Southland Regional Council v 407 Dairies Limited DC Invercargill CRI-2011-025-1058 [2011] NZDC 2033 (5 December 2011)

Last Updated: 26 September 2016

IN THE DISTRICT COURT
AT INVERCARGILL

CRI-2011-025-001058 CRI-2011-025-001057

BETWEEN SOUTHLAND REGIONAL COUNCIL

Informant

AND 407 DAIRIES LIMITED

BRIAN JOHN ADAMS Defendants

Hearing: 5 December 2011

Appearances: B Slowley for the Informant R Lindsay for the Defendants

Judgment: 5 December 2011

NOTES OF JUDGE B P DWYER ON SENTENCING

[1] Brian John Adams and 407 Dairies Limited (the company) have each pleaded
guilty to separate charges that on 11 February 2011 at Gummies Bush, near Riverton, they discharged a contaminant, namely dairy shed effluent, on to land in circumstances which resulted in that contaminant entering water, namely a tributary of the Aparima River. Each is hereby convicted accordingly.
[1] The offending took place on a farm property owned by the company.
Mr Adams is a director of, but not a shareholder in, the company and is the farm manager. The offending arose from operation of a travelling irrigator and was discovered by a Council contractor who was checking on the farm's effluent disposal system. The irrigator had stalled on a sloping section of land causing run-off down a lane into a tile drain and then into a small waterway which was a tributary of the Aparima River.
[1] The river is one of the four major rivers in Southland. It is an important
fishing and recreational river. The town of Riverton draws its drinking water from

SOUTHLAND REGIONAL COUNCIL V 407 DAIRIES LIMITED & ANOR NZEnvC INV CRI-2011-025- 001058 [5 December 2011]

the river downstream of the point of discharge. Sampling and testing of water by the Council established that the discharge was consistent with dairy shed effluent diluted by a factor• of 20 to 40, which would have had only minimal impact on water quality although the impact may have been greater prior to the time of testing.

[4] There is no dispute that on the day of the offending an employee (a Mr David
Bowman) was the person responsible for operation of the travelling irrigator. The farm manager, Mr• Adams, was having a day's leave. (The company obviously acts through you Mr Adams.)
[4] There is a dispute between the company and Mr Adams on the one hand and
Mr Bowman on the other, as to the extent of training in operation of the travelling irrigator which Mr Bowman had received and whether or not he was advised as to the presence of tile drains in the paddock.
[4] The company also advises that it told Mr Bowman what the terms of its
resource consent were. Mr Bowman cannot recall that. I accept the company and Mr Adams' view of that matter. Ultimately I consider that I do not have to resolve the disagreement between these present defendants and Mr Bowman as to his training.
[4] Putting the dispute as to the adequacy of training to one side the company
and Mr Adams submit that their real failure was a failure to supervise a relatively inexperienced employee who they say appeared to have become disinterested in his position. I accept that submission.
[4] Once the discharge was discovered it was immediately rectified. Mr Adams
now has sole responsibility for operation of the irrigator. The Council's last inspection found full compliance. Mr Adams co-operated fully with the Council in its investigation. The company and Mr Adams both entered guilty pleas at the earliest possible opportunity.
[4] In the context of those facts I now consider the situation of the company and

Mr Adams and the company that there is no double penalty involved in their fines. Mrs Lindsay appears to accept that position.

[10] All counsel have referred to and are in agreement as to the relevant provisions of the Sentencing Act 2002. I have factored those provisions into these considerations. Ultimately, I have concluded that the starting point for penalty considerations for Mr Adams and the company ought to be same in each case. The company is farm owner and consent holder, Mr Adams is a director of the company and the person responsible for management of the farm. They both had responsibility to ensure that effluent was properly managed.
[10] Mr Slowley, for the Council, was open in his submission that this is not the most serious case of unlawful discharge from a travelling irrigator that the Court has had to deal with. I have had regard to the dilution factor which is identified in the submissions as well. I have factored that into my starting point consideration. The Council accepted that when the discharge reached water the effects were minor and short-term. However, it must be noted that dairy effluent offences, when viewed in isolation, can often involve only minor adverse effects. The Court's concern is the ongoing and cumulative effects of discharges from the wider dairy industry, albeit caused by a small minority of farmers.
[10] Although there have been systemic problems with effluent systems on this farm (and I will return to that shortly) this particular incident arises from a one-off failure to adequately manage a travelling irrigator by an unsupervised employee. When that factor is combined with the accepted low level of environmental damage I conclude that this particular offence falls into the least serious category identified in the Chick/ decision but at the upper end of that category having regard to the degree of carelessness and failing to adequately supervise an inexperienced employee.
[10] When regard is had to the uplift in penalty levels since Chick I consider that the appropriate starting point for penalty consideration for both Mr Adams and the company is $25,000.

[14] There are substantial aggravating factors in the case of the company. It has two prior convictions for effluent discharge offences in January and March 2008. It was fined $15,000 and $20,000 respectively for those offences. There have been acknowledged systemic failures in effluent management on this farm although I have accepted that this travelling irrigator offence lies outside of those shortcomings. However I also note that the company has a history of warning letters and inspection failures.
[15] I consider that those factors, particularly the two previous convictions,
warrant an uplift from starting point of 33 percent for the company. I consider that is consistent with the uplift amount accepted by the High Court in the Yates2 decision in Taranaki. That gives a penalty of $33,000.
[14] The company is entitled to a reduction from that point of 25 percent for its guilty plea at first available opportunity. That leads to an end penalty figure of $25,000.
[17] I have considered financial capacity in terms of s 40 Sentencing Act and the
financial information I have been given. As is frequently the case, the company has substantial assets and liabilities. There appears to be a net equity in the order of $1,300,000. In those circumstances the company ought to be able to arrange its financial affairs to meet a fine in the order I have identified including, if need be, payment arrangements over time.
[14] Mr Adams, you are a first offender. That together with your co-operation and management changes lead me to the view that there ought to be a reduction in penalty of $5000 to reflect those factors. You are entitled to a further reduction in penalty of 25 percent to reflect your prompt guilty plea, which gives a usual outcome of $15,000 penalty.
[14] I have, however, considered that amount in light of your personal financial position having accepted that your position is separate from that of the company. accept that there are real issues as to your capacity to pay a fine of $15,000. Having regard to those circumstances I have determined that the appropriate fine for you is

2 Yates v Taranaki Regional Council 14/5/10, Mackenzie J, HC New Plymouth CRI-2010-443-008.

the sum of $7,500. I have assumed that you will be able to make arrangements with the Court for payment over time.

[20] Accordingly, I determine as follows:

• The defendant, 407 Dairies Limited, is fined the sum of $25,000. It will pay solicitors costs $113 and Court costs $132.89.
• The defendant, Brian John Adams, is fined $7,500. Mr Adams will pay solicitors costs $113 and Courts costs $132.89.

In each case the fines, less 10 percent Crown deduction, will be paid to Southland Regional Council.

B Dwyer
District Court Judge