in periods of heavy rain if the ponds were full (although I accept that there was other evidence that it was more desirable to pump at times when conditions were dry and the paddocks more able to accept the effluent).
[52] I do not consider that the Judge has misunderstood the evidence at all. On the contrary, I consider that he has understood it perfectly well as is evident from the carefully structured and coherent oral judgment that he delivered within a day or two of the hearing. There is no substance in Mr Mooney’s argument as to the weight of evidence.
Appeal against sentence
Introduction
[53] Mr Sullivan appeals against his sentence. On his behalf, Mr Mooney argues that the fines imposed were manifestly excessive, and further that the learned Judge
failed to have regard to the need to preserve an appropriate measure of parity between the penalties imposed on Mr Sullivan on the one hand and Mr Bakewell on the other.
The sentencing decision
[54] Judge Dwyer’s sentencing remarks were extensive and detailed.9 After traversing the facts and general sentencing principles, he referred to Waikato Regional Council v GA & BG Chick Ltd.10 There, Judge Whiting analysed the sentencing cases in some detail and proposed certain guidelines for the classification of levels of culpability in dairy contamination cases. Most sentencing Judges have subsequently referred to the Chick decision with approval.
[55] Judge Whiting identified three separate levels.11 The least serious was level one which covered cases of offending which was unintentional and resulted in one- off incidents occurring as the result of a system failure with little or no effect on the environment. In such cases the Judge suggested a starting point of up to $15,000.
[56] Level two covers moderately serious cases involving unintentional but careless discharges, usually of a recurring nature over a period of time, or of incidents arising from the malfunction of different parts of a system. Culpability often arises from a reluctance to address the need for a safe system of effluent disposal. In such cases there will be little, or no more than moderate, effect on the environment. A starting point of $15,000 to $30,000 will be appropriate.
[57] Level three covers the most serious cases involving deliberate offending or at least “a real want of care”. Such cases often arise from large plural discharges over time or a large one-off event. These cases can expose a disregard by the offender for the effects on the environment. Starting points will ordinarily be in excess of
$30,000.
9 Taranaki Regional Council v Sullivan DC New Plymouth CRI-021-267, 21 August 2012.
10 Waikato Regional Council v GA & BG Chick Ltd (2007) 14 ELRNZ 291 (DC).
11 At [24]-[29].
[58] Judge Dwyer noted that the level of contamination in the Hupati Stream would have overwhelmed the capacity of natural processes and functions within the stream for a distance exceeding 700 metres downstream. He accepted that, considered in isolation, the discharge was almost certainly minor in its effect on major downstream water bodies, by reason of dilution and distance. However, he considered that he was obliged to take into account the cumulative effects of individual incidents of dairy contamination and not only the particular case before him. In other words, there had to be an element of deterrence and accountability in the sentencing process.
[59] Judge Dwyer noted that the maximum penalty for each offence was a fine of
$300,000, or a term of up to two years imprisonment, and that the severity of those penalties indicated that Parliament had determined that environmental offending was potentially very serious. The penalties had increased substantially just two years earlier, as Mackenzie J noted in Yates v Taranaki Regional Council.12 The increase in the penalties, together with a clear pattern of increasing concern as to the seriousness of this type of offending in various cited sentencing authorities,
demonstrate the need for a focus on deterrence in sentencing for offences such as this.
[60] The Judge noted that Mr Mooney had submitted that the offending fell into the least serious category of offending identified in Chick and that Ms de Silva for the respondent suggested that it fell into the most serious band. Judge Dwyer said he had been referred to a number of other sentencing cases, and that he was obliged to have regard to the trend of authority. However, he indicated that comparisons were not always easy in dairy effluent offending, because a range of factors influenced the
seriousness of offending in a given case. Those factors include:
The size of the herd;
The duration of the discharge;
Culpability as between farm owner and farm worker;
12 Yates v Taranaki Regional Council HC New Plymouth CRI-2010-443-08, 14 May 2010 at [15].
The cause of the discharge; Discernibility of effect;
The nature of the receiving environment;
Past record, abatement notices and the like.
[61] The Judge considered that the effects of the unlawful discharge were very serious, but only for a short distance downstream of the discharge point. He was unable to quantify the period of time during which the effects would be measurable, but rejected the submission that the effects were only moderate, as Mr Mooney had suggested. Judge Dwyer considered that they were more than moderate for at least a short period of space and time.
[62] In considering further relevant factors, the Judge reiterated a point made in his earlier liability judgment. He said that a farm owner has at least three
obligations:
He must ensure that there is a properly functioning effluent system in place and that the worker knows how to use it, particularly if there are
idiosyncracies in the system as there were in this case;
He must acquaint the worker with the terms of any resource consent or the rules in the regional council plan which control the discharge of
effluent;
He must supervise the worker’s operation of the system. That did not require the owner to be on the farm every day, but it did require that there is a system in place for checking that things are done properly and that the owner does check on a regular basis that everything is in order.
[63] Judge Dwyer observed that these were requirements dictated by “simple common sense rather than legal principles”. He said that in this case there was one factor which overwhelmingly came into play and that was Mr Sullivan’s lack of supervision of Mr Bakewell’s management of the effluent system.
[64] The Judge noted that in light of the deficiencies identified by a Council inspector on 2 September (the second pond closer to the stream needed deepening and the irrigator appeared to be applying effluent too heavily), which could only be partially rectified while the winter rains continued, it was necessary for all other aspects of management of the effluent system to be “spot-on”. The Judge considered that Mr Sullivan had failed to comply with the obligations cast upon him in that respect, in that he was unaware of the state of the ponds at the time of the discharge, or how the system was coping, because Mr Bakewell had not told him. Mr Sullivan’s fault was in assuming that so long as Mr Bakewell had not put him on notice, then he was not obliged to undertake any inspection of the operation of the farm effluent system.
[65] In the light of those considerations, Judge Dwyer concluded that this case fell somewhere between the moderately serious and more than moderately serious bands of offending identified in Chick. It therefore fell around the cusp of the transition from band two to band three. He would have placed the offending at a higher level of culpability if there was sufficient evidence of the wider effects of the discharges. The Judge compared the case with Manawatu-Wanganui Regional Council v DB and AE Cheetham Ltd, a case which involved a sentence imposed by him just the
previous day.13 Judge Dwyer noted that in Cheetham the dairy farmer’s
management failures were similar to the present case, but Cheetham was more serious in that it involved a number of discharges over a period of two months. A
starting point of $100,000 was adopted.
13 Manawatu-Wanganui Regional Council v DB and AE Cheetham Ltd DC Palmerston North CRI-
2012-054-376, 20 August 2012.
[66] The Judge considered this case had similar features to Taranaki Regional Council v Lilley, which had a number of features common to this case, and where a starting point of $60,000 was also adopted.14
[67] The Judge was unable to allow anything for a clean record, because there were several prior incidents (although nothing resulting in prosecution); neither was a discount available for remorse. The Judge was plainly unimpressed at Mr Sullivan’s endeavours to lay responsibility at Mr Bakewell’s feet. He did however note that Mr Sullivan had recently increased the size of the first pond, which meant that the system was now likely to cope with rainfall of the type that occurred in September 2011.
Discussion
[68] Mr Mooney submits that the Judge failed to pay sufficient attention to the simple fact that there was a properly functioning effluent system which had been approved and inspected by the Regional Council annually for a number of years. He says that Mr Sullivan had made Mr Bakewell aware of the terms of the resource consent, and had initially ensured that he was aware of the detail of the system and the manner in which it was to be operated.
[69] Further, he submits, although Mr Sullivan did not supervise Mr Bakewell every day, Mr Bakewell did acknowledge that at the beginning of the sharemilking arrangement Mr Sullivan was there on a regular basis to ensure he knew what he was doing.
[70] Accordingly, Mr Mooney submits, if there was a lapse on Mr Sullivan’s part from the required standard of diligence, it was relatively minor and ought not to have attracted fines at the level actually imposed.
[71] In my view Mr Mooney has failed to place sufficient emphasis on
Mr Sullivan’s shortcomings. Mr Sullivan was on notice that the Council considered that there had to be at least one metre of freeboard in the ponds at all times, and was
14 Taranaki Regional Council v Lilley DC New Plymouth CRI-2010-043-3887, 14 December 2010.
told on 2 September 2011 that the ponds ought to be deepened. Moreover, Mr Sullivan himself accepted that once Mr Bakewell had commenced work and became familiar with the system, he (Mr Sullivan) took no further steps to supervise Mr Bakewell’s operation of the system or to investigate whether or not the system was coping during a period of heavy rain through the middle of the winter.
[72] Mr Mooney submits that Mr Sullivan could not be criticised for that:
Mr Bakewell knew that if he had any issues he should contact Mr Sullivan and Mr Bakewell knew that it was his responsibility to deal with effluent disposal.
[73] Therein lies the flaw in Mr Mooney’s argument in my view. Mr Sullivan lived on the farm; he knew extremely heavy rainfall was being experienced over a period of some days, yet he did nothing at all to satisfy himself that Mr Bakewell’s management of the system was adequate.
[74] Having regard to starting point levels imposed in a variety of comparable cases which it is not necessary to detail in this judgment. I am satisfied that the starting point chosen by Judge Dwyer was perfectly proper and within range.
[75] Mr Mooney’s second argument is concerned with alleged disparity. He
submits:
It is respectfully submitted that there needs to be some discount to any fine that would otherwise be imposed on Mr Sullivan, to recognise some degree of parity between the two offenders. Although Mr Sullivan was responsible for the system, Mr Bakewell was responsible for the operation of the system. It was his operation that led to the discharge.
[76] I consider the judgment of Stevens J in Plateau Farms Ltd v Waikato Regional Council, to provide a complete answer to that submission.15 In that case, the sharemilker, Mr Joyce, was fined $500. He had modest financial resources, had pleaded guilty and he gave evidence for the informant, so facilitating the
prosecution. Other family members agreed to do likewise. The appellant had been
15 Plateau Farms Ltd v Waikato Regional Council HC Rotorua CRI-2007-463-16, 17 September 2007 at [46]-[49]..
sentenced to a fine of $35,000. The question of parity was raised on appeal. Stevens
J said:
[46] I consider that the mere fact that there is a disparity does not necessarily justify the Court intervening on appeal. Before that course would be justified, the Court would need to determine that a reasonably minded independent observer would consider that something had gone wrong with the administration of justice.
…
[49] I agree with the submission of the respondent that, when judges are sentencing in cases of this nature, there will often be a superficial disparity. When effluent discharges occur, culpability may flow to the landowner and sharemilker alike. Corporate landowners will generally have a far greater financial capacity than sharemilkers. Such factors are plainly relevant in ensuring that any fine is meaningful. If a fine is to provide a real deterrence, consistent with the principles of accountability, promoting a sense of responsibility and deterrence as set out in s 7(1) of the Sentencing Act, this may require the Court to make a significant distinction between defendants depending on their particular circumstances. When all relevant circumstances are considered, a disparity may be appropriate and justified. There is a risk that, if the Court did not make an appropriate distinction, either sharemilkers would be financially crippled by heavy fines, or corporate landowners would view fines as a modest tax for environmental pollution.
[77] In the present case, Mr Bakewell pleaded guilty and gave evidence for the informant (albeit reluctantly and following service of a summons). But as Judge Dwyer found, the principal responsibility for the effluent discharge rested with Mr Sullivan. There is no suggestion that his financial position stands in the way of his ability to meet the fines and costs imposed. Any perceived disparity is explained by the considerations to which Stevens J referred in Plateau Farms.
Result
[78] For the foregoing reasons the appeals against conviction and sentence are each dismissed.
.
C J Allan J
2
0
0