Hawke's Bay Regional Council v Hawke's Bay Protein Limited [2022] NZDC 22394 (8 December 2022)

Last Updated: 16 December 2022

IN THE DISTRICT COURT AT NAPIER I TE KŌTI-Ā-ROHE KI AHURIRI

CRI-2021-041-001929 via AVL [2022] NZDC 22394

HAWKE’S BAY REGIONAL COUNCIL Prosecutor

v

HAWKE’S BAY PROTEIN LIMITED Defendant(s)

Hearing:	11 October 2022
Appearances:	N Graham for the Prosecutor B Watts and O Thompson for the Defendant
Judgment:	8 December 2022

SENTENCING DECISION OF JUDGE MJL DICKEY

Introduction

[1] Hawke’s Bay Protein Limited (HB Protein) has pleaded guilty to one charge of discharging a contaminant (odour) into air from an industrial or trade premise on 19 March 2021 at Briasco Street, Awatoto, Napier, contrary to ss 15(1)(c), 338 and 339 of the Resource Management Act 1991.

[2] The maximum penalty is a fine not exceeding $600,000.

[3] Ms Graham, on behalf of Hawke’s Bay Regional Council (HBRC), proposed a starting point of $25,000. Mr Watts, on behalf of HB Protein, proposed a starting point of $10,000. The defendant has also applied for a discharge without conviction.

Background1

[4] HB Protein is a duly incorporated company that operates a rendering plant (not in conjunction with an abattoir) from premises in Awatoto, Napier. The rendering plant is located in an industrial area surrounded by a number of large industrial sites, including the Napier Waste Water Treatment Plant and Biorich Compost.

[5] HB Protein holds a resource consent from HBRC that authorises the discharge of contaminants into the air, including odour from three biofilters, from the Company’s rendering plant in Awatoto, Napier subject to a condition which requires that “there shall be no objectionable or offensive odour to the extent that it causes an adverse effect at or beyond the boundary of the site”.

[6] The defendant invested in a significant overhaul and upgrade of its extraction system in early 2020, including replacing the biofilters. The upgrade cost more than

$1,000,000 and involved HB Protein engaging two industry experts, Rendertech Limited (Rendertech) and Golder Associated (NZ) Limited (Golder).

[7] At the time the upgrade began, HB Protein had not applied for nor been granted a variation to the conditions of its resource consent to make them consistent with the upgrade. However, HBRC was aware of the upgrade and HB Protein updated it throughout the process. Once HBRC advised the company that its resource consent conditions required amendment, HB Protein actioned this and lodged an application.

The offending2

[8] On 27 February 2021 at 8:50pm HBRC received a complaint relating to odour. The complainant advised that the odour had been an issue for a few hours and identified the smell of the rendering plant, cow effluent, offal and fish. HB Protein

1 Agreed Summary of Facts at [1] – [4].

2 Agreed Summary of Facts at [5] – [7].

accepts that the rendering plant odour is attributable to its site, but the remaining odour is not. A Council officer responded to the complaint and visited the complainant’s property, where he conducted an odour assessment and confirmed the presence of odour that was considered to be objectionable. A 360 degree assessment was then completed isolating an odour coming from the rendering plant. HB Protein was advised of the confirmed odour.

[9] On 19 March 2021 at 5:15pm a further complaint was received from a resident in Awatoto. The resident reported that it was a “strong sewage type odour could be biorich or waste water treatment plant”. Again a Council officer attended. Odour assessments confirmed the presence of an objectionable odour. The odours identified included rotting meat, animal effluent and waste-type odour as well as a bark filter smell. After a full 360 degree assessment an odour was isolated to the defendant’s site. HB Protein only accepts that the bark filter smell may be attributable to it.

Internal investigation3

[10] Following the first complaint, the company completed an internal investigation and engaged Golder to provide expert advice. Golder embarked on the process of diagnosing the cause of the odour. It initially advised HB Protein that the upgrades that had been completed on the plant had resulted in the boiler steam being directed to the concentrated sources biofilter, which had compromised the odour treatment process. Golder recommended a number of corrective actions that HB Protein immediately implemented. Due to the nature of biofilters, it can take months for them to fully recover their function and it can be difficult to assess the efficacy of corrective measures straight away.

[11] Following the second complaint, HB Protein was again advised of the confirmed odour and following continued engagement with Golder (which the defendant had been doing since the first complaint in order to work through the balancing of the biofilter), it was identified that the cause of the odour was actually due to the concentrated sources extraction sending too high a volume of air to the

3 Agreed Summary of Facts at [6] – [7].

concentrated sources biofilter. The defendant advised HBRC immediately and implemented a number of further corrective actions recommended by Golder.

[12] There have been no odour complaints attributable to HB Protein’s rendering plant since the second complaint.

[13] The charge relates to the second odour incident on 19 March 2021. The discharge of odour was contrary to s 15(1)(c) of the Act and to the defendant’s resource consent.

Sentencing principles

[14] The purposes and principles of the Sentencing Act 2002 are relevant. The High Court in Thurston v Manawatu Wanganui Regional Council4 provides a useful summary of the approach to be taken to sentencing, which includes consideration of culpability; precautions taken to prevent discharges; the vulnerability or importance of the affected environment; extent of damage; deterrence; capacity to pay a fine; disregard for abatement notices; co-operation and guilty pleas.

Environmental effects

[15] Ms Graham submitted the fact that complaints were received show that the odour had an adverse effect on the amenity and enjoyment of residents.

[16] Mr Watts submitted that, without minimising the impact of the odour effects, the extent of environmental damage and vulnerability of the affected environment was minimal. The offending involved a short odour discharge, it was no more than a very transient event with no permanent effects. No damage to the environment occurred as a result of the offending. Mr Watts submitted that the impact on affected individuals was very minor.

[17] HB Protein maintains that only some of the odours identified were attributable to its plant. HB Protein’s plant is located within an industrial area, surrounded by

4 Thurston v Manawatu Wanganui Regional Council HC Palmerston North CRI-2009-454-24, - 25, - 27, 27 August 2010.

several other potential odour sources. Mr Watts submitted, therefore, that when assessing the seriousness of the offence consideration should be given to the possible intermingling of odours that were ultimately experienced by the complainant.

[18] There is no doubt that objectionable odours can adversely affect the occupiers of properties affected by them. They impact amenity, enjoyment of their property and environment, and in certain cases their health. In this case the odour appears to have been of short duration and was quickly corrected. I find the adverse effects of the discharge to have been low.

Culpability

[19] Ms Graham submitted that HB Protein’s operation is an odorous one but also a profitable one. While efforts to avoid odour causing a problem for surrounding residents is always positive, upgrades to the systems and equipment are a necessary cost of business to ensure that it keeps within the bounds of the consents under which it operates. However, it was accepted that the fact the upgrades were done show that HB Protein is trying to improve its processes, and that is a factor that the Court will take into account in assessing culpability.

[20] Ms Graham highlighted that HBRC expressed concern at the time of the upgrades that the upgrades were being made without an application being made for resource consent or to vary the existing consent. This was despite HB Protein being advised that HBRC considered consent was required. Ms Graham notes that it is not known whether the consent process would have assisted to avoid the problems that were identified after the odour discharges. Further, while HBRC was aware of the upgrades and there was contact between the entities, it cannot be said that the process was entirely cooperative.

[21] Mr Watts submitted that HB Protein’s culpability can be described as minimal. Well before the offending occurred, HB Protein had made conscious and determined efforts to improve its systems and to prevent any odour discharges from its plant. It essentially took all possible steps to minimise the risk of odour discharges. It completely overhauled its extraction systems, which included replacing the biofilters. In order to minimise the risk of issues arising during the process, HB Protein engaged

expert Rendertech to implement the upgrade. HB Protein then went further and engaged another expert, Golder, to finetune the extraction system once the upgrade had occurred. Mr Watts submitted these actions were proactive and demonstrate the company’s commitment to compliance with its resource consent and with the RMA.

[22] Mr Watts submitted the odour discharge was essentially the result of fine tuning the upgrades. It was entirely unexpected and ultimately avoidable. HB Protein was therefore in a lose-lose situation, whereby if it had not upgraded its systems then it would have most likely received further odour complaints. The upgrade was comprehensive and well executed, yet an unfortunate teething issue with the biofilter resulted in a discharge of odour.

[23] In response to the prosecutor’s submissions regarding the upgrades being made without resource consent, Mr Watts submitted that the upgrades were required to ensure HB Protein was compliant with its existing resource consent condition that there shall be no offensive or objectionable odour discharged from HB Protein’s premises. He also submitted that there is no evidence that the requisite resource consent variation would not have been approved if it were applied for when the upgrades first started. Finally, the agreed summary of facts states that HBRC were aware of the upgrade, HB Protein updated it throughout the process, and once HB Protein was advised its resource consent conditions required amendment it actioned this. Mr Watts therefore asked the Court to disregard the Prosecutor’s submissions in relation to this matter.

[24] Mr Watts submitted that the fact that HB Protein’s business is a profitable one should carry little weight when considering its culpability.5

Evaluation

[25] HB Protein is to be commended for the upgrade to its air extraction system. The lack of odour complaints since March 2021 points to the success of that upgrade. The record of previous complaints, however, points to the need for an upgrade.

5 Counsel referred to Hawke’s Bay Regional Council v The Te Mata Mushroom Company [2018] NZDC 16898 at [14].

[26] However, it is for note that the defendant required a variation to its resource consent to authorise the new extraction system. That variation has not yet been secured. I am advised that the application has been submitted, and a decision made on notification. It is expected that the application will soon be notified.

[27] I understand that there was no particular imperative to ‘turn the switch’ on the new extraction system ahead of obtaining a variation to the resource consent, save the desire to limit the potential for further odour discharges.

[28] The new system was made operational in December of 2020. Like all new systems, there needed to be minor adjustments made to ensure optimal performance. One of those adjustments occurred after the date of the offence.

[29] The Council submitted that HB Protein’s failure to obtain a variation to its resource consent prior to operating the new system contributes to its culpability. HB Protein submitted that HBRC has not pointed to anything it could have done differently with its system, and it is unknown whether the consent process would have assisted in avoiding the problems.

[30] The fact remains that a variation was required to vary the consent and was not obtained. It is mere supposition to assert that the consenting process would add nothing to the outcome or would have avoided the discharge.

[31] While the odour discharge arose from teething problems with the new system, I cannot ignore the fact that a variation to the resource consent is required. I therefore find that the defendant should have exercised more care in ensuring its house was in order before switching to the new system.

Starting point

[32] Ms Graham referred me to the following decisions: Canterbury Regional Council v Wallace Group Limited Partnership (Wallace Group);6 Hawke’s Bay

6 Canterbury Regional Council v Wallace Group Limited Partnership [2020] NZDC 24846 – one charge of discharging a contaminant (offensive and objectionable odour) to air from a rendering and animal skinning plant. The Court found that the offending caused a temporary moderate degree of harm, namely detraction from residential amenity values, undermining public confidence in the RMA, cost to ratepayers, and inconvenience. There was no deliberateness, and the offending concerned an unintentional escape of offensive and objectionable odour from the plant building and/or from the temporary outdoor stockpiling of material following a plant breakdown. Starting point of $30,000.

Regional Council v Emmerson Transport Limited (Emmerson Transport);7 and the earlier Hawke’s Bay Regional Council v Hawke’s Bay Protein decision.8

[33] The Council submitted that a starting point of $25,000 is appropriate.

[34] Mr Watts submitted that a careful analysis of the cases cited by the Council does not support the prosecutor’s proposed starting point. He submitted that the current facts of this case are entirely distinguishable from the offending in Wallace Group and in Emmerson Transport, particularly on the basis that there was a significant degree of contingency planning done by HB Protein to address the foreseeable prospect of plant failure or disruption.

[35] Mr Watts submitted there was a high degree of carelessness in Wallace Group that is not present in the current offending. HB Protein took all possible care, acting under the advice of two industry experts that it had engaged. He noted that there has been no suggestion of what HB Protein should have done differently. HB Protein was acting responsibly, but perfectly balancing the odour extraction system on the first attempt turned out to be a task that was beyond even the technical experts. The only way this could be discovered was by running the plant – if modelling could have predicted the issues, then the experts would have configured the system differently from the outset. Mr Watts submitted HB Protein’s culpability does not extend much, if at all, beyond the fact that the discharge originated from the plant it owns and operates. He submitted HB Protein’s culpability is in a markedly lower category than the defendant’s culpability in Wallace Group or Emmerson Transport.

7 Hawke’s Bay Regional Council v Emmerson Transport Limited [2021] NZDC 18751 – one charge of discharging a contaminant (odour) to air from an industrial or trade premise (road transport company yard, offal bins). The Court stated that there were no physical effects as a result of the offending. However, three victim impact statements demonstrated that people at the businesses in the vicinity experienced and were affronted by the odour. The Court concluded that the effects of the offending were moderately serious. As to culpability, the Court found the company to have been careless. There was a failure in ETL’s systems in that there was no process in place to cover for the absence of senior managers and the supervisor on site. However, the starting point recognised that the events leading to the delayed arrival of offal to the site were unusual and outside ETL’s control. Starting point of $25,000.

8 Hawke’s Bay Regional Council v Hawke’s Bay Protein [2021] NZDC 4097 – five charges of discharging a contaminant, namely odour. No physical effects from the offending, the environmental damage was limited to societal effects – the odour had an adverse effect on the amenity and enjoyment of residents. The Court assessed the effects as transitory but moderately adverse as they occurred on five days over a nearly one-month period. The company’s culpability was placed at the lower end of the scale, the company was actively taking steps to reduce the risk of offensive or objectionable odours being emitted. Starting point of $55,000.

[36] Mr Watts submitted frequency is a distinguishing factor in relation to Emmerson Transport. The current offending only involved one complaint on the date of the offence, whereas there were three separate complaints in Emmerson Transport. Further, the impacts of the odour in Emmerson Transport caused headaches, nausea, and adverse consequences for affected businesses, which are far more serious than the impacts in the current offending.

[37] While he accepts that HB Protein’s previous offending in 2020 will be relevant to the sentencing, Mr Watts submitted that it is unclear how the starting point in that case assists the Court in setting the starting point here. He noted that the 2020 offending involved five separate charges, which were caused by an issue with HB Protein’s rendering processes rather than its biofilter, thus it has limited application to the current offending.

[38] Mr Watts referred me to Hawke’s Bay Regional Council v NZ Juice Group Limited (NZ Juice).9 He submitted that the starting point for the current offending should be lower than that in NZ Juice because the discharge in NZ Juice was far less transient than the current discharge. Moreover, he submitted that the reason and cause behind the discharge in NZ Juice differs from the current offending.

[39] Mr Watts submitted the mitigating factors of the offending are as follows:

• (a) infrastructural or other precautions taken by HB Protein to prevent discharges: HB Protein had undertaken extensive infrastructural works to upgrade its systems to ensure compliance with its resource consent and the RMA. It also took further precautions by engaging Rendertech and Golder to assist with the upgrade and minimise the risk of discharges occurring. These steps were taken well before the offending occurred, and even before the upgrades began HB Protein had undertaken significant work to reduce odour from the plant. Issues with extraction systems can be difficult to
  

9 Hawke’s Bay Regional Council v NZ Juice Group Limited [2022] NZDC 16488 – one charge of discharging a contaminant (smoke and its constituents) into the air. The Court noted that fires contribute adversely to air quality, contribute to the cumulative exposure of the population to hazardous persistent pollutants, and have social effects on neighbouring properties. Culpability found to be a careless disregard for the relevant rules and environment. Starting point of $20,000.

pinpoint, so by engaging with Golder the issue with the biofilter was able to be identified and fixed quickly;

(b) response to the event: Mr Watts submitted HB Protein did more than usual practice, and that its response and subsequent behaviour should be considered a mitigating factor:10

• (i) HB Protein was cooperative throughout the Council’s investigation and prosecution. Following the complaint, the Plant Manager of HB Protein immediately spoke with the Council investigator, and within a few days provided them with a comprehensive investigation report. HB Protein complied with all council directions and provided all information sought by the investigator;
  
• (ii) following the complaint being received, HB Protein immediately took all steps necessary to rectify the problem. An internal investigation was done, and Golder’s assistance was sought. HB Protein continued engaging with the expert. This allowed it to ultimately identify the actual issue with the biofilters, which was remedied quickly;
  
• (iii) HB Protein has not had any verified complaints since those made in February and March 2021. It was submitted that HB Protein is unlikely to reoffend; and
  
• (iv) HB Protein has continually updated the Council about its upgrades over the past few years. It has also regularly invited Council staff to site to see the upgrades and any issues which HB Protein may be facing. HB Protein invited Council staff to site visits in April 2021 and December 2021, but these invitations were declined.
  

[40] Mr Watts submitted that a starting point in the vicinity of $10,000 is therefore appropriate.

10 Counsel referred to Taranaki Regional Council v Remediation (NZ) Limited DC New Plymouth CRI-2010-043- 2334, 17 November 2010.

[41] I acknowledge the significant upgrades the defendant has made to its plant. Despite that, due to teething problems an odour discharge occurred. While it completed the upgrades, the company failed to vary its resource consent to authorise the new system before it was put into operation. While the purpose of the new system, to avoid further odour emissions, cannot be questioned it cannot relieve the defendant of the need to comply with its regulatory responsibilities. I cannot ignore that failure and consider therefore that a starting point of $20,000 is appropriate.

Application for discharge

[42] I now consider the application for discharge.

[43] HB Protein made an application for a discharge without conviction. The Council opposed the application.

[44] Sections 106 and 107 of the Sentencing Act 2002 apply. The established three stage analysis for discharge without conviction is: first, the gravity of the offending (taking into account all aggravating and mitigating factors of the offending and the offender); secondly, what are the direct and indirect consequences of a conviction on the defendant; and, thirdly, an assessment of whether those consequences are out of all proportion to the gravity of the offending. Overall, the Court retains a discretion to grant or refuse the application after considering those matters.

Gravity of the offending

[45] Mr Watts submitted that HB Protein’s offending is at the lowest end of the scale in terms of both environmental impact and culpability. He submitted that the company is charged with a single offence which arose from a single complaint, and there have been no odour complaints since the issue with the plant was fixed in March 2021.

[46] Mr Watts submitted there were a number of mitigating features relating to the offending, which should be considered when assessing the gravity of the offence. These are:

• (a) the lack of culpability. He submitted that culpability is very low, because the company was already upgrading its facilities at significant expense; it was acting in accordance with expert advice; the odour discharge was essentially the result of fine tuning the upgrades, and the upgrades have since proved to be successful, as demonstrated by the lack of complaints over the past 18 months;
  
  • (b) the seriousness of the offence. Mr Watts submitted the offence comprises a single charge and a single complaint relating to an odour discharge over a relatively short period of time. Moreover, he submitted that while HB Protein accepts responsibility for the offence, it does not accept responsibility for all odours that were detected in the relevant odour assessment. He therefore submitted that consideration should be given to the potential intermingling of the odours that were experienced by the complainant;
    
  • (c) work done prior to, and immediately after the offending to ensure compliance. Mr Watts submitted that before the odour discharge occurred, HB Protein had already taken extensive, proactive steps to upgrade its facilities;
    
  • (d) guilty plea. HB Protein immediately sought to enter a guilty plea once the parties reached a resolution. Mr Watts submitted that the guilty plea should be considered to have been entered at the earliest opportunity;
    
  • (e) remorse. Mr Watts submitted that HB Protein is genuinely remorseful for the impact of the odour on the affected neighbour, and was extremely disappointed that the upgrade did not immediately work as expected. HB Protein has written to the neighbours and has offered to supply and plant trees and other plants along the boundary between its neighbours and the plant. It has transferred $20,000 into counsel’s trust account which it intends to use as follows:

• (i) $10,000 for boundary planting for HB Protein’s residential neighbours who have been affected by the odour discharge; and
  • (ii) $10,000 offered for Ravensdown Awatoto Habitat Abundance Restoration (RAHAR).
    
  
  
  • (f) compliance with the investigation; and
    
  • (g) HB Protein has not had any odour complaints since the issue with the biofilters was identified in March 2021. It is unlikely to reoffend.
    

[47] Mr Watts referred me to the following cases: Bay of Plenty Regional Council v Ziwi Limited;11 Taranaki Regional Council v Remediation (NZ) Limited;12 Taranaki Regional Council v Taranaki Bio Extracts Ltd;13 Waikato Regional Council v G A & BG Chick Ltd;14 and New Plymouth District Council v Chubb New Zealand.15 I have considered those cases, in particular Chubb, for it is with that case Mr Watts says the principles are directly comparable.

[48] Mr Watts submitted that just as the system in Chubb ultimately improved the safety of the building, the upgrade which resulted in the odour discharge ultimately improved HB Protein’s systems and its compliance with its resource consent.

[49] Mr Watts submitted that the gravity of the offending in this case can be considered as very low and HB Protein immediately took all possible steps to rectify the issue.

11 Bay of Plenty Regional Council v Ziwi Limited [2021] NZDC 946.

12 Taranaki Regional Council v Remediation (NZ) Limited DC New Plymouth CRI-2010-043-002334, 17 November 2010.

13 Taranaki Regional Council v Taranaki Bio Extracts Ltd DC New Plymouth CRI-2009-021-000156, 28 September 2009.

14 Waikato Regional Council v G A & BG Chick Ltd (2007) 14 ELRNZ 291.

15 New Plymouth District Council v Chubb New Zealand [2020] NZDC 9256 – the defendant was a global fire safety and security solutions provider, which completed installation of a fire safety solution in a commercial building. Due to an oversight, no building consent was obtained. The Court granted a discharge without conviction due to the defendant’s low culpability and on the basis the system had ultimately improved the safety of the building. The Court considered the possible impacts of a conviction on the defendant’s ability to tender for future projects, the negative effects on its reputation the charge had already caused, and the possible effect of those factors on its employees.

[50] Ms Graham submitted the offence is not trivial, but it is accepted that on a standalone basis it is at the lower end of seriousness as evidenced by the Council’s suggested starting point. She noted HB Protein does not come to this matter with an impeccable record. She acknowledged that significant expense has gone into upgrading HB Protein’s systems, but she submitted that is a business necessity to continue it to operate. Ms Graham submitted the problem that led to the offence has been termed a “teething” problem with the upgrade, but that does not detract from the societal impact that it had.

Direct and indirect consequences of the offending

[51] Mr Watts submitted the following adverse consequences will arise if HB Protein is convicted of the present offending:

• (a) reputational impact and public perception: Mr Watts submitted that a conviction will have a real and adverse impact on HB Protein’s reputation:
  
  • (i) while HB Protein does have previous convictions for this type of offending, some time has now passed. It is trying to demonstrate to members of the Awatoto community that it is committed to complying with its resource consent. To receive a conviction after a sustained 18- month period of compliance may undo all of HB Protein’s hard work over the past few years;
    
  • (ii) reputational impact also flows into future complaints of odour discharge in the Awatoto area. HB Protein is surrounded by other industrial premises. A conviction may result in residents assuming any future odour discharges are attributable to HB Protein. Their assumption that all odours in the area are caused by HB Protein may impact on HB Protein’s resource consent renewal in 2025.
    
• (b) relationships with suppliers and contractors: an affidavit from the Plant Manager set out that suppliers generally have a real concern around legal proceedings, and it can impact who they contract with. A recent conviction for HB Protein may cause suppliers and contractors to opt to work with

other businesses. Historically HB Protein has found the fact of a conviction or an investigation can make it difficult to get contractors on site;

(c) staff retention: the Plant Manager’s affidavit identifies that the current charge has been extremely demoralising for hardworking members of staff. It is difficult to get staff, and the fact of a conviction and the flow on reputational damage can make it even more difficult to retain staff. Following HB Protein’s previous convictions for the 2020 offending, job applications for vacant positions decreased. HB Protein felt this was, at least in part, a result of the adverse impact on the community’s perception of HB Protein.

[52] Ms Graham highlighted that HB Protein already has five convictions for odour discharges. The sentencing was published in the media. She submitted it is difficult therefore to see how there could be consequences to reputation. The charge makes clear that this matter is from early 2021. Owning the problem during the upgrades and pointing out that no further issues have arisen balances any concerns.

[53] Ms Graham submitted that the suggestion that receiving a conviction for this matter will somehow put HB Protein in the firing line for further complaints is insulting to neighbouring residents and HBRC, who are obliged to undertake its own assessments in determining any odour and its source. She submitted that if that were true then the guilty plea alone would do that rather than any conviction.

[54] Ms Graham submitted the consequences asserted by the defendant in relation to its relationships with suppliers and contractors and staff retention are speculative at best. The speculated consequences would equally follow the fact of a charge and guilty plea and would not be dependent on a conviction. There is no evidence that contracts will be lost.

Proportionality

[55] Mr Watts submitted the consequences of a conviction for HB Protein are moderately serious whereas the gravity of the offending is very low, such that the consequences of conviction would be out of all proportion to the gravity of the

offending. He reiterated there would be a real and appreciable risk of damage to HB Protein’s reputation, relationships with suppliers and contractors and its ability to hire and retain staff.

[56] HB Protein appreciates why strict liability applies to those who undertake activities that carry environmental risk, and it takes responsibility for the offending. However, Mr Watts submitted:

• (a) HB Protein’s culpability could not be lower. It took every effort to avoid offending;
  
• (b) the impact of the odour discharge is at the low end of the scale: a single complaint, a single occurrence, in circumstances where it appears likely that the complaint was promoted by odours from other sources too;
  
• (c) HB Protein has demonstrated a genuine commitment to the environment and being a good neighbour by investing heavily in upgrading its plant’s odour treatment capabilities, by making significant offers of reparation to the complainants, by donating to the RAHAR’s wetland project, and by accepting responsibility and entering a guilty plea.
  

[57] Ms Graham submitted there is no evidence of any real or appreciable consequences of a conviction that are over and above that which may have come with the charge or acceptance of guilt. The consequences therefore do not outweigh the gravity of the offending.

Outcome

[58] I have found that the adverse effects of the discharge are low but that the defendant could have exercised more care in ensuring its house was in order before using the new biofilter. Unlike the defendant in Chubb, it was not an oversight that the variation of its resource consent was not obtained. The company was aware of the need for it, yet over 18 months after the offending that variation has still not been obtained.

[59] I have commended the company for undertaking the upgrade and noted its remorse and proposed payments/works to neighbours and Ravensdown Awatoto Habitat Abundance Restoration.

[60] I have considered the company’s concerns about reputational impact, public perception, impact on suppliers and staff retention. It is inevitable that a conviction is a black mark on a record, especially for someone with no previous history. Given the company’s history of odour pollution I am not satisfied that the impacts outlined on the company’s behalf are likely to be as acute as is claimed. While over recent times it has spent a considerable amount of money on upgrading the system, a conviction that arises as a result of teething problems with the new plant is not a reflection on the company or the new system. It is the result of changing systems and the inevitable bedding down those systems required. I do not consider that the consequences of a conviction are out of all proportion to the gravity of the offending.

[61] Having considered the above matters, and exercising my overall discretion, I decline the application for discharge.

Aggravating and mitigating features

Aggravating features

[62] The aggravating feature of the defendant’s past history has been taken into account in determining the starting point.

Mitigating features

[63] Mr Watts submitted the mitigating factors applicable to HB Protein personally are as follows:

• (a) remorse: Mr Watts referred to the engagement with neighbours and the extent and value of the upgrades;
  
• (b) reparation: HB Protein has made two separate offers of reparation.

[64] Mr Watts submitted the appropriate discount for mitigating factors personal to HB Protein is in the vicinity of 20 percent.

[65] Mr Watts submitted the appropriate discount for the guilty plea is 25 percent as HB Protein entered a guilty plea at the earliest opportunity. Ms Graham submitted the guilty plea did not come at the first opportunity, it came after disclosure, arguing that a discount of 20 – 25 percent was appropriate. I allow a discount of 25 percent for the guilty plea as, while it came after disclosure, it was early in the process.

[66] I do not consider that it is appropriate to allow a discount for the upgrade of the defendant’s systems as those upgrades were a necessary response to ensure compliance with the conditions of its resource consent. However, it is appropriate to recognise the attempts the company has made to rebuild relationships with its neighbours and contribute to the costs of planting and to RAHAR. I allow a further discount of 10 percent. Recent advice from counsel for the company is that Ravensdown has declined to accept its contribution to the RAHAR project. The company has now offered the remaining funds to additional neighbours for boundary planting. The change of recipient does not change my view on the discount.

Outcome

[67] I have adopted the two-step methodology outlined by the Court in Moses v R.16

[68] Accordingly, Hawkes Bay Protein Limited is convicted and fined the sum of

$13,000. Ninety per cent of the fine is to be paid to the Regional Council in accordance with s 342(2) of the RMA.

Judge MJL Dickey

District Court Judge | Kaiwhakawā o te Kōti ā-Rohe

Date of authentication | Rā motuhēhēnga: 06/12/2022

16 Moses v R [2020] NZCA 296 at [45] to [47].