Canterbury Regional Council v Knight DC Christchurch CRI-2009-061-331 [2010] NZDC 309 (18 March 2010)

Last Updated: 22 September 2016

IN THE DISTRICT COURT AT CHRISTCHURCH

CRI-2009-061-000331

CANTERBURY REGIONAL COUNCIL
Informant

v

STEPHEN GRAHAM KNIGHT
Defendant

Hearing: 18 March 2010

Appearances: K L Rusher for the Informant

J J McCall and J Ling for the Defendant

Judgment: 18 March 2010

NOTES OF JUDGE J R JACKSON ON SENTENCING

Introduction

[1] The defendant, Stephen Graham Knight, has pleaded guilty to two charges
under the Resource Management Act in relation to a property at 517 Sisters Road, Parnassus known as Waiau Pastures. The charges are:

(1) that between 11 September 2004 and 11 September 2008 he discharged a contaminant from industrial trade premises onto the land; and
(1) between 11 September 2004 and 11 September 2008 he discharged a contaminant on the land in circumstances which may result in contaminant entering water.

CANTERBURY REGIONAL COUNCIL V STEPHEN GRAHAM KNIGHT DC CHCH CRI-2009-061 000331 [18 March 2010]

[2] The maximum penalty on each charge is $200,000 or imprisonment for not
more than six months.
[2] Waiau Pastures contains about 400 hectares. The legal description of the
property is Lot 1, DP76306.
[2] The defendant, Knight, is also a director and shareholder of an electroplating
company called Falcon Electroplating Limited.
[2] In view of some rather difficult legal issues about reparation and enforcement
which have come up in this case, I am going to summarise the approach I am taking to this. I hope it is not seen to be painting by numbers if I say there appear to be at least seven steps in sentencing a resource management matter under the Sentencing Act 2002 in the light of recent Appellate Court decisions.
[2] The steps are:

• (1) Establishing and setting out the facts of the offending.
• (1) Consider reparation. This is a purpose of sentencing 1. There is an
  obligation to impose reparation unless the circumstances make it inappropriate. 2 There appears to be a general principle that if the offender’s circumstances mean that he cannot do both, reparation should be paid before a fine. There are other matters relating to sentences of reparation under s 32 that I will refer to shortly.
• (1) Establish a starting point for the fine or other punishment.
• (1) Adjust the sentence having regard to the aggravating and mitigating factors personal to the offender. Steps (3) and (4) were settled by the Court of Appeal in R v Taueki 3 [2005] NZCA 174; (2005) 3 NZLR 372. That is confirmed as applicable

1 See s 71(d) of the Sentencing Act 2002.
2 Section 12 of the Sentencing Act 2002.
3 R v Taueki [2005] NZCA 174; [2005] 3 NZLR 372

to sentencing under the RMA by the High Court in Calvert Holdings Limited

v Waikato Regional Council 4

(5) Deduct from figure (4) two other matters if applicable:

(a) An amount up to thirty three percent for an early guilty plea according
to the sliding scale set in the Court of Appeal’s guideline judgment on Guilty Plea Discounts R v Hessell 5(2009) NZCA 450
(a) Investigation costs paid to the local authority. (See Burns v Bay of
Plenty Regional Council) 6

(6) Step back and determine the appropriate sentencing package under the Sentencing Act 2002 and of course the overarching principles and purposes of that Act must guide each step above. In particular the exercise under this step will be to balance and weigh up the enforcement and reparation measures that the Court may make and the fine that the defendant should be ordered to pay.
(7) Convict and sentence the defendant. 1. The facts

[7] Turning to the first step, summarising the facts: the defendant Stephen

Graham Knight, is a director of Tabard Farms Limited which, at the relevant times, owned the land. On 1 June 2008 Tabard entered into an agreement to sell the land to a Mr Wobben or a company owned by him. Mr Wobben is the complainant in this matter. Before the sale, in fact some years before that, the property known as Waiau Pastures was a large pine plantation. However, since then the trees have mostly been removed and there are only small areas of pine trees left. The property is now a bull beef fattening property as I understand it.

4 Calvert Holdings Ltd v Waikato Regional Council [2009] NZHC 616; [2009] NZRMA 563 at para 31.
5 R v Hessell (2009) NZCA 450
6Burns v Bay of Plenty Regional Council (16 June 2009, Laing J, High Court, Tauranga, CRI-2009-470-16)

[8] The CRC first learned of the offence on Thursday 11 September 2008 when
Mr Wobben phoned the Canterbury Regional Council stating that there had been

some sort of chemical spill by the previous owner on Waiau Pastures. On
Wednesday 17 September 2008 two CRC officers conducted a site visit. They spoke to the new farm manager, a Mr Don Penney. He stated there were several 200 litre drums of copper sulphate and smaller drums of hydrogen peroxide left on the property by the previous owner, Mr Knight. A number of the drums had been removed from the property during the clean up process.

[8] The officers were then shown a small pine plantation by Mr Penney where
they observed dead or dying pine trees and dead surface vegetation. There were also lumps of both yellow and white substances in places under the pine trees and two or three large fibreglass type moulds placed in an area of pine trees near the cattle yards. Where the yellow and white substances were located, the officers noted that the surface vegetation of grass and broome was either dead or in the process of dying off. Numerous samples were taken from the affected areas and on one site, known as Site C, there was a large area of dead barren ground amongst the pine trees in the shape of a large U.
[10] Later on Thursday 25 September officers returned to the property to obtain further samples from a new area of dead and dying trees that had been located.
[10] On Tuesday 21 October 2008 CRC officer Mr Smith obtained a formal statement from Brian Coe, Stephen Knight’s farm worker. Mr Coe stated that he worked for Mr Knight in ten years in different business ventures. In particular he worked at Mr Knight’s electroplating factory in Christchurch where he had moved around, by forklift, blue and grey 200 litre containers which he stated Mr Knight would, several times a year, take to the farm. Mr Coe stated that Mr Knight was the person who gave the orders for work on the property and when questioned about possible disposal of chemicals on the property, Mr Coe denied all knowledge of it.
[10] On 21 October, the same day, Mr Smith conducted a site visit to the property and found another area of dead and dying trees that had been located. Again there was some evidence of dead surface vegetation and pine trees to these areas and

smaller lumps of a green/white substance were located on the ground under the dead vegetation.

[13] Extensive further enquiries were made by Regional Council officers about the electroplating process and the chemicals involved in that, and about how the chemicals might have come onto the land.
[13] On Tuesday 4 November 2008 Mr Smith interviewed Knight at his home address. Knight declined to make a statement on two occasions. However, he did make several admissions. He stated that he had taken drums from the factory to his farm with small amounts of diluted acid residue in them. He admitted disposing of diluted acid in pine plantation area at the time and when asked how many times he stated, “Not many”. He admitted doing all this prior to the sale of the property. He was evasive and unco-operative.
[13] In February 2009 he was rather more forthcoming to Mr Smith. On this occasion, 9 February, he stated that he had placed the 200 litre drums containing approximately six inches of liquid (that he knew was washed out acid) from the factory onto the back of his ute or trailer, filled them with water before taking them into the pine trees and pouring the liquid on the ground.
[13] He described the main area where he poured the chemicals onto the ground but was evasive regarding where he had poured the contaminant under the trees, how often, and who else was involved.
[13] The property is situated above semi-confined or unconfined aquifers and one of the sites, Site C, is approximately 30 metres from the Waiau River which when in flood would in fact cover Site C. There is no rule in the Regional Plan or proposed Regional Plan or Resource Consent for the unauthorised disposal of contaminants onto the property. None of the statutory defences are applicable to Mr Knight.

2. Reparation

[18] As I see it, there are two amounts of damage to the land both of which in many ways directly affect Mr Wobben. One is that there is an unknown amount of fairly dangerous chemicals on this land and there needs to be remedial work to remedy that. I have been given a draft enforcement order under s 314 which is consented to by Mr Knight and I propose to make that order at the end of this sentence.
[18] The other main head of damage is the loss in value of the farm. It is rather unfortunate why this matter has been raised before me now. It is pretty obvious it should have been raised a long time back. While loss of value to the farm is clearly the sort of damage that is envisaged as being remediable under a sentence of reparation under s 32 of the Sentencing Act 2002, the difficulty is that only today has Mr Wobben, through Ms Rusher counsel for the CRC, handed in what purports to be a victim impact statement although it does not in fact comply with the requirements for that.
[18] Mr Wobben has had a valuation prepared by a company called Property Advisory Limited. That report is dated 2 March 2010 and it appears to indicate that even after the proposed remediation work on the property the value of the property would have decreased by $278,000. There are a number of details which I have not had time to study here and it is most unfortunate this has come in so late.
[18] I have to say, my initial reaction is that this is really a matter for another Court but Ms Rusher has very properly drawn my attention to s 32 of the Sentencing Act and that reinforces several matters in dealing with reparation earlier in the Sentencing Act. Section 12 is headed “Reparation” and reads as follows:

(1) If the Court is lawfully entitled under Part II to impose a sentence of reparation, it must impose it unless it is satisfied that the sentence would result in undue hardship for the offender or the defendants of the offender or that any other special circumstances would make it inappropriate.

[22] In this context, I also note, as I indicated very briefly earlier, that s 14(2) says:

( 2) If a Court considers that it would otherwise be appropriate to impose a sentence of reparation and a sentence of a fine but it appears to the Court that the offender has or will have the means to pay a fine or make reparation but not both, the Court must sentence the offender to make reparation.

Then in Part 2 of the Sentencing Act I have to consider whether I should, under s 32, order a sentence of reparation and I have referred to that.

[23] Where this gets difficult is s 32(3) which states:

(3) In determining whether a sentence of reparation is appropriate or the amount of reparation to be made for any consequential loss or damage described in ss 1(c), the court must take into account whether there is or may be under provisions of any enactment or rule of law, a right available to the person who has suffered the loss or damage to bring proceedings or to make any application in relation to that loss or damage.

Sub-section (4) goes on:

(3) Sub-section (3) applies whether or not the right to bring proceedings or make the application has been exercised in a particular case and whether or not any time prescribed for the exercise of that right has expired.

Mr McCall advises me, and this appears to have been confirmed independently by Ms Rusher, that the solicitors for Mr Wobben are in fact in the course of issuing proceedings on his behalf, and have claimed the loss in value to his property. I am not sure how ss(3) and (4) of s 32 of the Sentencing Act 2002 are supposed to work. Sub-section (4) appears to suggest that if the right to bring proceedings is exercised in another Court that does not matter: I can still determine whether or not a sentence of reparation is appropriate and indeed what the amount of reparation should be.

[24] In my view, I should in this case decide it is inappropriate to do that for two reasons. One is the lateness of all this. The other is the length of time it has taken to get to sentencing today. The defendant has had to come before the Court, as I understand it, at least five times and this matter has been before the Court for over a year. Anyone charged with this kind of offence is, under the Bill of Rights Act, entitled to have it dealt with expeditiously and I do not want to delay matters further.

[25] In deciding that, I recognise that I could have ordered a reparation report under s 33 of the Act. I am concerned that that should have been done some time ago if this course was to be pursued. That really relates to the first matter which, in the exercise of my discretion I decide reinforces the second, and that is the lateness of the claim for reparation.
[25] So under that head I propose to order no reparation and Mr Wobben will need to take what action he sees fit in another Court.

3. Starting Point

The receiving environment and the extent of the damage

[25] I consider there are slightly different starting points for the two offences. In either case the scale or intensity of the offending is difficult to ascertain. Really it can only be inferred from the extent of the environmental damage caused. I have described how most of Waiau Pastures is at present pasture. However, several of the areas damaged contained rows of pines, many now dead or dying as well as grass. The five areas affected are:

Site A and Site B located in the north central portion of the property. Each of these is less than 100m2 in area;

Site C is located in the south central portion of the property and covers approximately 3140m2;

Site D is located in the north east corner of the property and covers approximately 750m2;

Site E is located is the south west corner and features a series of patches totalling approximately 33m2 spread over a total area of approximately 1000m2.

Site A - copper, chromium and zinc were found above background solid concentrations;

Site B – chromium, nickel and zinc were found;
Site C – arsenic, cooper, chromium, lead, nickel and zinc were found; Site D – chromium, copper, lead, nickel and zinc; and

Site E – chromium(?). It was obviously the pure form of chromium or a compound of it.

The total area of contamination is approximately 4000m2 and the depth of that is not known.

[29] As for deliberateness in relation to the trade contaminants discharge, the defendant submits that it was not deliberate because he was spreading watered down drums of diluted contaminants. I do not accept that it was not deliberate. It was obviously intentional. The fact of the matter is he did not dilute nearly to the extent that was necessary (if it was ever possible in fact to spread this kind of chemical out in the open and not have a “discharge”).
[29] The other reason I do not accept it was unintentional is that there is the unexplained evidence of patches of chemicals in various places around the property. I accept they were small and it is possible that they precipitated out after liquid was spread out. It is also possible that there were crystals at the bottom of the drums which were poured out as well.
[29] In relation to the discharge in circumstances where the contaminants might enter water (charge CRI-39) the potentially affected water body is the ground water from the Waiau River Catchment and any surface water body it may intercept. When the Waiau River floods, lower portions of the affected area, especially Area C, are covered by the flood water. There is a possibility of leaching into ground water (hopefully that will be remedied by the enforcement order I am going to

make). I accept that this offence was probably not deliberate but reckless as to whether contaminants found their way to water and I will take that into account in establishing a starting point.

[32] Overall, in relation to the seriousness of both offences, if not remediated, the contamination has the potential to contaminate the water of the property because the natural drainage of the land is towards the Waiau River and indeed the river may, in a flood, come to meet the land, and the contamination for that matter.
[32] The offences themselves are of a significantly serious nature in that there is no rule for the disposal of industrial waste on rural land. The effects of the dumping have affected the new owner. His land is now classed as a contaminated site. There is only a small, in my view, long-term risk off site as there are available disposal facilities for the contaminated soil. Alternatively, it may be possible, and this seems to be the remedy that the parties have agreed, for the location of a contaminant receiving pit on the land itself and in fact Mr Wobben is to be congratulated for accepting that.
[32] I also record that the starting level for these offences must reflect one of the specified parameters for sentencing which is to deter both this offender and others from similar conduct. It is a relevant consideration here because this is not the first of these kinds of matters that has come before the Court in this region in recent times. There is the matter of Environment Canterbury v Hurst 7 and there are other charges for other defendants before the Court.
[32] As far as consistency of a starting point is concerned, I have been referred to two cases. I do not find either terribly helpful. In Waikato Regional Council v Open Cheese Company Limited 8 Judge Whiting was sentencing the defendant on 11charges which includes some of dumping waste (spoiled milk) off site. A starting point of the totality of the offending was $80,000. The actual fine for the dumping charge after taking into account various mitigation matters was $15,000. However,

7 2 April 2009, District Court, Christchurch, CRI-2008-028-000082.
8 4 October 2007, District Court, Morrinsville.

these days as I understand it, the totality of offending is not really the way to look at it but each charge must have its own starting point established.

[36] In ARC v Gubbs Motors Limited,9 Judge Moore sentenced the offender where there was an accidental spill of diesel on the land and into the water with significant environmental effects. The starting point was held to be $70,000 per defendant. The final fine was $14,350. In the Hurst matter that I have just mentioned, the starting point was $40,000.
[36] Given that in the North Island the starting points seemed to be rather higher, I consider that perhaps in Hurst the defendant was lucky and I started too low. I consider in the circumstances of the offending here in relation to the discharge of trade contaminant onto land where the action was deliberate and the environmental effects were significant for the new land owner, the starting point should be $50,000 and even that may still be too low.
[36] In relation to the discharge of contaminant onto land in circumstances where it might enter water where the action is not deliberate or reckless, I consider a starting point should be $40,000.

4. Adjustment for Personal Factors - the aggravating features Aggravating factors

[36] Really the only matter here that I think does aggravate the seriousness of the first charge – the discharge of trade contaminant - is that it was deliberate rather than reckless. The defendant appears to have loaded the contaminants onto his truck. In fact he has admitted as much and has driven them up to Waiau Pastures and has spread them over the back of the truck. As the summary of facts indicated, there is at least one U turn visible in that shape in the grass in an area of pine plantation and also the defendant emptied plastic bags out onto the ground in the small plantation area.

9 20 March 09, District Court, Auckland.

Mitigating Factors

[40] The defendant has no previous convictions. He has taken part in restorative justice and he has apologised to the complainant. I have been given a report as to his personal circumstances and I consider that he is able to pay some fines even if it does require assistance from the Trust which appears to hold most of the assets he relies on. I do acknowledge that his personal income is low and that he may well have to make arrangements with the registrar to pay the fine.

[41] Accordingly, taking into account those aggravating and mitigating personal factors, I consider that the adjustment figures at this stage should be on the trade waste charge $40,000 and on the discharge to the land in circumstances where contaminants might enter water, $24,000.

5. Subsequent Adjustments

[42] The offender entered a guilty plea at the first opportunity which is a bit ironic as it has had to come back to Court so many times. So certainly he is entitled to every bit of the thirty three percent that should be deducted under R v Hessell for an early guilty plea.

[43] On my calculation that means the trade waste charge fine comes down to $26,700 and the discharge to the land to $16,000. Also I have to adjust for an order that has been requested under s 314(2) that the Canterbury Regional Council’s investigation costs of $15,925.38 are paid by the offender.

[44] I consider it appropriate that the full amount of those costs are paid because complete disclosure by the defendant might have saved a considerable amount of time and investigation.

6. Assessing the overall sentencing package

[45] The sixth step is to assess the overall sentencing package: to step back and look at what the overall fine should be.

[46] In relation to the charge of discharging trade waste, I accept that the remedial work the defendant is going to have to carry out is going to cause him a great deal of expense. His counsel has mentioned a figure of $100,000. That may or may not be correct but bearing in mind that a lot of pine stumps have to be removed, a contaminant removal pit created (there is extensive work necessary to build that) and in due course to backfill and cover it over and place top soil, I can accept that those figures are probably realistic.
[46] In all the circumstances I consider that the appropriate fine on the trade contaminant discharge is in the region of $5,000 which takes into account a small amount of allowance for the CRC’s costs of investigation. Most of the costs of investigation I intend to offset against the discharge to land in circumstances where the contaminants might enter water. That is CRI suffix 38. There I envisage dropping that figure which I adjusted down to $16,000 I intend to put that at $1,000.

7. Outcome

[46] I make the following orders:

• (1) The defendant is convicted and fined on the trade waste charge (CRI-39), a figure of $5,000. The defendant is convicted and fined on the discharge to land (charge CRI-38), the sum of $1,000.
• (1) The defendant is ordered to pay Court costs of $130 and solicitors’ costs of $113 on each charge.
• (1) Under s 342 of the Resource Management Act 1991 the fines, less ten percent, are to be paid to the Canterbury Regional Council.
• (1) I will make an enforcement order under s 314 of the Resource Management Act as handed up to me by counsel and consented to by the offender, with two sets of changes:

• (a) There are some drafting changes in para 2 that I will make before releasing the order but I do not think they in any way affect the substance of the order.

(b) With respect to condition 6, I propose that that should read:

“The respondent shall ensure that excavation of Sites A-E and the CRP of

contaminant and the removal of all trees is supervised by an experienced
and suitably qualified environmental professional (not being Mr Knight) and that the excavation works are performed by a suitably qualified independent contractor (but not Mr Knight) approved by Mr Wobben, such approval not to be unreasonably withheld.”

(5) Under s 314(2) the total investigation costs of $15,925.38 are to be paid to Canterbury Regional Council.

J R Jackson
District Court Judge

Solicitors: K L Rusher, Environment Canterbury

J J McCall, Papprills, Christchurch