Yates v Taranaki Regional Council HC New Plymouth CRI 2010-443-8
[2010] NZHC 717
•14 May 2010
IN THE HIGH COURT OF NEW ZEALAND NEW PLYMOUTH REGISTRY
CRI-2010-443-008
TERRENCE EDWARD YATES
Appellant
v
TARANAKI REGIONAL COUNCIL
Respondent
Hearing: 29 March 2010
Counsel: P J Mooney for Appellant
K de Silva for Respondent
Judgment: 14 May 2010 at 12.30pm
In accordance with r 11.5 I direct the Registrar to endorse this judgment with a delivery time of 12.30pm on the 14th day of May 2010.
RESERVED JUDGMENT OF MACKENZIE J
Introduction
[1] The appellant pleaded guilty to three charges under s 15(1)(b) of the Resource Management Act 1991 in relation to discharges of dairy farm effluent. He was fined a total of $70,000. He appeals against the sentence, on the grounds that it
was manifestly excessive.
YATES V TARANAKI REGIONAL COUNCIL HC NWP CRI-2010-443-008 14 May 2010
[2] The appellant and his family own and live on a dairy farm at Inglewood. At the time of the offending, August 2009, about 420 cows were being milked, by a sharemilker. The discharge of dairy effluent to land requires a resource consent from the Taranaki Regional Council. Discharge of untreated dairy effluent to surface water is prohibited. The appellant held a resource consent for discharge of untreated farm dairy effluent by spray irrigation onto and into land. The farm has a spray irrigation system for dispersing effluent. That consists of a sump, pump, holding pond and an open ended irrigation pipe. The nature of the system is such that the discharge end of the irrigation pipe must be moved regularly to avoid a build up of effluent on a concentrated area, and consequent run off.
[3] On 1 October 2009 council inspection officers undertook a routine farm inspection and identified two separate dairy pollution incidents. The first was that dairy shed effluent was over flowing from a holding pond into a nearby farm drain which ran into a tributary stream of the Manganui River. The appellant faced one charge in respect of this over flow, of discharging dairy farm effluent from a holding pond/containment area on land in circumstances which may have resulted in that contaminate entering water.
[4] The second incident was a discharge directly from the irrigation pipe onto land, without being dispersed by spray as required by the terms of the resource consent. A large amount of effluent had ponded in the area of the paddock to which it was discharging, and it was evident that the irrigation pipe had not been shifted for some time. The appellant faced two charges in respect of the discharges from the irrigation pipe, of discharging dairy farm effluent from an irrigation pipe onto land in circumstances which may have resulted in that contaminant entering ground water. One charge related to the discharge which was seen on 1 October. The second charge related to a continuing offence between 10 August 2009 and
30 September 2009, a period in which the irrigation pipe had not been moved.
[5] In sentencing, Judge Dwyer noted in respect of the first incident that the Court had made it clear on many occasions that discharges to tributaries would be treated just as seriously as discharges to principal water bodies. He noted that this was the appellant’s second conviction for discharging to this particular tributary. He noted the submission of counsel that the discharge appeared to have occurred on only one day but found that submission to have little merit in mitigatory terms, because of the highly toxic nature of the dairy effluent and the ecological values of the stream both in its own right and as a contributor to a highly valued principal water body. The Judge accepted that there would have been a diluting factor as the stream flowed away from the point of discharge and that no long lasting effect had been identified.
[6] The Judge noted that it was impossible to quantify the effect the discharges from the irrigation pipe would have had on the ground water below the paddock but that they were potentially serious. The Judge noted the appellant’s acknowledgement that he was responsible for management of the effluent systems on the farm. He also noted counsel’s submission that the discharges were careless not deliberate, but said that they displayed a level of carelessness so high as to make that distinction meaningless. He considered it difficult to describe the appellant’s failure to shift the pipe as anything other than a deliberate failure to take the required steps given that he had been asked by a council officer in April 2009 to ensure that the pipe was moved regularly. The Judge also noted that the discharge was directly from the irrigation pipe onto the land, without the benefit of dispersal by spraying, thereby concentrating the effluent near the point of discharge. The Judge referred to counsel’s advice that since the offending the appellant had expended some $45,000 in systems upgrade but placed little weight on the level of expenditure for the purposes of penalty. It appeared to him that the appellant had simply brought an inherently unsatisfactory system up to scratch. The Judge noted that the appellant had pleaded guilty at the first reasonable opportunity and had co-operated with the council in its investigations. He noted that the appellant had two previous convictions for effluent discharge offences within the last few years. The Judge considered a fine to be the appropriate penalty but said that as the appellant now has
five convictions for dairy effluent offending he needed to be aware of the potential penalty of imprisonment. The Judge found that the offending falls within the third level of seriousness identified in Waikato Regional Council v GA & BG Chick Ltd.[1]
[1] Waikato Regional Council v GA & BG Chick Ltd (2007) 14 ELRNZ 291.
He did so on the basis that the offending displayed a real want of care and a disregard for the effects of the activities on the environment. There was an ongoing, if intermittent, discharge over seven weeks and the pond discharge was to a sensitive water body, highly toxic and was foreseeable because of the proximity of the containment area to the stream. He noted that penalties for the most serious level of offending, as this was, are in the range of $30,000 and upwards. He noted also a recent increase in the maximum penalty to $300,000 from 1 October 2009. He considered the appropriate starting point to be $35,000 for the discharge to the drain and $35,000 globally for the two discharges from the irrigation pipe. He noted that the appellant was entitled to a discount from the starting point of 33 per cent to reflect prompt guilty pleas. He then considered aggravating personal factors and found the two earlier convictions as a substantial aggravating factor for which an appropriate uplift was considered to be 33 per cent of the starting point, that effectively negating the earlier plea discount. The actual penalties imposed were
$35,000 on the discharge from the holding pond to the drain and $17,500 on each of the discharges from the irrigation pipe.
The appellant’s submissions
[7] The appellant submits that the level of fines imposed was excessive because: (a) The Judge was wrong to identify the offences as falling within level 3
of Waikato Regional Council v Chick. He submits that it should have been treated as falling within level 2 of Chick in that it was only moderately serious, the discharge from the holding pond was an unintentional one, and the incident arose from a malfunction of the system. Counsel submits that the appellant had relied on outside professional services for the maintenance and oversight of the effluent disposal system and had had the pump reconditioned on three
occasions. He submits that there was only an immediate effect on the environment and that there was a significant dissipation of the effluent reducing the effects significantly up to and beyond the point 20 metres downstream from the discharge point, where the sample had been taken. Counsel submits that the discharge from the irrigation pipe could not be considered to be large or to have had a significant effect on the environment. He submits that the discharge was to ground water rather than surface water, and that given that there was no quantification of the amount of the discharge or of the effect on the environment there must be an inference that the discharge merely had a moderate effect.
(b)The Judge was wrong to treat the existence of a previous conviction as being of such an aggravating nature as to completely counter any discount for the early guilty plea. Counsel submits that the uplift of
33 per cent for the previous convictions was excessive and that the Judge should have placed weight on the steps the appellant took after those earlier convictions to upgrade and maintain the system, including instructing outside experts over a period of time and expending a considerable sum of money to ensure the system was operating efficiently and properly.
(c) The Judge gave insufficient weight to the effect of costs and expenses incurred by the appellant in both the maintenance and upgrading of the system. The appellant submits that the Judge was wrong to place little or no weight on the expenditure of $45,000 on system upgrades following the offending. As to the Judge’s view that such expenses should simply have been incurred previously to avoid the incidents, the appellant submits that he had placed reliance on the expertise of others and believed that what he was doing was appropriate to ensure that the system was well maintained. He claims that the level of expenditure reflects a high level of remorse. He submits that the level of remorse is also evidenced by the fact that he has not attempted to lay blame on his sharemilker.
The respondent’s submissions
[8] Counsel for the respondent submits that the offending involved a high level of carelessness or deliberateness and that the advisor cannot be blamed for the discharge from the pond, because it was evident to the appellant that the sump was full, or the discharge from the irrigation pipe, because it was the appellant’s responsibility to have it moved. The respondent submits that the analysis from samples established that the pond discharge was highly toxic and that the discharge from the irrigation pipe may have entered ground water. Counsel submits that there has been an upward movement in the level of fines imposed under the Act in the area of dairy effluent, as noted in Calford Holdings Ltd & Park v Waikato Regional
Council.[2] Counsel also submits that single discharge events are unhelpful when
considering the sentence for continuing offences, as noted in Plateau Farms Ltd v
Waikato Regional Council.[3]
[2] Calford Holdings Ltd & Park v Waikato Regional Council HC Hamilton CRI-2008-419-94/97,
26 May 2009 at [36].
[3] Plateau Farms Ltd v Waikato Regional Council HC Rotorua CRI-2007-463-16,
17 September 2007.
[9] Counsel submits that the 33 per cent uplift is appropriate because the two previous convictions are recent, involve similar offending and because there is a need for specific deterrence. Counsel submits that the appellant was given credit for his system upgrades when he was sentenced in May 2007. Counsel submits that it is not unusual that the Court refuses to give credit for improvements to the system. Counsel also notes that the higher maximum penalty of $300,000 applies to the two offences on 1 October 2009, and that the third offence was a continuing offence for which the maximum fine was $10,000 per day.
[10] In Waikato Regional Council v Chick,[4] Judge Whiting identified a range of starting points for offending involving the discharge of dairy contaminate. He noted that the stating points were no more than a guide and were to be applied with flexibility.
[4] Waikato Regional Council v GA & BG Chick Ltd, above n 1.
Level 1 — least serious — $0 - $15,000
[24] This range of offending reflects unintentional one off incidents occurring as a result of a system failure. The range of penalty reflects the spectrum from the rarely used but wide discretion to discharge without conviction, to offending which encompasses some failure to adequately maintain the system, or failure to take timely restorative action. It also reflects little or no effect on the environment.
Level 2 — moderately serious — $15,000 - $30,000
[25]This range of offending reflects 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 the system. The offending is often manifested by a reluctance to address the need for a safe system of effluent disposal, resulting in delays in taking restorative action. It also reflects little or at the most a moderate effect on the environment.
Level 3 — more than moderately serious — $30,000 plus
[26] This range of offending reflects the more serious offending.
Offending that is deliberate, or if not deliberate, is occasioned by a real want of care. It is often associated with large plural discharges
over time or one large one off event. It often exposes a disregard for
the effects on the environment.
[11] In addition relevant considerations of sentencing that have been held to be generally applicable under the Resource Management Act, alongside the principles in the Sentencing Act 2002, are the nature of the environment affected, the extent of the damage, the deliberateness of the event and the attitude of the defendant: Machinery Movers Ltd v Auckland Regional Council;[5] Selwyn Mews Ltd v Auckland
City Council.[6]
[5] Machinery Movers Ltd v Auckland Regional Council [1994] 1 NZLR 492 at 503.
[6] Selwyn Mews Ltd v Auckland City Council HC Auckland CRI-2003-404-159, 30 April 2004 at [35].
[12] Relevant features of this offending are that it affected both ground water and a tributary to the Manganui River, a catchment with high ecological and amenity values. The discharge from the holding pond into that tributary was highly toxic resulting in the greater part of a 20 metre stretch of the stream being rendered toxic by ammonia without any lasting effects. The discharge to ground water from the
irrigation cannot be quantified but it was ongoing. The Judge also considered that there was a high level of carelessness as it was apparent that the holding pond and containment area did not have capacity to deal with the dairy effluent in conjunction with the level of rainfall which could reasonably be expected. The containment pond had been established a few metres from the farm drain, so the consequences of an overflow from the system should have been apparent. The system required close supervision and management and it was evident that the pond was full to capacity. The discharge was not the result of pump problems and the appellant’s knowledge that there were problems with the pump should have put him on notice that he needed to be vigilant. The failure to shift the irrigation pipe after being told to do so by the Council was regarded by the Judge as a deliberate failure to take the required steps.
[13] In the light of those findings, the Judge was entitled to reach the conclusion that the appellant had acted with real want of care. I consider that the appellant has not demonstrated that the Judge’s placing the matter within category 3 of Waikato Regional Council v GA & BG Chick Ltd was inappropriate.[7] Chick has been widely used as providing a framework and scale within which sentencing for offending such as this can be considered.
[7] Waikato Regional Council v GA & BG Chick Ltd, above n 1.
[14] The appellant submits that the total level of fines imposed by the Judge is greatly excessive, having regard to comparable cases and the appellant’s level of culpability. He refers to the following decisions in support of this ground of appeal:
• Taranaki Regional Council v Fabish Bros Farms Ltd DC New Plymouth CRI-2008-043-1764/5, 18 August 2008: In this case, a travelling irrigator had stalled, with the result that effluent was flowing over land into a stream tributary. Discolouration of the stream was still visible 600 metres downstream. A later inspection again found that the irrigator was detached and that effluent was discharging over the ground into a neighbour’s property and into a stream, with discolouration appearing 230 metres downstream. The Court considered that the failure to maintain the system involved a high degree of carelessness, and adopted a starting point of $27,500.
• Taranaki Regional Council v Harris DC New Plymouth CRI-2008-
043-2139, 18 August 2008: A travelling irrigator had failed and effluent flowed into a manhole and into a local tributary. There was
discolouration for up to five kilometres downstream, and there was a high level of contamination 400 metres from the point of discharge. The Court considered that the defendant’s failure to maintain and supervise the system involved a high level of carelessness. The defendant was a small operator, and the Court held that a starting point of $20,000 was appropriate.
• Waikato Regional Council v B & B Singh Ltd DC Hamilton CRI-
2008-039-232, 20 October 2008: The offences in this case included effluent flowing from a paddock into the drainage system; a channel being deliberately cut from one of the effluent holding ponds to the drainage system; discharge along the channel; and a disconnected pipe flushing effluent into a drain. Three of these offences were continuing offences. The Court took a starting point of $20,000.
• Waikato Regional Council v Broom Park Limited DC Hamilton CRI-
2008-072-103, 26 March 2009: This case concerned two discharges from a holding pond to a drain. The Court adopted a starting point of $28,000.
• Taranaki Regional Council v Andrews DC New Plymouth CRI-
2009-043-2181, 16 July 2009: Here effluent was overflowing from the effluent pond into a nearby stream, and leachate flowed into a stream via a trench that an employee had dug. There was sewage fungus 700 metres downstream from the pond and 820 metres from the leachate pond. The Court considered that these were two distinct discharges and that the defendant had displayed real want of care. It adopted a starting point of $30,000 for each charge.
•Waikato Regional Council v Hillside Farms Ltd and Crafar DC Hamilton CRI-2008-019-2997, 28 August 2009: This case involved four defendants who faced a large number of charges for offending over a period of months. A global starting point of $80,000 was adopted.
[15] I consider that those decisions do not support the submission that the Judge’s starting points for each of the offences were too high. There is evident, in the cases involving effluent discharges, a clear pattern of increasing concern as to the seriousness of this category of offending, and as to the need for sentences which reflect the sentencing purpose of deterrence. The substantial increase in the maximum penalties, which came into force on the day of this offending, similarly reflects the level of public concern. I consider that the sentences both individually and in accordance with the totality principle were within the range available to the sentencing Judge.
[16] As to the submission that the Judge was wrong to place little or no weight on the level of expenditure by the appellant on system upgrades following the
offending, the Court considered that this expenditure was commendable, but that it begged the question as to why such systems were not in place in the first instance. In my view, the Judge was entitled to take the view that the appellant’s expenditure was not a mitigating factor requiring specific recognition in the penalty. For these reasons, I reject the first and third grounds of appeal.
[17] The second ground of appeal involves the relativity between the uplift for previous convictions and the discount for the guilty plea. In calculating the percentages for the uplift for previous convictions, and the reduction for the guilty plea discount, the Judge has used the same reference point, namely the starting point of $70,000.
[18] In respect of the uplift, the starting point was the appropriate reference point. I consider that an uplift of one third from that starting point was within, at the upper end of, the range appropriate to reflect the previous offending.
[19] On the application of the discount for the guilty plea, the Judge erred in calculating the one third discount by reference to the starting point. As R v Hessell makes clear, the application of the discount is to be the final step in the process.[8]
Accordingly, the discount should have been applied after the uplift had been incorporated. The uplift for the previous convictions, at one third to the starting point of $70,000, is (in round figures) $23,000, giving a total of $93,000. The discount of one third should have been applied to that figure. That yields a discount of $31,000, and an end sentence of $62,000.
[8] R v Hessell [2009] NZCA 450 at [21].
[20] The test, on an appeal, is whether the end sentence is manifestly excessive. I do not consider it appropriate to approach this appeal by considering whether the end sentence might have been within the available range, if the correct approach to the guilty plea discount had been adopted. A quantifiable error in reaching the end sentence has been made. A decision that the end sentence was not manifestly excessive would necessarily involve an increase in the starting point. While the Court may, on a defendant’s appeal, increase the sentence, that will not often occur. I consider that the error on the part of the sentencing Judge must be corrected.
[21] The appeal is accordingly allowed. The fines are quashed and the following fines are substituted:
(a) On the charge of discharging dairy effluent from a holding pond containment area the appellant is fined the sum of $31,000;
(b)On each of the charges involving discharges from the irrigation pipe the appellant is fined $15,500;
(c) In each case the order for solicitor’s costs and Court costs remain in place; and
(d)The direction pursuant to s 342 of the Resource Management Act that the fines, less 10 per cent Crown deduction, be paid to the Taranaki
Regional Council will apply to the fines as substituted.
Solicitors: Mooney & Webb, New Plymouth for Appellant
Crown Solicitor, New Plymouth for Respondent
“A D MacKenzie J”
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