Trent v Canterbury Regional Council (Christchurch)
[2020] NZHC 767
•20 April 2020
IN THE HIGH COURT OF NEW ZEALAND CHRISTCHURCH REGISTRY
I TE KŌTI MATUA O AOTEAROA ŌTAUTAHI ROHE
CRI-2019-409-000194
[2020] NZHC 767
BETWEEN RUSSELL WILLIAM TRENT
Appellant
AND
CANTERBURY REGIONAL COUNCIL (CHRISTCHURCH)
Respondent
Hearing: 19 March 2020 Appearances:
T J MacKenzie for the Appellant
T J McGuigan and I van Woerkom for the Respondent
Judgment:
20 April 2020
JUDGMENT OF NATION J
[1] On 3 April 2018, the appellant (Mr Trent) was required by his employer to use a purging tank outside premises it leased in Belfast to clear ammonia refrigerant from refrigeration components. In doing that, an amount of ammonia-contaminated water or ammonia overflowed from the purging tank, ending up in the Kaputone Creek. The discharge caused significant damage, including a near total fish-kill over five kilometres of waterway. Some 1,779 eels were killed. The spill also had “significant cultural impact” on local Iwi given the cultural and ecological importance of the waterway and eels.
[2] Mr Trent and his employer, Emergent Cold Ltd (Emergent), both pleaded guilty to a charge of breaching s 15(1)(b) Resource Management Act 1991 (RMA) by discharging a contaminant, being either ammonia or ammonia contaminated water, onto land in circumstances where it might (and did) enter water. Emergent was fined
$145,350. Mr Trent was fined $97,000. Mr Trent has appealed that fine.
TRENT v CANTERBURY REGIONAL COUNCIL (CHRISTCHURCH) [2020] NZHC 767 [20 April 2020]
Facts
[3] In 2016, Emergent leased two large cool stores and associated refrigeration plant and buildings at Belfast. Emergent purchased the equipment in the refrigerator engine room from the previous tenant, Silver Fern Farms Ltd. The site was previously one of the oldest and largest meat works situated in Christchurch until it closed down. The lease was an interim arrangement pending the site’s demolition. Emergent used the cool stores to store cold and frozen products until March 2018.
[4] Mr Trent was using the purging tank to collect air and ammonia gas that had been trapped in vintage compressors which were to be donated to a machinery museum. These had to be purged of ammonia for safe removal.
[5] This involved ammonia gas being pumped into the water in the purging tank. The water became saturated with ammonia. As this happened, ammonia gas would bubble up and discharge to air from the purging tank. Water that had become saturated with ammonia had to be replaced at times. Any ammonia contaminated water had to be contained and safely disposed of as hazardous waste.
[6] The discharge involved amounts of ammonia-contaminated water and/or ammonia overflowing from the purging tank as a result of Mr Trent refreshing the water in the purging tank as it became saturated with ammonia during the purging process. This also resulted in strong ammonia odours being discharged from the site, which had been detectable by members of the public at least 200 m away.
[7] Mr Trent carried out the purging process over a period of five hours on 3 April 2018. It was during that process the overflow occurred.
[8] The purging tank was situated close to a gutter which directed water to the Christchurch City Council stormwater system. The stormwater system, in turn, flowed into Kaputone Creek which is a tributary of the Styx River. The overflow took that path to the Kaputone Creek.
[9] Mr Trent explained there was a leak in the purging line going to the purging tank which he had fixed. The first time he had used the purging tank in this way was on 3 April 2018.
[10] There was no overflow mechanism in the purging tank. There was no secondary containment system around the base of the purging tank that could have been used to capture any overflow.
[11] Emergent explained that the contractor it had engaged earlier to recover ammonia refrigerant from the system had preferred to use the purging system in the plant room because it thought the outside purging tank should have been bunded.
[12] Included in the fish kill were long-fin and short-fin eels, represented by a wide range of size and age classes, from very large individuals that would have been in excess of 50 years old to juveniles that arrived in the river that season as one to two year old fish. Long-finned eels are currently classified by the Department of Conservation as an “at risk” species and in decline. A total of 1,779 dead fish were recovered, most being eels.
[13] As to the environment and the impact of the discharge on it, the adverse effects were assessed as significant in scale by the Council. There were no long-term adverse effects to vegetation or food sources and it was considered the fish stocks would replenish over time.
[14] The Judge referred to a cultural impact statement that had been obtained from Te Ngāi Tūāhuriri Iwi which advised the creek is a long treasured taonga of the Iwi. The creek was part of an extensive network of wetlands and streams which was an important food gathering place for Māori, particularly eels which were an important food source for them. The Iwi was involved in a project to raise the degraded ecological value of these waters.
[15] The Judge quoted from the cultural impact report in which there was reference to the distress felt by the Iwi at seeing so many dead fish and the way their efforts to restore the fishery and habitat had been wasted.
[16] It seemed from recent reports that some of the affected fish species may have substantially recovered some 18 months later, especially in relation to eels. Fish numbers remained low in the Kaputone Creek one year after the event. No issue was taken with the Judge’s conclusion that the incident had a highly significant adverse effect on the ecosystem of Kaputone Creek, in fact a devastating effect in the short term.
District Court decision
[17] Mr Trent and Emergent were sentenced simultaneously.1 Judge Dwyer began the sentencing exercise with reference to several comparative cases:
(a) In Taranaki Regional Council v Ravensdown Fertiliser Co-operative Ltd, a $100,000 starting point was taken for a company where a contractor had recklessly disposed of hydrolysed urea to a landfill not authorised to receive it.2 The Judge considered the fault of Ravensdown was considerably less than the defendants in this case as it was unaware as to where the discharge was being taken. He also noted that decision was eight years old and there had been “considerable upward movement in sentencing levels since then”.3
(b) In Nelson City Council v KB Contracting and Quarries Ltd, a $120,000 starting point was adopted for a developer who discharged sediment, destroying the habitat of a population of banded kōkopu.4 The Judge found the present case more serious due to the toxicity of the ammonia and the more devastating consequences.
(c) In Canterbury Regional Council v Canterbury Greenwaste Processors Ltd, a $150,000 starting point was adopted for a company dumping demolition waste containing dangerous or toxic chemicals.5
1 Canterbury Regional Council v Emergent Cold Ltd [2019] NZDC 23930.
2 Taranaki Regional Council v Ravensdown Fertiliser Co-operative Ltd DC New Plymouth CRI- 2011-043-2426, 15 December 2011.
3 Canterbury Regional Council v Emergent Cold Ltd, above n 1, at [13].
4 Nelson City Council v KB Contracting and Quarries Ltd [2018] NZDC 11153.
5 Canterbury Regional Council v Canterbury Greenwaste Processors Ltd DC Christchurch CRI- 2012-009-9820, 24 April 2013.
(d) In Auckland Council v Jenners Worldwide Freight Ltd, a $180,000 starting point was adopted for accidental discharge of methyl violet dye killing a range of fish species.6
[18] In adopting a starting point, the Judge considered the following factors to be particularly relevant:
(a) the effect of the discharge on aquatic life in the waterway;
(b) the extent of that effect, being a distance of five kilometres;
(c) the fact that species recovery was likely to take a long time;
(d) the cultural significance of the waterways and the affront to tangata whenua;
(e) the unsatisfactory manner in which the defendants dealt with the highly toxic material; and
(f) the failure to have any bunding to contain spills from the purge tank, which would obviously enter the nearby storm water drain.
[19] The Judge recorded Emergent had acknowledged in its counsel’s submissions and in a statement from the CEO that it was responsible to ensure that environmental protection measures were in place, it accepted full responsibility for the offending and it had not provided Mr Trent with adequate instructions or equipment to undertake the job he was given.
[20] The Judge adopted a starting point for Emergent of $180,000, with particular reference to Jenners.7 He determined the appropriate starting point for Mr Trent was
$120,000 and noted this was 66 per cent of the starting point for Emergent, in recognition that he was not adequately instructed or supervised. The Judge said this
6 Auckland Council v Jenners Worldwide Freight Ltd DC Auckland CRI-2014-092-257, 4 February 2015.
7 Auckland Council v Jenners Worldwide Freight Ltd, above n 6.
was a significant amount but found it necessary given the “real failings” on the part of Mr Trent to closely manage the operation.8
[21] Both defendants were awarded a five per cent reduction for previous good character and a further 15 per cent for guilty pleas. That resulted in the final fines of
$145,350 for Emergent and $97,000 for Mr Trent.
Principles on appeal
[22] Appeals against sentence are allowed as of right by s 244 Criminal Procedure Act 2011, and must be determined in accordance with s 250 of that Act. An appeal against sentence may only be allowed by this Court if it is satisfied there has been an error in the imposition of the sentence and that a different sentence should be imposed.9 As the Court of Appeal mentioned in Tutakangahau v R, quoting the lower court’s decision, a “court will not intervene where the sentence is within the range that can properly be justified by accepted sentencing principles”.10 It is only appropriate for this Court to intervene and substitute its own views if the sentence being appealed is “manifestly excessive” and not justified by the relevant sentencing principles.11
Submissions and discussion
Ground one – failure to take into account the maximum penalty
[23] The maximum penalty for Emergent, as a company, was a fine of $600,000, while the maximum penalty for Mr Trent was a fine of $300,000 or two years’ imprisonment.12 Mr Mackenzie, for Mr Trent, submitted the Judge failed to take the different maximum fines into account. He referred to the Judge’s statement:13
I have determined that the appropriate starting point in your case, Mr Trent, is the sum of $120,000. That, of course, is 66% of the starting point I have adopted for Emergent and reflects its acceptance of ultimate responsibility rather than any principle that companies should ipso facto be fined more than individuals.
8 Canterbury Regional Council v Emergent Cold Ltd, above n 1, at [18].
9 Criminal Procedure Act 2011, ss 250(2) and 250(3).
10 Tutakangahau v R [2014] NZCA 279, [2014] 3 NZLR 482 at [36].
11 Ripia v R [2011] NZCA 101 at [15].
12 Resource Management Act 1991, s 339(1).
13 Canterbury Regional Council v Emergent Cold Ltd, above n 1, at [18].
[24] With his written submissions, Mr Mackenzie seemed to be suggesting, where a company and an individual were charged with the same offending, the starting point should equate, in a proportionate way, to the difference in the maximum penalties. He suggested this was necessary to give effect to s 8(b) Sentencing Act 2002 which requires that a sentencing court “must take into account the seriousness of the type of offence in comparison with other types of offences, as indicated by the maximum penalties prescribed for the offences”.
[25] For the Canterbury Regional Council, Mr McGuigan submitted that the difference in maximum fines did not mean the difference always had to be reflected in the way an individual was sentenced. He submitted the higher penalty available for corporate defendants was designed to provide flexibility rather than as a mandate or stipulation that companies must always be subject to twice the penalty individuals are. He referred to the judgment of Mander J in the High Court in Waslander v Southland Regional Council.14
[26] Mr McGuigan submitted the starting point of $120,000 for Mr Trent, viewed against the maximum fine of $300,000, did not infringe upon the principle set out in s 8(b) Sentencing Act and was an appropriate reflection of Mr Trent’s culpability. Counsel contended the starting point was within range.
[27] Mr Mackenzie submitted that “so far as Waslander suggests that maximum penalties are not relevant at all between two defendants, it may not be good law”. He referred to decisions of the Environment Court where judges had taken account of the differing maximum penalties, in particular Marlborough District Council v Sowman.15
[28] I do not consider that, in Waslander, the High Court was suggesting that maximum penalties would never be relevant as between two defendants. There, only an individual who owned and operated a dairy farm was being sentenced on three charges of unlawfully discharging contaminants into the environment.
14 Waslander v Southland Regional Council [2017] NZHC 2699.
15 Marlborough District Council v Sowman [2019] NZDC 25036.
[29] In Waslander, Mander J considered the appropriateness of the fines with regard to the environmental harm suffered, the level of Mr Waslander’s culpability and the circumstances relating to Mr Waslander personally. He reached a conclusion as to Mr Waslander’s responsibility for the offending and the approach to totality in setting the appropriate effective sentence. After reviewing the appropriateness of the starting points adopted for the offending on that basis, Mander J said:16
Similarly, comparison with the greater maximum penalty available for corporate defendants does not assist Mr Waslander’s argument. Corporate defendants will usually be associated with larger commercial enterprises, although often it will simply be a matter of circumstance as to how the individual dairy farmer has organised or structured his dairy operation. The higher penalty for corporate defendants reflects both the need for the Court to be able to impose meaningful penalties that will carry the necessary punitive and deterrent effect on large commercial organisations and the absence of any alternative non-monetary sentences such as imprisonment which are available when natural persons appear before the Court for this type of offending. I do not consider the level of fine imposed in the present case breached any policy which sits behind the higher penalty levels for corporate defendants in terms of a percentage of the maximum penalty, as was contended for by [counsel for Mr Waslander].
[30] His Honour did not say that the maximum levels of fine would always be irrelevant.
[31] In his submissions, Mr McGuigan accepted the applicable maximum penalty will always be a relevant factor, but he submitted differences in culpability and other aggravating features will also play a role and will affect relativity between the starting points adopted.
[32] Ultimately, in his oral submissions, Mr Mackenzie said, here, the Judge had been in error in not considering the difference in maximum fines at all when arriving at an appropriate starting point for Mr Trent. Mr Mackenzie submitted in his written submissions that the distinction in maximum fines was particularly important where “two defendants are for sentence on the same facts but are at the same time facing different penalties”. He submitted this was such a case, so the different maxima had to be recognised.
16 Waslander v Southland Regional Council, above n 14, at [53].
[33] In this instance, Judge Dwyer did not consider it appropriate to adjust the penalty in a way that reflected the difference in fines to which both defendants were potentially exposed. I do not accept however that he had no regard to the difference in potential fines.
[34] Mr Mackenzie told me that, on sentencing, he had submitted there should be a difference in the starting point sentence which reflected the difference in maximum monetary penalties. The submission was consistent with the argument Mr Mackenzie made in his written submissions to this Court. The Judge must have been mindful of that submission when, having arrived at a starting point fine of $120,000 for Mr Trent, he said:17
That, of course, is 66% of the starting point I have adopted for Emergent and reflects its acceptance of ultimate responsibility rather than any principle that companies should ipso facto be fined more than individuals.
In saying that, the Judge was rejecting the submission made for Mr Trent that the starting point should reflect the difference in potential maximum fines.
[35] Contrary to the submissions for Mr Trent, this was not a case where the defendants were for sentence on the same facts. The Judge was careful to articulate that he had arrived at different starting points because their involvement in the offending was different. He had noted Emergent had accepted full responsibility for the offending and had not provided Mr Trent with adequate instructions or equipment to undertake the job he was given. The Judge said the higher starting point he had adopted for Emergent reflected its acceptance of ultimate responsibility.
[36]The Judge arrived at a starting point for Mr Trent after observing that:18
… there were real failings on [his] part as the man on the spot who was supervising the purging operation. The need for close management of that operation should have been apparent in light of the proximity of the Council drain if nothing else. The purging operation was undertaken over a period of about five hours during which time there had been a strong ammonia smell and it was apparent that an overflow was occurring.
17 Canterbury Regional Council v Emergent Cold Ltd, above n 1, at [18].
18 At [18].
[37] The Judge accepted Mr Trent had not turned his mind to precisely where the overflow might ultimately end up once it had got into the Council stormwater system. He accepted Mr Trent did not really turn his mind to the very toxic nature of the discharge. He further accepted that Emergent did not adequately instruct or supervise Mr Trent in that regard. The Judge said this was why he had chosen a lower starting point for Mr Trent than he did for Emergent.
[38] The Judge noted the starting point was 66 per cent of the starting point adopted for Emergent but made it clear he did not arrive at the starting point on simply a proportionate basis. With both defendants, he had carefully considered the environmental and cultural impact of the offending. He then had regard to the culpability of each defendant. There is no criticism of the approach he took in this regard.
[39] Counsel’s argument on this ground was based on a flawed premise that the maximum penalty for the company was $600,000 and for Mr Trent was $300,000. The maximum penalty for Mr Trent was imprisonment for a term not exceeding two years or a fine not exceeding $300,000.
[40] There have been a number of cases where judges in the District Court have sentenced both an individual and a company for RMA discharge offences arising out of the same events or circumstances. In some cases, judges noted the difference in maximum monetary penalties and observed that, because of this, caution had to be exercised in using a starting point fine adopted in another case for a company in arriving at a starting point for an individual in the subject case.19
[41] In some instances, judges noted the higher penalties to which corporates might be liable and specifically referred to that in adopting a higher starting point fine for a corporate offender than with an associated individual.20
19 For example, Marlborough District Council v Sowman, above n 15, at [80].
20 Southland Regional Council v Egginton [2015] NZDC 14393.
[42] In Southland Regional Council v Taha Asia Pacific Ltd, when sentencing the employing company after having already sentenced an individual for the same offending, the Judge noted the difference in higher potential fines but expressly said he was not adopting a higher penalty for the company on a ratio basis.21
[43] In some cases, judges noted the difference in maximum monetary penalties and arrived at different starting point fines but indicated the different starting points arrived at was not to recognise the difference in maximum monetary penalties.22
[44] In some instances, there has been express reference to the difference in maximum monetary penalties as a factor that was of influence in arriving at different starting points for the company and the individual.23
[45] In sentencing an offender, s 8 Sentencing Act requires the Court to take into account the principles referred to in s 8(a)-(j):
8 Principles of sentencing or otherwise dealing with offenders
In sentencing or otherwise dealing with an offender the court—
(a)must take into account the gravity of the offending in the particular case, including the degree of culpability of the offender; and
(b)must take into account the seriousness of the type of offence in comparison with other types of offences, as indicated by the maximum penalties prescribed for the offences; and
(c)must impose the maximum penalty prescribed for the offence if the offending is within the most serious of cases for which that penalty is prescribed, unless circumstances relating to the offender make that inappropriate; and
(d)must impose a penalty near to the maximum prescribed for the offence if the offending is near to the most serious of cases for which that penalty is prescribed, unless circumstances relating to the offender make that inappropriate; and
(e)must take into account the general desirability of consistency with appropriate sentencing levels and other means of dealing with offenders in respect of similar offenders committing similar offences in similar circumstances; and
21 Southland Regional Council v Taha Asia Pacific Ltd [2015] NZDC 18010 at [17].
22 For example, Southland Regional Council v Kidd [2019] NZDC 14942 at [15].
23 For example, Taranaki Regional Council v Ravensdown Fertiliser Co-operative Ltd, above n 2.
(f)must take into account any information provided to the court concerning the effect of the offending on the victim; and
(g)must impose the least restrictive outcome that is appropriate in the circumstances, in accordance with the hierarchy of sentences and orders set out in section 10A; and
(h)must take into account any particular circumstances of the offender that mean that a sentence or other means of dealing with the offender that would otherwise be appropriate would, in the particular instance, be disproportionately severe; and
(i)must take into account the offender’s personal, family, whanau, community, and cultural background in imposing a sentence or other means of dealing with the offender with a partly or wholly rehabilitative purpose; and
(j)must take into account any outcomes of restorative justice processes that have occurred, or that the court is satisfied are likely to occur, in relation to the particular case (including, without limitation, anything referred to in section 10).
[46] No one of the 10 matters referred to in (a)-(j) is necessarily more important than another. The matters include in 8(a), the gravity of the offending in the particular case, including the degree of culpability of the offender and, in (b), the seriousness of the type of offence in comparison with other types of offences, as indicated by the maximum penalties prescribed for the offences.
[47] Whenever a monetary penalty is imposed, the court must have regard to the particular financial circumstances of the offender in a way that could lead to the fine being increased or decreased.24 It is also appropriate given the way s 339 RMA permits a higher fine to be imposed on a corporate offender than an individual.25
[48] Where penalties are being imposed in regard to the culpability of multiple offenders’, sentence is to be assessed by reference to the role played by each individual offender:26
… even where a number of persons acting together commit a criminal offence, the Court is required to assess the culpability of each offender separately and to impose on each a penalty that reflects the gravity of that offender’s criminality.
24 Sentencing Act 2002, s 40, specifically refers to that consideration.
25 The starting point arrived at by the Judge for the four instances of offending was $120,000. The defendant was not able to pay any fine. Neither imprisonment nor home detention was appropriate because Mr Egginton had to leave New Zealand. He was sentenced to 100 hours’ community work.
26 Calford Holdings Ltd v Waikato Regional Council [2009] 15 ELRNZ 212 (HC) at [32].
[49] A fine that is appropriate for an individual defendant is not to be reduced simply because other offenders were involved or because a corporate entity was also involved.
[50] When sentencing both a corporate offender and an individual for the same offence arising out of the same events, there is thus no particular reason why the starting point fine should inevitably be less for an individual than for a corporate offender. It could be more for the individual. The appropriate starting point will depend on the Judge’s assessment of the gravity of the offending in the particular case, the degree of culpability of the offender and all relevant matters referred to in s 8 Sentencing Act, with particular regard to the RMA context of the offending.
[51] The seriousness of relevant RMA discharge offences is indicated by the maximum fine for a corporate offender of $600,000 and the maximum fine of
$300,000 or imprisonment for an individual. For the reasons articulated by Mander J in Waslander, the higher maximum monetary penalty for which a corporate offender may be liable is no indication that offending by a company will always be more serious than offending by an individual.27
[52] Judges do have to consider the general desirability of consistency with appropriate sentencing levels, as referred to in s 8(e) Sentencing Act. For that reason, judges will have to consider carefully the basis on which a starting point fine was arrived at in a particular case which it is suggested might be relevant to the case they are dealing with. There is however no reason why the starting point fine adopted for a corporate offender, particularly where it is significantly less than $300,000, will not be of assistance in arriving at a starting point fine for an individual offender.
[53] For the reasons articulated by Mander J in Waslander, I agree that the difference in the maximum monetary penalties does not require a court to necessarily arrive at a monetary starting point sentence which reflects the difference in maximum monetary penalties to which an individual and a company may be exposed.28 The difference might be relevant in a particular case but that will depend on all the
27 Waslander v Southland Regional Council, above n 14.
28 At [53].
circumstances of the offending and the circumstances of both the corporate and individual defendants. The difference in maximum monetary penalties in no way suggests that an offence, such as occurred here, will be less serious when it is committed by an individual than when it is committed by a company.
[54] For reasons Judge Dwyer articulated, he considered Mr Trent’s offending was less culpable than that of Emergent. It was on that basis he arrived at a starting point monetary penalty of $120,000 for Mr Trent, in contrast to the $180,000 arrived at for Emergent. There was no error in the way he did this.
[55] I have not been persuaded that the Judge was in error in failing to take into account the difference in maximum potential fines for corporate and individual offenders when sentencing Mr Trent.
Ground two – inconsistency with other sentence levels
[56] Counsel suggested there was no other case where the level of fine imposed was as high as that imposed on Mr Trent. He said there were only a handful of sentencing examples of individual offenders being sentenced in the area of toxic spills as opposed to effluent discharges. The starting point and end sentence were “remarkably higher” than other cases without good reason. Mr Mackenzie referred to three cases.
[57] In Taranaki Regional Council v Ravensdown Fertiliser Co-operative Ltd, Ravensdown was responsible for discharging approximately 5,500 L of hydrolysed urea into an important water body.29 This led to the death of 4,000 to 5,000 fish. The discharge was described as having a “devastating” effect on a 3.6 km length of water body and a lethal kill area of 1.2 km.30 Also prosecuted was Mr Blackstock, the contractor responsible for the collection and disposal of the effluent. A starting point fine of $100,000 was adopted for Ravensdown and $50,000 was taken for Mr Blackstock.
29 Taranaki Regional Council v Ravensdown Fertiliser Co-operative Ltd, above n 2.
30 At [7].
[58] Ravensdown had arranged for disposal of hydrolysed urea knowing of its toxicity. It arranged for Mr Blackstock’s business to collect hydrolysed urea. It had not made sure the hydrolysed urea was going to an appropriate disposal site. Mr Blackstock’s business took the urea to a waste disposal site operated by another company which was not permitted to take hydrolysed urea at that site. Judge Dwyer held that Ravensdown was most responsible for the offending because of the business it was in. The Judge considered the dump site company and Mr Blackstock were both careless and noted “the outcome of that carelessness was serious, probably out of all proportion to the carelessness”.31 The Judge noted and did not reject a submission that Mr Blackstock had been asked to urgently remove waste from the premises. An employee undertook the work. Neither Mr Blackstock nor the employee had any idea about the toxic nature of the waste in question.
[59] In a separate proceeding on the same day, Mr Blackstock was sentenced for dumping waste from the Ravensdown plant into a different landfill.32 Evidence as to that discharge had been obtained during the investigation of the other incident just referred to. A starting point of $20,000 was adopted for Mr Blackstock in that proceeding. The Judge characterised Mr Blackstock’s offending in that instance as careless. He said Mr Blackstock ought to have known the nature and potential toxicity of waste materials his business was dealing with. He commented that the most significant feature in determining a penalty starting point in that case was the lack of any proven environmental effect.
[60] Judge Dwyer sentenced the defendants in both cases. Mr Blackstock was the principal of the contracting business rather than an employee. His business was with waste disposal. Mr Mackenzie contrasted Mr Blackstock’s business in this respect to that of Mr Trent’s employer which was not in the business of ammonia removal, and suggested its business “was not a profit-making commercial exercise”. He suggested Mr Blackstock was sentenced for similar offending but where there had been no proven environmental effect.
31 Taranaki Regional Council v Ravensdown Fertiliser Co-operative Ltd, above n 2, at [29].
32 Taranaki Regional Council v AJ Cowley Ltd DC New Plymouth CRI-2011-043-2428, 15 December 2011.
[61] When sentencing Emergent and Mr Trent, Judge Dwyer said of the Ravensdown decision:33
That decision is now some eight years old and I think it might be observed that there has been some considerable upward movement in sentencing levels since then. I see the fault of Ravensdown in that case as being considerably less than the Defendants in this case as it was unaware as to just where the discharge was being taken by a contractor, although it should have checked that out.
[62] For the Council, Mr McGuigan highlighted the difference as to the defendants’ knowledge of the toxic nature of what was being disposed of between the two cases. Mr McGuigan submitted, and I accept, Mr Trent’s offending could not be considered less serious on the basis his employer was not involved in the business of clearing ammonia from refrigeration equipment. Mr McGuigan said Emergent was a nationwide company, operating refrigeration warehouses, as it had been at Belfast. Mr Trent ought to have been aware of the highly toxic nature of ammonia. He had been carrying out a purging exercise for five hours where he should have known that any overflow of ammonia-saturated water would enter a nearby drain.
[63] Mr Mackenzie also referred to the starting point of $22,000 adopted for an individual, Mr Sowman, in Marlborough District Council v Sowman.34 Mr Sowman was sentenced on two discharge offences concerning the discharge of grape marc (a waste by-product of winemaking) and leachate entering land and groundwater. Local residents’ water bores could not be used for up to 12 months.
[64]Mr Mackenzie acknowledged that Mr Trent’s was a completely different case.
[65] It was significant in the offending of Mr Sowman that, for the period when the relevant discharge had occurred, it was from a pad that had been constructed on Mr Sowman’s instructions to proper compliant engineering standards and the pad appeared to be operating soundly. Mr Sowman had taken the initiative to have the pad constructed for the right intentions, a worthy environmental initiative. There was however a later period when, as a result of information that had come to him from the Council and local residents, his inaction in dealing with the situation was reckless.
33 Canterbury Regional Council v Emergent Cold Ltd, above n 1, at [13].
34 Marlborough District Council v Sowman, above n 15.
The Judge had also noted that, until the Council obtained an analysis from a scientist, it was not known how the leachate had acted as an agent on metals naturally in the soil such that they were free to become entrained in the groundwater so as to cause the contamination which occurred.
[66] The contamination of groundwater affected six residential households, causing discoloration of water that stained clothing, was foul smelling and foul tasting but had not caused health risks. It was considered to have had a moderately serious effect on the environment but was significantly less damaging than the harm that was done with Mr Trent’s offending. Mr Trent’s offending was more serious because of the way he had continued to use the purging tank when overflows of ammonia were going into the nearby Council drain.
[67] Mr Mackenzie also referred to the starting point of $80,000 adopted in the sentencing of Egginton in 2015.35
[68] The defendant had been a manager for a company that produced refined aluminium dross. The company unlawfully dumped the dross in a pit, which became the subject of prosecution and enforcement orders. A condition of the enforcement order required the company to remove and properly dispose of the dross. The company advised the Council of three approved sites at which the dross would be deposited. The Council said Mr Egginton arranged for some of the dross to be unlawfully discharged at another farm property. This resulted in five charges spread across different periods of time.
[69] Mr Mackenzie said the immediate harm of the offending in that case was less than in the present case but described it as particularly cynical, deceptive and intentional offending, flying in the face of the previous prosecution and enforcement orders with full knowledge.
[70] Mr McGuigan submitted that, in Egginton, the environmental effects of the discharge were significantly less than in this case because the contaminants did not enter the Mataura River or downstream bores. A discharge at one of the sites caused
35 Southland Regional Council v Egginton, above n 20.
physical discomfort to some people but no ongoing physical harm. He also submitted the actual circumstances of the offending were not such as to increase Mr Egginton’s culpability in the way Mr Mackenzie had suggested.
[71] In Egginton, the Court was concerned first with the deposit of refined aluminium dross into an excavated gravel pit at Edendale between June and July 2014. Refined dross is less toxic than unrefined dross but is nevertheless a skin and eye irritant and a long-lasting aquatic ecotoxicant. In July 2014, the Council obtained interim and final enforcement orders from the Environment Court which led to the disposal of the dross at the regional landfill site. At the same time, the Council issued an enforcement order requiring Mr Egginton’s employing company, Taha, to provide the Council with a list of all sites in the region where refined aluminium dross had been discharged or stored. The Council was then told of three industrial sites and a disused papermill at Mataura where that had happened. When specifically asked, Taha denied any knowledge of the use of the material on farm properties in the Bluff or Awarua areas.
[72] In March 2015, the Council discovered that aluminium dross had been used on farm tracks on the Bluff highway and one at Edendale. The offending alleged at the Bluff site occurred in 2012 and at the Edendale site in 2014.
[73] As Mr McGuigan pointed out, the discharges at the Bluff and Edendale sites had not occurred after the Council had taken enforcement action. It was thus not cynical and deliberate offending in the way Mr Mackenzie had submitted.
[74] As to the Bluff offences, Judge Dwyer noted it was submitted Mr Egginton had been unaware that use of the product on farm tracks was unsafe. The Judge said, as the manager of a company dealing with a material known to be hazardous to human health, Mr Egginton had an obligation to make enquiry and to know the circumstances and limitations as to its safe handling and use. He said the potentially hazardous nature of aluminium dross must have been apparent to Mr Egginton from his involvement in the business since 2011. The Judge noted that the proven ongoing adverse effects of the discharges at both the Bluff and Edendale sites appeared limited at the time of sentencing. Contamination had not entered the Mataura River near the Edendale site
or downstream to privately owned water supply bores. It was likely there were elevated concentrations of aluminium fluoride and nitrogen in groundwater near the farm tracks on the Bluff site but there appeared to be no risk that contaminated groundwater would reach Foveaux Strait in sufficient quantity to pose any risk to that environment. A number of people had been affected by gaseous discharges from the dross at the Edendale site. The Judge sentenced on the basis there were no ongoing physical consequences to people in that way.
[75] The Judge adopted an appropriate starting point, as a financial penalty for the three Edendale offences, of $80,000. He adopted a starting point for the Bluff offending of $40,000.
[76] I do not accept Mr Egginton’s conduct was particularly culpable in the ways Mr Mackenzie suggested. It was nevertheless serious but did not do the same damage to the environment as had resulted from Mr Trent’s negligence. There was a logical explanation for the lower starting point fines adopted when Mr Egginton was sentenced.
[77] I have also considered the cases Judge Dwyer referred to in sentencing Mr Trent.
[78] In Canterbury Greenwaste Processors Ltd, two companies and Mr Kepple were all involved in discharging contaminants to land.36 The offending occurred through the ongoing depositing of earthquake demolition waste to a farm where it was used to build farm tracks. The waste had not been sorted and was not clean rubble so contained metals and other materials which had the potential to contaminate a stream adjacent to the farm track. Mr Kepple was the principal of Canterbury Greenwaste Processors Ltd (Greenwaste), who was contracted to process the demolition waste and had told the defendant land-owning company that Greenwaste could provide that company with clean, screened rubble suitable for use on farm tracks. Although contaminants had been detected in the stream, it was accepted that capping the track with limestone would effectively mitigate the adverse environmental effects. The stream however had significant amenity and cultural values, especially to the Ngāi
36 Canterbury Regional Council v Canterbury Greenwaste Processors Ltd, above n 5.
Tahu Hapu who were thus seriously affected by the potential degradation of the stream. Greenwaste and Mr Kepple were in the business of disposing of demolition waste. Through depositing the material in farm track, they had avoided the substantial costs of having to dispose of a huge amount of waste at an approved landfill site. The Judge accepted they were remorseful for what had occurred and would be spending some
$150,000 on the limestone capping. They were no longer involved in processing and disposing of demolition material.
[79] After careful consideration of a number of relevant cases cited to him by counsel, the maximum fines for which the companies were liable, and for Mr Kepple the option of a term of imprisonment, the Judge regarded Greenwaste as the more culpable of the three defendants. He arrived at a fine for both Greenwaste and Mr Kepple of $150,000, apportioned on the basis of overall culpability on roughly a one- third/two-thirds basis. The information in the sentencing notes suggests that Greenwaste, lifting the corporate veil, was likely to have been the alter ego for Mr Kepple. It was a company of modest financial resources. The Judge said the defendants could meet “a very significant fine only by selling assets, or it would result in the winding-up of the company”.37
[80] In KB Contracting, two companies involved in a substantial residential development in Nelson had allowed sediment to be discharged from settlement treatment ponds on various dates between 22 March 2017 and 27 March 2017.38 The discharge had been of sediment-laden runoff into a stream and from there into the Waimea Estuary. The stream was an important habitat for banded kokopu, low numbers of long-finned eel were also found in the stream. In summary, the Judge said an important and/or reasonably significant habitat of a native fish species had been grossly polluted by both suspended and deposited sediment. The numbers of fish in the stream had sharply declined. The direct effect of the incidents on the estuary environment could not be established.
37 At [84].
38 Nelson City Council v KB Contracting and Quarries Ltd, above n 4.
[81] The Judge considered that, in the particular circumstances of that case, the affairs of the two defendants were so intermingled that to find against one would come out of the pocket of the other as well, so it was appropriate to take a global starting point as between the two defendants. The Judge arrived at an appropriate starting point of $120,000.
[82] It was not submitted to the sentencing Judge in this case that the affairs of Mr Trent and Emergent were so intermingled that the fine of one would inevitably be treated as a fine against the other. The Judge assessed the two defendants as being culpable in different ways although arising out of the same event. The harm done by the discharge appears to have been significantly worse in the current case than in KB Contracting.
[83] The case which the Judge considered was most similar was that of Auckland Council v Jenners Worldwide Freight Ltd, a judgment of February 2015.39 In Jenners, the Judge referred to 11 cases that had been cited to her by counsel, with reference to the adopted starting point in those cases, before she arrived at a starting point of
$180,000 for the defendant company in that case.
[84] In Jenners, a junior employee had stacked a container containing the hazardous material methyl violet. Because of the way it had been stacked, the container fell and ruptured on the ground. The contents spilt, eventually travelling to stormwater pipes and then into a freshwater and inter-tidal zone, and approximately 3.5 km of estuary environment. The employee had not been properly trained in how to store hazardous substances. As in the current case, the environment into which the hazardous material flowed was being restored in conjunction with local Iwi. As a result of the contamination, the land, stream banks, vegetation and stream beds were stained. The spill adversely affected macro-invertebrates and the habitat and food for this fauna. There was substantial kill of fish and eels, similar to the damage done in the subject case. Aquatic life was also affected within the estuary and along its entrance. The use and enjoyment of the waterway and estuary by people accessing them, including but
39 Auckland Council v Jenners Worldwide Freight Ltd, above n 6.
not limited to Iwi, was also affected by the way methyl violet was in the sediment. As here, the company was proactive and responsible in responding to the calamity.
[85] After a full review of relevant cases cited to her by counsel, Judge Harland said:40
I have decided that the appropriate starting point is a fine of $180,000. This reflects the nature of the environment, the severity of the impact on the environment, the fact that some of the effects are still evident – although there is some hope that it can be remediated. It takes into account the negligent actions of the various managers and the management of the company overall. It is sufficiently high to provide a deterrent to other businesses involved in the storage and handling of hazardous substances and it is relative to the size and wealth of the company. The starting point is 30% of the total available to the Court.
[86] In this case, the Judge arrived at an appropriate starting point sentence for both Emergent and Mr Trent with particular regard to the starting point adopted in Jenners for a corporate offender for similar offending and a similar acceptance of responsibility and expression of remorse of $180,000. It was not submitted for Mr Trent before me on appeal that the particular financial circumstances of either Emergent or Mr Trent were such that the starting point in Jenners should not have been relied on so heavily as a reflection of the seriousness of Mr Trent’s offending. There was no suggestion that he was less able to pay a fine than the corporate offender.
[87] In those circumstances, the starting point adopted in Jenners for similar offending was properly of some assistance to the Judge in arriving at a starting point for Mr Trent’s offending. The starting point did not have to be different simply because Mr Trent was an individual.
[88] It was not submitted to me on appeal that the Judge should not have considered the starting point sentences in Jenners, Greenwaste or KB Contracting as relevant in arriving at a starting point sentence for Mr Trent. Emergent has not appealed its sentence based on a starting point of $180,000.
40 At [51].
[89] I do not consider the fine imposed on Mr Trent was so out of line with sentences imposed in similar cases that, on that basis, it was out of range and manifestly excessive.
Ground three – incorrect reference to and reliance on increasing sentences
[90] As referred to earlier, when discussing Ravensdown and the sentencing of Mr Blackstock, the Judge stated “[t]hat decision is now some eight years old and I think it might be observed that there has been some considerable upward movement in sentencing levels since then”.41
[91] Mr Mackenzie submitted the Judge was in error in saying there had been a considerable upward movement in sentencing levels for such offending. He argued the increase related to sentences for discharges of dairy effluent and there had been no pattern of cases which demonstrated an increase in sentencing levels for discharges of toxic waste.
[92] Mr McGuigan submitted there was no error in the Judge referring to the way penalties for this sort of offending had increased since the Ravensdown case. He said there may have been only a small number of toxic waste cases in comparison to prosecutions of discharge of dairy effluent offending but such cases as there had been were consistent with there having been an increase for toxic waste offences. There is merit in that submission.
[93] The need for increased sentences by way of deterrence has not however been confined to such cases. In Sowman, Judge Hassan said “[o]n the matter of relative culpability, I accept the Council’s submission that the bands set out in Chick, albeit in relation to dairy effluent cases, are of assistance.”42 Judge Hassan then accepted the submission from the Council that, applying those bands in Chick, it was “important to bear in mind that levels of sentencing for various RMA offences have increased over the years”.43
41 Canterbury Regional Council v Emergent Cold Ltd, above n 1, at [13].
42 Marlborough District Council v Sowman, above n 15, at [42], citing Waikato Regional Council v GA & BG Chick Ltd (2007) 14 ELRNZ 291.
43 At [43].
[94] The rationale for increased sentences by way of deterrence is relevant not only to dairy effluent cases. In Southland Regional Council v Baird, in relation to effluent offending, the Judge said:44
The need for the community, through the Court, to denounce offending which pollutes our waterways and to deter such offending continues to be a major consideration in sentencing for this offending.
[95] Mr Mackenzie submitted that toxic discharge cases have been few and far between and are often accidents and difficult to foresee (compared for instance with a typical effluent case of an overflowing effluent storage pond or excessively irrigated paddock).
[96] I do not accept there had to be a distinction between toxic waste cases and dairy effluent cases on that basis. The rationale for differentiating Mr Trent’s offending in this instance from what Mr Mackenzie described as a typical dairy effluent case is not valid. Here, Mr Trent was in charge of and used the purging tank close to a gutter where, if the ammonia-contaminated water overflowed without a bund in place to protect overflow, it was certain to go into the Council stormwater system. From there, he should have been aware it would reach a natural waterway. This was not an overflow and a contaminating discharge which was difficult to foresee.
[97] Nor do I think there would necessarily have been an error in the Judge considering the way increasing penalties for dairy effluent offending was a trend that could be relevant to sentencing for toxic waste offending. The factors of most significance in RMA offences are:
(a) a relative culpability in the offending, for example whether it was deliberate, reckless or careless and as to degrees in those matters;
(b) the nature of the environment affected and the extent of damage; and
(c) denunciation, and related matters as to general and specific deterrence.
44 Southland Regional Council v Baird [2018] NZDC 11941 at [41].
[98] Having regard to those matters, there is no reason why the ways those factors could result in increased sentences should have to be less for toxic waste offending than for dairy effluent discharges.
[99] I do not consider the Judge’s comment as to a trend of increasing sentences for RMA offending of the sort that occurred here was in error or that, in the particular circumstances of this case, it has led to his imposing a fine on Mr Trent which was manifestly excessive.
Conclusion
[100] It was not suggested for Mr Trent that the Judge made any error in assessing the seriousness of his offending or his particular culpability for what occurred. Mr Trent did not deliberately discharge contaminated water into the Council’s stormwater system but he consciously did not have the purging tank under observation for a significant period. There was no bund in place to restrain any overflow. There was no issue taken before me with the statement on behalf of the Council that Mr Trent was the South Island’s engineering manager for Emergent, a nationwide company operating refrigerating warehouses.
[101] The summary of facts referred to Emergent having contracted another company to recover ammonia refrigerant from the system when the cool stores were being decommissioned. Emergent advised Council investigators that Cool Logic had preferred to use the purging system in the plantroom as it thought the outside purging tank should have been bunded. Polar Cold agreed with Cool Logic.
[102] The serious failings on Emergent’s part and also the different but particular failings on Mr Trent’s part caused particularly serious environmental damage, more damage than most other instances of toxic waste discharges that have been referred to in other cases. It has not been shown that the starting point adopted for Mr Trent’s offending was manifestly excessive by reason of errors as was submitted for him. He received credit for his record of past good character and guilty plea. No issue was taken with those discounts.
[103] The starting point fine for the individual could have been reduced if there was something about Mr Trent’s financial circumstances that made this appropriate. It was not suggested in either the District Court or before me on appeal that this was a necessary consideration.
[104]In this case, the total fines imposed on both Emergent and Mr Trent totalled
$242,350. That was a substantial sum but it was not suggested this was a situation where the affairs of Mr Trent and Emergent were so intermingled that a fine against one was effectively a fine against the other. There was no suggestion that Emergent was effectively a small company and the alter ego of Mr Trent.
[105] I conclude the sentence imposed on Mr Trent was within the range of sentences reasonably available to the sentencing Judge. I have not been persuaded that the sentence imposed was manifestly excessive.
[106]Mr Trent’s appeal is dismissed.
Solicitors:
T J Mackenzie, Barrister, Christchurch Wynn Williams, Christchurch.
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