Hawke's Bay Regional Council v Emmerson Transport Limited [2021] NZDC 18751 (21 September 2021)

Last Updated: 1 October 2021

IN THE DISTRICT COURT AT HASTINGS I TE KŌTI-Ā-ROHE KI HERETAUNGA

CRI-2020-020-00991 [2021] NZDC 18751

HAWKE’S BAY REGIONAL COUNCIL Prosecutor

v

EMMERSON TRANSPORT LIMITED Defendant

Hearing:	10 August 2021
Appearances:	Ms NB Graham for the Prosecutor Ms LJ Blomfield for the Defendant
Judgment:	21 September 2021

SENTENCE DECISION OF JUDGE MJL DICKEY

Introduction

[1] The defendant Emmerson Transport Limited (ETL) has pleaded guilty to one charge of discharging a contaminant (odour) to air from an industrial or trade premise pursuant to ss 15(1)(c), 338(1)(a) and 339 of the Resource Management Act 1991 (the Act) and one charge of contravening abatement notice AN1819.017 by discharging a contaminant, namely an objectionable odour, beyond the boundary of its property contrary to ss 338(1)(c) and 339 of the Act.1

1 Prosecutor’s submissions, at [1].

HAWKE’S BAY REGIONAL COUNCIL v EMMERSON TRANSPORT LIMITED [2021] NZDC 18751 [21

September 2021]

[2] The maximum penalty for each offence is a fine not exceeding $600,000. Ms Graham proposed a starting point of $30,000 for the discharge with an uplift to recognise the breach of the abatement notice. Ms Blomfield submitted that the appropriate range for a starting point is a fine of $15,000 - $25,000.

Background

[3] ETL is a duly incorporated company that operates a road transport company from a yard at 513 Orchard Road, Hastings. It has operated its business from the yard since 1993, and specialises in line-haul, bulk freight, refrigerated and meat industry cartage, rural service delivery, local cartage and managed warehousing. The yard is in the commercial area of Omahu in Hastings and borders the residential suburb of Camberley.

[4] A summary of facts was agreed between the parties and filed with the Court at the time a guilty plea was entered.

The offending2

[5] Between 10.42am and 11.03am on 29 January 2021 Hawke’s Bay Regional Council (HBRC) received complaints from three separate sources regarding odour from ETL’s yard. At 11.17am two environmental officers from the Council responded to the complaints and confirmed an objectionable and offensive odour coming from the yard that was also detectable beyond its boundary.

[6] The discharge of odour was not allowed by any national environmental standard, other regulations, a rule in a regional plan or a resource consent. It was also in breach of abatement notice AN1819.017 which was served on ETL on 5 February 2019. The abatement notice directed ETL to cease the discharge of objectionable or offensive odour beyond its boundary.3

2 Agreed Summary of Facts, at [1] and [7].

3 Prosecutor’s submissions, at [4].

The Council investigation4

[7] The environmental officers entered the yard and spoke with the manager. They observed nine bins of offal, one of which was overflowing due to the contents expanding in the heat. Three of the bins were partially covered with plastic wrap but the remaining bins had no covers. The offal was producing a strong odour.

[8] The manager initially (and incorrectly) advised that there had been a truck breakdown early that morning which had caused the incoming truck containing the offal to miss the transition to an outgoing truck. He advised that the offal had been at the yard for between five and six hours and would be picked up in an hour. The officers asked what could be done to remedy the situation immediately and the manager advised that the bins could be loaded into a curtain sided truck which was done.

[9] ETL subsequently confirmed that the bins had been on site since the previous afternoon. The truck delivering them had been delayed due to a road closure north of Hawke’s Bay and had missed the planned transfer to an outgoing truck that afternoon. There was the opportunity for the bins to leave the yard that night, but this did not happen because the supervisor and management team were not on site to instruct staff to load the bins onto the available truck when it arrived.5 They were recovering drivers stranded on the Napier-Taupo Road at the time. As a result, the bins were still at the yard on the day the complaints were received.

[10] ETL’s operations have previously been the subject of odour complaints. Between 2010 and 2018 there were four complaints that the business was spoken to about and in December 2018 ETL received a formal warning from the Council for discharging odour. Within the next six months there were five complaints that resulted in infringement fines and on 5 February 2019 an abatement notice (AN1819.017) was also issued to ETL directing it to cease the discharge of offensive or objectionable odour beyond the boundary of its property. This abatement notice was breached twice in 2019 resulting in infringement fines. The last infringement notices issued were for odour complaints made on 9 July 2019.6

4 Agreed Summary of Facts, at [2]-[6].

5 Defendant’s submissions, at [9].

6 Defendant’s submissions, at [5].

Sentencing principles

[11] The purposes and principles of the Sentencing Act 2002 are relevant. The High Court in Thurston v Manawatu-Wanganui Regional Council,7 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

[12] There were no physical effects as a result of the offending. However, three victim impact statements were filed; a general statement by Wheel Plus and two statements specific to the odour experienced on 29 January 2021 from Hastings Honda and The Warehouse.

[13] The victim impact statements demonstrate that people at the businesses in the vicinity experienced, and were affronted by what was variously described as, a fetid sickening odour that smelled like rotten meat or fish. It made staff at Wheel Plus, Hastings Honda and The Warehouse feel nauseous, headachy and unable to eat their lunch. The businesses and their staff were also embarrassed at having to explain the smell to customers.

[14] I conclude that the effects of the offending were moderately serious as there was a noticeable and foul odour that impacted occupiers of nearby businesses and their customers.

Culpability

[15] Ms Graham submitted that ETL’s business involves the transport of items that are sometimes odorous. As a profit is made through these transport operations, she

7 Thurston v Manawatu Wanganui RC High Court Palmerston North, 27/8/2010, CRI-2009-454-24, - 25, -27, Miller J.

submitted that it is incumbent on ETL to operate its business in way that does not impact adversely on others.8

[16] She submitted that despite the incident arising from a road closure, there was an opportunity for the offal to leave the yard that night on an outward bound truck but this did not occur, and instead the offal was left in the yard in the summer heat. The discharge was ultimately due to a lack of management or operational policy to deal with this type of situation.9

[17] It was also not an isolated incident evidenced by the fact that these charges follow earlier infringement notices and the abatement notice issued to address the odour problems. While this charge relates to a discrete date, she submitted that the compliance history is relevant in assessing culpability.10

[18] In addition, she submitted that there are similarities in the culpability of ETL in this matter and the defendant in Canterbury Regional Council v Wallace Group Limited Partnership11 (Wallace). In Wallace the defendant was found to be careless to a moderate degree because:12

It fell short of its corporate citizenship in carelessly not planning for and providing against the foreseeable contingency it faced, and that resulted in the odour breach.

[19] ETL accepts that its operations involve the transfer of offal and have the potential to generate odours which might be considered offensive and objectionable.13

[20] Ms Blomfield submitted that the incident occurred because of a road closure which held up traffic on the Napier-Taupo Road for several hours. ETL’s response to the situation involved senior management driving to recover drivers who were outside their legal driving hours as a result of the delays. Due to the absence of management, instructions which should have been given about loading the product out that night

8 Prosecutor’s submissions, at [9].

9 Prosecutor’s submissions, at [10].

10 Prosecutor’s submissions, at [11].

11 Canterbury Regional Council v Wallace Group Limited Partnership [2020] NZDC 24846.

12 Canterbury Regional Council v Wallace Group Limited Partnership [2020] NZDC 24846 at [20].

13 Defendant’s submissions, at [12].

were overlooked.14 Ms Blomfield submitted that there is no carelessness in this case and only a single discharge which occurred because of a truly unusual set of circumstances.

[21] I find that while the circumstances leading to the delayed transport of offal to the site were unusual and outside the company’s control, its lack of follow up was unacceptable. The problem arose when steps were not taken in the evening of the traffic incident to ensure the offal was placed on an outgoing truck or otherwise stored properly. Instead it was left to sit inadequately covered or otherwise contained until late the next morning. I would have expected the company to have had back-up processes in place to address an absence of senior management and the supervisor on site and the handling of potentially odorous materials. In all the circumstances I find the company to have been careless.

Starting point

[22] Ms Graham referred me to two cases, Wallace and Hawke’s Bay Regional Council v Hawke’s Bay Protein15 (Hawke’s Bay Protein). In Wallace a starting point of $30,000 was adopted for a single occasion of an unintentional discharge of objectionable and offensive odour from a rendering plant. In Hawke’s Bay Protein a starting point of $55,000 was adopted for five discharges of odour from a rendering plant.

[23] Ms Graham submitted that there are similarities in the culpability of ETL to that of the defendant in Wallace, which also involved a discrete incident of odour but against a backdrop of earlier complaints.

[24] The present case also involves the breach of an abatement notice that was issued to prevent this type of offending. Ms Graham submitted that the most appropriate approach in this case is to adopt a starting point for the discharge of odour itself and then apply an uplift to recognise the breach of abatement notice. She submitted that a starting point for the discharge itself should be $30,000.

14 Defendant’s submissions, at [13].

15 Hawke 's Bay Regional Council v Hawke 's Bay Protein [2021] NZDC 4097.

[25] Ms Blomfield submitted that this case can be distinguished from Hawke’s Bay Protein and Wallace. She submitted that in Hawke’s Bay Protein the Judge noted that the defendant had been upgrading its premises and placed the defendant’s culpability for the offending at the lower end of the scale.

[26] In Wallace she noted that there had been a single discharge which had not given rise to any long-term environmental harm. In that case the Court found that the offending was not deliberate, but that the defendant had shown a lack of care in not providing a plan for malfunction or failure and a need to temporarily store unprocessed product. The Judge considered that the defendant ‘displayed moderate carelessness as a body corporate’. Based on those findings, the starting point was set at $30,000.

[27] Ms Blomfield submitted that there is no carelessness in this case and only a single discharge which occurred because of a truly unusual set of circumstances. She submitted that a starting point of $30,000 is too high and that an appropriate range for a starting point is between $15,000 to $25,000; resulting in a fine of $11,250 to

$17,500.

[28] Having considered the parties submissions I find that Wallace is the closest in circumstances to his case, however there are differences because the Court in Wallace found that the events leading to the discharge were foreseeable, that is a plant breakdown. The events leading to the discharge in this case were unusual and not foreseeable. The similarities are found in the lack of a plan for dealing with an event that could result in product remaining on site and releasing offensive odours.

[29] I set the starting point at $25,000 because there was undoubtedly 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. Further there was no back up plan to deal with odorous materials staying on site. That said, the starting point recognises that the events leading to the delayed arrival of offal to the site were unusual and outside ETL’s control.

Aggravating and mitigating factors

[30] Ms Graham submitted that there should be an uplift of between $5,000 to

$7,000 applied to recognise the breach of the abatement notice, and that no discount should be made for a previous good record.

[31] Ms Blomfield submitted that because this case involved a one-off incident which occurred in very unusual circumstances, it is not appropriate to apply an uplift to recognise the breach of the abatement notice. She submitted that the events preceding 2018 dated back to 2010 and that ETL had made considerable efforts since then and in 2019 to address problems at the site; that it had also enjoyed a good track record for the preceding 18 months where no odour complaints had been made.

[32] I do not think that it is appropriate for there to be an uplift because the circumstances leading to the incident were unusual and unable to be anticipated. While there was a failure to immediately address the delayed offal delivery that has been considered in determining culpability.

[33] I also note that ETL has made changes to its operations and practice following the incident. Ms Graham acknowledged these changes but noted that they could have been undertaken earlier. The main change is that offal is no longer transitioned through the Hastings yard. The company has ceased ‘at risk’ cartage activities - an alternative site in Whakatu is used for bin transfers of product that might cause an odour issue and involve a direct truck to truck transfer; the company has reviewed other wet activities at its site which include truck wash down; and an additional management resource has been employed with responsibility for the company’s nightshift activities.16

[34] Further changes were summarised and described in ETL’s submissions, and are recorded below:17

• 18.1 A Meat Industry Operations Manager was employed, operating under the direct control of the (then) Divisional General Manager. ...
  

16 Defendant’s submissions, at [10].

17 Defendant’s submissions, at [18].

18.2 The management and hygiene of the transit facility is monitored personally. This begins with early morning inspections to ensure that the Company’s transit staff had moved all product and that the cleaning processes have occurred in line with the Company’s operational procedures. There then followed three other daily inspections in addition to those by the company’s night staff.

18.3 The Company keeps daily documentation and records of the operational staff checks.

18.4 The Company consulted with its two key customers supplying (offal) material for transport to ensure that bins are filled to a level which ensures that any expansion of the binned material does not pass the sealed lids (because when that occurs, the product may become exposed and begin to smell).

18.5 The customers supplying this offal product have been instructed to provide additional sealing of the bins before they are transported.

18.6 Pending collection, the bins are to be stored on the customer’s site in temperature-controlled atmosphere to assist with product quality.

18.7 Adjustments have been made to the timing of deliveries to ensure shorter site-dwell periods when the product is delivered to the yard. All inbound product is delivered by 10:30am daily and uplifted by 1:00pm daily.

18.8 A reserve plan has been put in place to dispose of this material if the scheduled connections are not made.

[35] I have assumed that the above reference to offal product applies to premises other than the Hastings site.

[36] Counsel agree that there was an early indication of a guilty plea and that a 25 percent discount should be given to recognise that. I agree.

Outcome

[37] I convict ETL and order it to pay a fine of $18,750.

[38] An order is made pursuant to s 342(2) of the RMA for 90 percent of the fine to be paid to HBRC.

Judge MJL Dickey

District Court Judge | Kaiwhakawā o te Kōti ā-Rohe

Date of authentication | Rā motuhēhēnga: 21/09/2021