Canterbury Regional Council v Pattullo DC Christchurch CRI-2010-009- 14493 [2011] NZDC 2101 (15 December 2011)

Last Updated: 26 September 2016

IN THE DISTRICT COURT
AT CHRISTCHURCH

CRI-2010-009-014493 CRI-2010-009-014547

BETWEEN CANTERBURY REGIONAL COUNCIL

Informant

AND ANDREW JOHN PATTULLO

BARBARA ANN KNOPP Defendant

Hearing: 5 November 2011
Decision 15 December 2011

Appearances: V Sugrue for the Informant P N Allan for the Defendants

Judgment: 15 December 2011

ORAL JUDGEMENT OF JUDGE JE BORTHICK

[1] Mr Andrew Pattullo and Ms Barbara Knopp, you have each been charged with an
offence that on or about 9 May 2010 you contravened or permitted the contravention of an enforcement order. In particular the investigation of contaminated land was not performed in the manner described in paragraph 1(d) of the enforcement order. These charges are continuing offences.
[1] Paragraph 1(d) of the enforcement order concerns the engagement of an
independent consultant to collect groundwater samples from a domestic drinking supply well located at your property in Conservators Road, Yaldhurst, and to submit them for testing at a laboratory.
[1] The breach of the order is admitted, but you say in your defence that you were
unable to comply with the orders due to your limited financial circumstances. Your defence is one founded on an absence of fault.

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Background

[4] On or about 28 October 2009, Mr Pattullo, you were convicted of four offences
laid under the Resource Management Act 1991. Two of these charges are relevant to the proceedings today and concern the discharge of contaminant onto land, namely demolition waste in circumstances that may result in contaminant entering water. On both charges, Mr Pattullo, you were sentenced to 50 hours community work.
[4] The Canterbury Regional Council subsequently applied for an enforcement order
against both defendants which was granted on 9 March 2010. The decision of the Environment Court records that the defendants did not file a Notice of Opposition. In the decision leave was reserved so that the defendants could seek an extension to the timeframe for performing the orders. Ms Knopp did seek leave to extend time for performing the orders, however no alternative date was given for performance.
[4] On 6 May 2010 the Environment Court issued a decision declining the
defendants’ application. At para 6 of the decision the Court records:

I have considered the application by Ms Knopp. I am not satisfied that the orders should be changed by extending the date by which to comply with the same. I share the concerns of the Regional Council that insufficient progress has been made to remediate the site; bearing in mind that, amongst other contaminants, asbestos has been dumped on the property. The dumping was discovered over one year ago.1

Strict Liability Offence

[4] Section 338 of the Resource Management Act 1991 is silent as to what category
of offence a breach of enforcement order falls under. The informant and defence counsel proceeded on the basis that this is an offence of strict liability. I find that this is the correct position having regard to the language and subject matter of the Act. This is a public welfare type offence. The purpose of the Act is promoted, amongst other measures, by the making of enforcement orders. Both counsel refer to the decision of Auckland City Council v Selwyn Mews Limited2 which is also a case concerning the breach of an enforcement order where Judge McElrea found this to be the correct position.

1 NZ EnvC 149.
2 DC Auckland CRN2004067301, 4 July 2003.

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[8] The defence carries the evidential onus to establish on the balance of
probabilities an absence of fault. They must prove that they acted honestly and with all due diligence – Millar v Ministry of Transport3. Referring to Adams on Criminal Law, Mr Allan submitted that this “test” should be applied in a practical way having regard to the actual circumstances and choices available to the defendants.
[8] As the defendants admit the elements of the offence the informant called no
evidence. The defendant, Barbara Knopp, did give evidence and she explained that she did not take legal advice in relation to the enforcement orders, being unable to afford the same.
[9] While the informant suggested places the defendants could go for water testing, the cost of the test commenced at around $5500. Ms Knopp did not pursue this because she could not afford the cost. Ms Knopp explained that she lives with her partner, Mr Pattullo, and four of their children at the Conservators Road property. Ms Knopp is presently employed as a night worker. Mr Pattullo is self-employed as a shareholder of the company Yaldhurst Trailer Equipment Limited, of which Ms Knopp is the majority shareholder and director.
[9] The property at Yaldhurst Road is subject to two mortgages. In relation to one of these a Property Law Act Notice was issued in April 2010. Mortgage repayments have not been made since June 2010. I note that a copy of the Property Law Act Notice was not produced in evidence. Mr Knopp’s evidence was that the mortgagee, Canterbury Mortgage Trust, has not foreclosed on the mortgage. The mortgagee brought in a real estate company to view the property and the real estate company declined to sell the property. Ms Knopp says that they have tried unsuccessfully to restructure the debts with the bank and through other sources. Subsequently Canterbury Mortgage Trust has gone into receivership.
[9] In respect to the court’s questions Ms Knopp did not think that the Property Law Act Notice would preclude the defendant selling the land but that they would need to ask

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the bank for its permission. Counsel have subsequently confirmed that this is the correct position.

[13] The financial statements for the year ending 31 March 2010 were produced (exhibits A and B). These are statements for the trading partnership Pattullo & Knopp and, secondly, Yaldhurst Trailer Equipment Limited.
[13] The property at Conservators Road, Yaldhurst, is recorded as an asset of the partnership. In the last two years Mr Pattullo has introduced substantial funds into the partnership and Ms Knopp has done likewise by introducing funds into the working capital of the company. I do not know the source of the funds and whether they have been exhausted. Ms Knopp prepared a statement of financial position dated 1 December 2010 on behalf of herself and Mr Pattullo (exhibit C). These personal assets are not recorded in the statement of financial position. There are discrepancies between this document and the professionally prepared financial statements as to the purchase price of the property, its government value and its present value. I understood Ms Knopp’s evidence to be that there would be substantial equity in the property if the mortgages were repaid. (Mr Allan submitted otherwise).

Submissions

[13] Mr Allan submits that the defendants did not have money to meet the costs of the enforcement order and that the question for the court to decide is whether that is sufficient to amount to a defence in the circumstances of the case. In his written closing submissions Mr Allan introduces new evidence - not that it can be called that - because, he submits, Ms Knopp was not as clear as she could have been when giving her evidence. I set aside what defence counsel has had to say at paragraph 5 of his submission, particularly in relation to the first, fourth and fifth bullet points which concern matters on which I did not receive evidence.
[13] Defence counsel submits that the effect of the Property Law Act Notice is that the property cannot be sold without first discharging the mortgages on the property or having the consent of the mortgagee to sell the property. This was also Ms Knopp’s understanding. Defence counsel submits neither of these options was going to be

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realistically met by the defendants and doing so would not free up any equity which could be used to pay towards the defendants’ obligations under the enforcement order.

[17] However, I am not satisfied that there is evidence capable of supporting this submission. I have no information as to the current market value of the property. At a minimum I would have expected a valuation by a registered valuer to be given in evidence. Secondly, I cannot ascertain from the exhibits whether the defendants’ liabilities do, in fact, exceed their assets as defence counsel asserts. But even if the financial circumstances were as dire as defence counsel contends, I would have expected evidence to prove, on the balance of probabilities, that reasonable steps were taken to give effect to these orders.
[17] The defendants could have approached the mortgagee to see whether they could sell the land, but I do not understand that they took that step. While the defendants did approach an independent consultant regarding groundwater tests I am not told whether they discussed payment options with the consultant. The decision granting the enforcement orders reserves leave so that the defendants could have sought an extension to the timeframe for performing the orders if that was what was required and this could have supported any arrangement the defendants had negotiated in respect of the taking of water samples.

Outcome

[17] So, in conclusion, I find that the defence of total absence of fault has not been made out. I am not satisfied that reasonable steps were taken in the circumstances. Rather, as Ms Knopp has said, the situation was too much for her and she did not know where to begin to give effect to the orders. I acknowledge this and it is difficult not to feel sympathy for Ms Knopp.
[17] In the sentencing notes4 in respect to Mr Pattullo at paragraphs 25 and 26 I recorded the following:

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Mr Mongillo, the informants’ Enforcement Manager reports that the land is no longer suitable for residential use.

I go on to say that:

Mr Mongillo also reports that residents living on or near the pits are most likely to become exposed to contaminants through ingestion and inhalation. He is particularly concerned about the presence of asbestos. A secondary concern is the leaching of contaminants into groundwater where there is a risk of ingestion through the consumption of contaminated drinking water. However, the most likely receptor in the exposure pathway is the defendant and his family who obtain their drinking water supply from a well located on the property. I note that there has been no testing to ascertain the effects on groundwater quality.

[21] As I understand it, the defendants and their children are continuing to live on the property and it is in their interests that this potentially serious situation be remedied.
[21] So the outcome is that I am not satisfied that the defence has been made out and that the charges are proven. However, I am not going to enter a conviction at this stage because I accept the informant’s submission that sentencing should be adjourned to enable the defendants to have time to comply with the enforcement orders and, if they do, this will be taken into account on sentencing. All sentencing options are available to the defendants, including a discharge without conviction. However the ball is in their hands.

Ministry for the Environment Grant

[21] Following the oral decision the informant advised that it had applied successfully for a grant from the Ministry for the Environment for funding for the testing and remediation of the property. Initially I had understood that the defendants had applied for this grant after the defended hearing. The money is not contingent on any funding from Mr Pattullo and Ms Knopp personally; however there may be a statutory land charge placed on the property. I explained to counsel that this made no difference to the outcome of this hearing, and that I was not satisfied that the defendants had made out the defence.

[24] The defendants are remanded to 18 May 2012 for sentencing.

J E Borthwick

District Court Judge

JEB/Prosecutions Miscellaneous/Pattullo and Knopp judgment 15.12.2011.doc.