Waikato Regional Council v Hamilton City Council [2022] NZDC 17901 (3 October 2022)

Last Updated: 14 October 2022

IN THE DISTRICT COURT AT HAMILTON I TE KŌTI-Ā-ROHE KI KIRIKIRIROA

CRI-2021-019-004318 via AVL [2022] NZDC 17901

WAIKATO REGIONAL COUNCIL Prosecutor

v

HAMILTON CITY COUNCIL Defendant

Hearing:	7 June 2022 C Macklin for Waikato Regional Council M Crocket for Hamilton City Council 3 October 2022
Appearances:
Judgment:

SENTENCING DECISION OF JUDGE MJL DICKEY

Introduction

[1] The defendant, Hamilton City Council (HCC), has pleaded guilty to one charge under s 15(1)(a) of the Resource Management Act of unlawfully discharging wastewater into water.

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

[3] A summary of facts was agreed for the purpose of this proceeding.

[4] Mr Macklin, on behalf of Waikato Regional Council (WRC), submitted

the starting point should be a fine in the region of $100,000 to $110,000. Ms Crocket, for HCC, submitted a starting point of $80,000 is appropriate.

WAIKATO REGIONAL COUNCIL v HAMILTON CITY COUNCIL [2022] NZDC 17901 [3 October 2022]

Background1

[5] HCC is a territorial authority pursuant to the Local Government Act 2002. The Local Government Act 2002 legislates the responsibilities of territorial authorities. Pursuant to section 130 of this Act, the HCC is obliged to continue to provide water services (which includes wastewater services), and maintain its capacity to meet its obligations in relation to them.

[6] City Waters is the departmental arm of the HCC whose responsibilities include the provision of drinking water, stormwater, and wastewater services for the city. City Delivery is the departmental arm of the HCC responsible for both the planned and reactive maintenance programmes in support of the City Waters networks.

[7] Stormwater comprises natural water resulting from rain events and the associated surface water runoff from hard surfaces such a roofs and roads, which is directed into a stormwater network designed to prevent flooding by diverting water away from populated areas.

[8] Wastewater comprises used water from domestic and commercial premises. Wastewater includes a range of potential contaminants of varying concentrations and sewage is a subset of wastewater that is contaminated with urine or faeces.

[9] A manager is appointed to oversee the functions of City Waters, with the hierarchal oversight being provided by the General Manager, Infrastructure Operations.

The wastewater network2

[10] Hamilton City wastewater that is subject to the wastewater reticulation network is ultimately pumped to the HCC Wastewater Treatment Plant (WWTP) in Pukete, Hamilton, for treatment, before being discharged into the Waikato River.

1 Summary of facts at [1] – [6].

2 Summary of facts at [7] – [17].

[11] Approximately 50,000 cubic metres of wastewater is pumped through the network to the WWTP each day. The wastewater network ultimately relies on gravity to convey wastewater to the WWTP and to achieve this relies on a series of 140 sewage pump stations (SPS) within the network that lift the level of wastewater to keep it flowing through the system.

[12] In residential suburbs, the wastewater system includes a network of ‘mains’ pipes running predominately underground in the road corridor, with connections to each residential dwelling or commercial premises. The mains pipe network includes strategically located manhole risers and wastewater chambers; the manhole risers give access to the mains network.

[13] SPS are located at various points of the wastewater system. Each SPS consists of a well chamber and pumps. Wastewater flows into the well and as the wastewater level in the well rises to a pre-determined high level, the pumps switch on and pump the wastewater out and on down the system.

[14] When the level in the well chamber falls to a pre-determined low level, the pumps switch off. This cycle operates as a continuum depending on the volume of wastewater coming into the system and the diurnal variation in flow rate depends on the time of day.

[15] HCC monitors and records the SPS pump trend data on a daily basis as part of an electronic recording system called SCADA. The system monitors the change in well levels going up and down, and pump run times. As the system monitors levels as opposed to flow rates, it is not suitable for alarming and relies on HCC staff to monitor the trend data to identify any system malfunctions or changes in the pump data.

[16] The SPS trend data is monitored daily Monday to Friday, looking back at three days of trend data for each SPS to identify any unusual or significant changes in the trends that may indicate an issue. Over weekends, on duty staff only monitor the data from sites that historically have had more frequent issues i.e., problem sites only, or where there have been issues during the previous week.

[17] In common with many other wastewater systems, there are a number of engineered overflow points designed to direct wastewater overflows into the stormwater system in the event the system becomes blocked, so that wastewater does not overflow onto the road or back up and overflow from building gully traps or toilets.

[18] Currently, HCC wastewater chambers having these overflow ports are not alarmed to notify HCC that wastewater is overflowing and discharging via these engineered overflows into the stormwater system and subsequently into the environment.

[19] The HCC stormwater network also includes mains pipes running predominately underground in road corridors, manhole risers and chambers that give access to the network. Stormwater collected from hard surfaces such as roofs and roads flows into the system before being directed to designated stormwater outlets.

[20] In Hamilton City, the stormwater network includes a number of natural streams, wetlands and modified watercourses, and all stormwater is eventually discharged through these into the Waikato River.

Circumstances of the offending3

[21] The offending involves the discharge of untreated wastewater into a tributary of the Te Awa O Katapaki Stream over a 9-day period between the 4th and 12th of October 2020.

[22] Delia Court is a residential cul-de-sac in the Flagstaff suburb of Hamilton City. The stormwater network servicing Delia Court and surrounding streets includes a mains stormwater pipe in the Delia Court road corridor that discharges into a tributary of the Te Awa O Katapaki Stream that flows past the end of Delia Court.

[23] This tributary has been modified by the addition of armoured gabion baskets and ponds, to regulate the velocity of stormwater going into the stream to prevent

3 Summary of facts at [18] – [44].

stream channel erosion and allow some water retention and settling time in the ponds to remove pollutants from the water.

[24] The tributary flows into the Te Awa O Katapaki Stream at Petersburg Drive, approximately 170m away, and the main stream discharges into the Waikato River approximately 1.75km from Delia Court.

[25] There is a wastewater mains pipe in the Delia Court road corridor that services surrounding residential properties. This mains pipe is connected to the Cumberland Drive SPS and has a wastewater manhole chamber and riser situated in Delia Court.

[26] This wastewater chamber is engineered with an overflow line connected to the Delia Court stormwater mains system, and by design, in the event of a blockage within the wastewater main downstream of the Delia Court section of the system, wastewater will back up and overflow to the stormwater manhole and discharge into the tributary of the Te Awa O Katapaki Stream via the stormwater outlet at the end of Delia Court.

6 October 2020

[27] At or about 2.45 p.m. on Tuesday the 6th of October 2020, a consultant environmental engineer was undertaking an audit and inspection of all of the HCC existing stormwater wetlands on behalf of HCC and was in the company of an HCC structural engineer employed in the Strategic Development unit.

[28] The environmental engineer had walked the full length of the tributary stream described above and in a part of the stream below the Delia Court stormwater outlet he located a large area of ponded water that had the appearance and smell of being wastewater. He took photographs of the build-up of significant algae growth on gabion baskets in the waterway and advised the HCC structural engineer of the odour and appearance of ‘sewage’ in the water course.

7 October 2020

[29] Both those engineers then passed on this information the next day, 7 October 2020, to another HCC employee, being an Infrastructure Engineer, with the request

that the information be forwarded on to the Compliance Team to investigate the source of the odour and wastewater discharge.

9 October 2020

[30] On Friday morning 9 October 2020, the Infrastructure Engineer, via email, requested copies of the photographs taken on 6 October 2020. The photographs were duly received that same day with the added text: It is very evident it has been ongoing for some time. Lots of scum on gabions and strong smell. This was now three days after an HCC Engineer had first become aware that there may be a wastewater discharge issue, and two days after the HCC Infrastructure Engineer had become aware of the same potential issue.

[31] At 1:38 p.m. that afternoon another HCC employee, being a Regulatory Compliance Officer, was emailed by the Infrastructure Engineer advising that the stormwater device at Delia Court appeared to be contaminated with grey water or wastewater and requesting he arrange for someone from City Waters to investigate. The Infrastructure Engineer did not follow up to see if the email had been received or acted upon.

[32] In a related incident, on Friday 9 October 2020 an arborist working at a residential property on the corner of Trent Lane and Petersburg Drive, Flagstaff, reported to the WRC that he could smell a sewage odour in the tributary stream below Delia Court, and that when he investigated the source of the odour, found that the stream was a ‘milky’ colour and looked to contain sewage.

[33] WRC notified HCC of this odour complaint that day and HCC sent a staff member from the City Deliveries team to investigate that same day. Inspection of the Petersburg Drive SPS found everything in order. They checked the Te Awa O Katapaki Stream from a bridge over Petersburg Drive and did not note any issue or smell any wastewater odour. They did not look into or inspect the tributary stream below Delia Court that flowed into the Te Awa O Katapaki Stream approximately 100m away on Petersburg Drive.

12 October 2020

[34] The 9 October 2020 email was not opened until Monday morning, 12 October 2020. As a result of the email information, the HCC Compliance Officer went to Delia Court at 10:36 a.m. and inspected both the wastewater and stormwater mains in the road corridor. He found wastewater was actively overflowing from the wastewater system into the stormwater system and discharging into the tributary stream described herein.

[35] Arrangements were then made for contractors to come to the site to carry out an inspection. They sucked the wastewater level in the system down to a level where the overflow stopped and using a jetting unit, located and cleared a partial blockage of the wastewater mains that was located in the mains between two wastewater manhole risers downstream on nearby Cumberland Drive. This action resulted in the wastewater overflow ceasing at 11.35 a.m.

[36] The blockage was caused by a build-up of fats, rags and other coagulants in the mains pipe that was partially blocking the pipe, and therefore restricting the flow of wastewater downstream of the blockage which included the Delia Court wastewater system.

[37] The HCC Regulatory Compliance Team Leader notified WRC of the wastewater discharge at 11:10 a.m. on 12 October 2020, and WRC staff went to the location where they met with HCC. HCC pointed out the overflow line from the wastewater chamber into the stormwater system and explained that they (HCC) would not know if an overflow was occurring and that it could have been overflowing for several days.

[38] WRC staff noted that the wastewater level was high, but about 300mm below the overflow port inside the chamber. They inspected the nearby stormwater manhole chamber and confirmed there was no overflow coming in from the wastewater pipe however there was a distinct wastewater odour present.

[39] WRC staff then went to the stormwater outlet at the end of Delia Court, where the stormwater pipe discharged into the tributary stream. They found flowing water

in the stream and a pond at the outlet from the stormwater pipe. They noted the ponded water was grey looking and smelled strongly of sewage. They took a series of photographs and a water sample.

[40] They also noted the build-up of slimy grey algal growth and paper residue on the wire of the gabion baskets in the water course.

[41] Samples of algal growth were later taken from halfway down the tributary stream and from the main Te Awa O Katapaki Stream, below the confluence with the contaminated tributary, alongside Petersburg Drive. A subsequent analysis of the biological algal samples revealed the presence of very high numbers of sewage fungus and algae.4

[42] WRC staff followed the contaminated tributary stream down to where it joined the main Te Awa O Katapaki Stream along Petersburg Drive. Water quality samples were taken both upstream and downstream of where the tributary flowed into the main stream. Subsequent analysis of these samples indicated high levels of contaminants consistent with wastewater containing sewage in the downstream sample while the sample taken upstream of the mixing point indicated no contamination.

[43]

The water quality samples were sent to Hill Laboratories for analysis and the results of this analysis are shown below:

4 Summary of facts Appendix 1, page 3, Water Quality Assessment – Dr Eloise Ryan.

[44] Historical pump trend data recorded from the Cumberland SPS SCADA system indicated that a change in flow occurred on Sunday 4 October 2020, when the wastewater pump flow dropped below the 60-day dry weather average flow level, to about half of the normal flow volume.

[45] The pump station flow volume stayed at this low level for a nine-day period, with normal flows resuming after the blockage was located and cleared on the 12th of October 2020.

[46] Using this pump trend data, the actual overflow volume of wastewater into the stormwater system has been calculated by HCC as being 1,272 m3 or 1,272,000 litres over the 9-day period.

[47] SPS pump trend data is monitored daily by the duty member of the HCC Operations Reticulation Team, who are looking at sets of three days of data, for changes in trend data that are otherwise not explainable that may indicate a blockage or system malfunction. In this case, the partial blockage meant that the pumps were still operating, albeit less frequently and therefore the changes in trend data were more subtle and less obvious than if there had been a full blockage of the mains pipe.

Regulatory framework5

[48] Waikato Regional Plan Rule 3.4.5.4 – Discretionary Activity Rule – Discharges – General Rule states:

any discharge of a contaminant into water, or onto or into land, in circumstances which may result in that contaminant (or any other contaminant emanating as a result of natural processes from that contaminant) entering water, that is not specifically provided for by any rule, or does not meet the conditions of a permitted activity rule in this plan, is a discretionary activity, (requiring resource consent).

[49] There is no resource consent held by HCC to discharge untreated wastewater into water. There is no national environmental standard that allows for a discharge of untreated wastewater into water.

5 Summary of facts at [47] – [49].

[50] The discharge of untreated wastewater into the Te Awa O Katapaki Stream as described, is a breach of Rule 3.5.4.5 of the Waikato Regional Plan and s 15(1)(a) of the Resource Management Act 1991.

Explanation6

[51] In explanation, HCC acknowledged the discharge event and stated that while the discharge of a contaminant into the environment was not its intention, the wastewater system must have an engineered overflow point somewhere and that it was preferable for that overflow to be engineered to minimise the risk that it would come into direct contact with the public.

[52] HCC considered the response from its staff on 12 October 2020 to be appropriate in the circumstances.

Sentencing principles

[53] The purposes and principles of the Sentencing Act 2002 are relevant. The High Court in Thurston v Manawatu Wanganui Regional Council7 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

[54] The summary of facts states:8

• [50] ... the Te Awa O Katapaki Stream discharges into the Waikato River. The Waikato River is classified as a Contact Recreation water class, a Significant Indigenous Fisheries and Fish Habitat class and a Significant Trout Fisheries and Trout Habitat class, in the Waikato Regional Plan.
  
• [51] An assessment of water quality and environmental effect was completed by Dr Eloise Ryan, a Senior Water Quality Scientist at the Waikato Regional Council. ...
  

6 Summary of facts at [58] – [59].

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

8 Summary of facts at [50] – [57].

[52] Dr Ryan confirmed that the algae samples examined contained very high numbers of sewage fungus that only exist in very nutrient enriched environments, and are indicative of a system containing wastewater such as sewage or effluent. It was her expert opinion that these were well established communities of sewage fungus indicative of a long-term continuous history of wastewater contamination.

[53] Her summary of the environmental effects of this wastewater discharge included the following points:

• E. coli concentrations in sample D, from the tributary stream, were extremely high at 15,000,000 cfu/100ml, which is 27,273 times greater than the recreational guideline of <550 cfu/100ml.
  
• People or animals coming into contact with this water would be at an unacceptably high risk of infection.
  
• Ammoniacal nitrogen concentrations in some samples were extremely high. Ammonia is the most toxic form of nitrogen; these concentrations are extremely toxic to aquatic life and are up to 95% over guideline values (<.88g/m3).
  
• There can be adverse ecological effects when concentrations of biochemical oxygen demand (BOD) is >4g/m3. The results of samples A, B and D show extremely low to zero dissolved oxygen available in the water to support aquatic life in these waterways.
  
• The total nitrogen and total phosphorus concentrations were well above the Waikato Regional Council Guidelines and Standards for Ecological Health.
  

[54] An Assessment of Ecological Effects has been completed by WRC Water Quality Scientist, Dr Bruno David, specific to the Te Awa O Katapaki Stream, based on the sample results.9

[55] Dr David confirmed that the Te Awa O Katapaki Stream is recognised as possessing a diverse native fish community and that over the last decade, various projects have occurred on this stream to improve conditions for native fish. In particular, fish passage has been improved at three major localities throughout the catchment and the stream is considered to have high and diverse ecological value considering its urban context and increasing pressures from impervious runoff including stormwater.

[56] Native fish species known to occur in the watercourse include smelt, inanga, giant kokopu, short and longfin eels, banded kokopu, redfin and common bullies and koura (freshwater crayfish). Unfortunately, there are also invasive species present throughout the catchment including koi carp, brown bullhead catfish, gambusia and rudd, and in the lower reaches near the Waikato River, the introduced sport fish, brown trout.

[57] Dr David stated that in the current case we have concentrations of ammonia (feeding the lower online detention pond) which are orders of magnitude above guideline levels. Ammonia is highly toxic to fish and values

9 Summary of facts Appendix 3, Ecological Assessment – Dr Bruno David.

at the discharge location of the pond where sample 166357-B were taken (and following mixing within the pond from the stormwater entry point) were around 4x the Waikato Regional Plan standard of 0.88 g/m3 (3.2.4.5 b. viii.) and 8x the more recent 2020 National Policy Statement for Freshwater Management (NPS-FM) guideline levels of 0.4 g/m3, and that such ‘in river’ concentrations are very concerning and quite likely lethal to most native fish (depending on length of time of exposure).

[55] Mr Macklin advised that over the last decade, a significant amount of work has been undertaken to improve the conditions for native fish in the Te Awa O Katapaki Stream, in particular passage has been improved to allow easier movement upstream.

[56] Mr Macklin noted that it has previously been held by this Court that the significance and importance of the Waikato River to the region and its people, including Waikato -Tainui, is beyond question.10 HCC and the Waikato Raupatu River Trust are parties to a 2012 Joint Management Agreement, which agrees shared responsibility to restore and protect the health and wellbeing of the Waikato River for future generations.

[57] The serious environmental effects of any discharge of contaminants into the waterways are well known to the Court. The tributary into which the wastewater was discharged is easily accessible and situated in a well-utilised park/reserve space in a built-up residential area. The tributary and the Te Awa O Katapaki Stream ultimately discharge into the Waikato River approximately 1.75km from the tributary.

[58] Mr Macklin observed the discharge increased the level of E. coli by 40% (still below relevant guidelines) in the near-field receiving zone of the Waikato River, which is significant when considering the large dilution available in the Waikato River. The cultural significance of the Waikato River to the region and its people cannot be overstated.

[59] Ms Crocket did not address environmental effects in her submissions.

Conclusion on effects

[60] With reference to the reports provided from the water quality scientists, I find that the effects of the discharge were of some significance in the sense that, in the

10 Waikato Regional Council v Hamilton City Council [2019] NZDC 16254 at [30].

tributary stream, E. coli concentrations were 27,273 times greater than the recreational guidelines – putting people who came into contact with that water at an unacceptably higher risk of infection. Further, in some samples ammoniacal concentrations were extremely high, which are extremely toxic to aquatic life including most native fish depending on length of exposure. Certain samples showed extremely low to zero dissolved oxygen in the water to support aquatic life, and total nitrogen and phosphorous concentrations were well above accepted standards.

[61] I conclude that the discharge of untreated wastewater would have had high adverse effects on the tributary and local environment, with low to moderate effects on the Waikato River. There are also cultural effects of such discharges on Waikato- Tainui. The Waikato River is of significant cultural importance.

Culpability

[62] Mr Macklin submitted that the offending involved a high level of carelessness and was foreseeable. The wastewater system is engineered to discharge into the stormwater network if there is an overflow of wastewater.

[63] Mr Macklin highlighted that the Court has previously expressed concerns regarding the design of wastewater management systems implemented by various local authorities in Southland Regional Council v Invercargill City Council (Invercargill City Council),11 and Otago Regional Council v Queenstown Lakes District Council.12 In those cases, the Court treated the discharges as deliberate in the sense that the systems operated in the way they were designed to do. Accordingly, the discharge was treated as predictable.

[64] In Invercargill City Council, Judge Dwyer said:13

Constructed overflows are features of sewage systems intended to provide a release mechanism in cases of overloading. However, as the Court observed in the other cases referred to, local authorities have no more right to discharge contaminants into our waterways than anyone else and if it is necessary for them to do so, they need to obtain a discharge permit. If such discharges are

11 Southland Regional Council v Invercargill City Council [2019] NZDC 17852.

12 Otago Regional Council v Queenstown Lakes District Council [2017] NZDC 28767.

13 [2019] NZDC 17852 at [10].

prohibited (as I understand they are in this case) local authorities must find some other means of dealing with overflows or face prosecution.

[65] Mr Macklin submitted that there were several inadequacies and failures on the part of HCC staff and its systems which also led to the discharge occurring:

• (a) HCC staff members failed to investigate the reduced flow in the SPS trend data from 4 October 2020. While the data is monitored daily between Monday to Friday, the trend data was not monitored on Sunday, 4 October 2020 when the discharge commenced.
  
• (b) it also appears that no response was triggered on Monday, 5 October 2020;
  
• (c) HCC became actively aware of the issue from 6 October 2020 onwards. However the concerns were simply passed between various HCC staff members and not actioned or remedied until 12 October 2020, resulting in wastewater being discharged in the tributary for 9 days.
  

[66] Mr Macklin submitted that the time that was taken between HCC staff first becoming aware of the issue and taking steps to investigate and respond was simply unacceptable. The time delay allowed a serious environmental issue to become much more serious, and cause serious potential adverse effects to neighbouring properties, and to the wider environment. While not deliberate, such a delay made serious environmental effects predictable.

[67] Mr Macklin acknowledged that HCC did not directly profit from the offending.

[68] WRC accepts that on detecting the issue on 12 October 2020, HCC then took steps to remedy the issue and clear the blockage. However, this came nine days from when the pump data shows there was a change in flow, and seven days from when HCC staff first became aware of the issue.

[69] Ms Crocket acknowledged that the amount discharged (estimated 1,272m3 over nine days) is not insubstantial, but submitted it should be seen in the context of the volume of wastewater which HCC must deal with. The discharge represents 0.28 percent of the nine-day total. Further, the discharge is much smaller than that in Wellington Regional Council v Porirua City Council (Porirua City Council), in which the discharge was estimated to be between 7,000m3 to 8,000m3.14

[70] HCC carries out routine monitoring of pump trend data on a daily basis. The discharge was caused by a partial blockage rather than a complete blockage. Ms Crocket submitted this made it more difficult to detect during routine daily monitoring because the pumps were still operating so the change in the trend data was more subtle and less salient.15 Had the mains pipe been completely blocked, this would have been much more obvious to the operator who was monitoring the pumpstation operation.

[71] HCC acknowledges that the delay between the first staff member becoming aware of a likely wastewater discharge in the area on the afternoon of 6 October 2020, and the information being received by the response personnel on the morning of 12 October 2020 is not acceptable. It accepts that there was insufficient awareness within the organisation of the proper way to notify the response personnel of a suspected problem.

[72] Ms Crocket submitted that this is not a situation in which staff were unaware of the seriousness of the situation, or were wilfully blind to it. The staff members involved realised that it was necessary to notify the response personnel and took steps to pass the information along. The issue is that they did not raise these issues using the appropriate channels, causing delay. That said, these staff members’ actions did lead to the discharge being investigated, the blockage being removed and the discharge ceasing.

14 Wellington Regional Council v Porirua City Council DC Wellington CRI-2014-091-769, 12 June 2014.

15 Summary of facts at [44].

Conclusion on culpability

[73] It needs to be reiterated that any discharges of contaminants from sewage systems require a discharge consent. As the Court pointed out in Invercargill City Council, local authorities have no more right to discharge contaminants into our waterways than anyone else.

[74] I acknowledge that on occasion, issues arise and discharges result. The Court must consider the effects of those discharges, and the systems in place to prevent or address them if they occur.

[75] There was clearly a communication breakdown in this case because, while advice of the discharge was first given to HCC on 6 October 2020, it was not until 12 October 2020 that action was taken. Further, the monitoring system is such that a partial blockage at a pumping station is not as noticeable to those monitoring data as a full blockage.

[76] I have been advised that the Council has now implemented measures to address the issues. They are summarised at the end of this decision but include educating staff on the use of proper notification, identification of unmonitored engineered overflow points with a number having now been removed, trial of manhole level sensors, improvements to SCADA data trends, changes to notification of alarms and educational flyers to residents as to appropriate disposal of waste into the wastewater system.

[77] In the circumstances, I find that HCC was highly careless. The insufficient awareness within the Council of the proper way to notify suspected problems is not acceptable when having responsibility for a wastewater system that has the potential to discharge contaminants. The measures since implemented to improve management of the system and outlined above, indicate that there is a need for ongoing vigilance of operations and systematic review of systems.

Starting point

[78] Mr Macklin referred me to the following cases: Taranaki Regional Council

v New Plymouth District Council (New Plymouth District Council);16 Otago Regional Council v Queenstown Lakes District Council (Queenstown Lakes District Council);17 Waikato Regional Council v Hamilton City Council (Hamilton City Council);18 Wellington Regional Council v Porirua City Council (Porirua City Council).19 Mr Macklin accepted that none of the decisions are on all fours with the present offending.

[79] Mr Macklin submitted that the offending is serious given the combination of the following factors:

• (a) the offending had serious environmental impacts on the water quality of the tributary, the Te Awa O Katapaki Stream, and the near-field receiving zone of the Waikato River:
  

16 Taranaki Regional Council v New Plymouth District Council [2021] NZDC 3372 – one charge of discharging industrial wastewater and untreated sewage from a pump station into the Mangati Stream. The discharge involved 1500 cubic metres of contaminant being discharged over nine hours, creating odour and discolouration which extended out to sea for almost one kilometre. The discharge was lethal to fish species, with many dead fish observed in the stream including three at risk species. Primary responsibility for the discharge lay with City Care Ltd and its inadequate response to the alarms that went off. The District Council had acknowledged its vicarious liability. The Court found a high degree of culpability attaching to CCL due to its failures. Starting point for CCL was $150,000, for Council was $95,000.

17 Otago Regional Council v Queenstown Lakes District Council [2017] NZDC 28767 – one charge of discharging contaminants to land, entered water (43 cubic metres of untreated sewage and related waste). Effects included – smell, visible plume, residue and other products remained on the riverbank for up to three months after the discharge was stopped. Treated as a deliberate discharge in the sense that the system did what it was designed to do. Starting point $50,000.

18 Waikato Regional Council v Hamilton City Council [2019] NZDC 16254 – one charge of permitting the discharge of wastewater, containing untreated human sewage, into water. Two mechanisms failed. An estimated 1,782 litres of wastewater discharged into the Waikato River. The discharge would have had a relatively insignificant physical adverse effect. However, the cultural effects to iwi were described by Waikato-Tainui and acknowledged by City Waters. The Court characterised the adverse environmental effects as moderate, given the high volume of discharge, its untreated nature, its location and the cultural effects. Council found to be careless because the supposedly failsafe system failed as the result of human error. Starting point $80,000.

19 Wellington Regional Council v Porirua City Council DC Wellington CRI-2014-091-769, 12 June 2014 – one charge for discharging or permitting the discharge of partially treated wastewater to land in circumstances where it entered water. The discharge created a large brown plume in the Bay, estimated to be 100m2, accompanied by a strong smell, and the Bay was closed for recreational and fishing activities for a time. However, these effects were temporary and short lived. Although there was no suggestion the PCC discharged the wastewater deliberately, the Court concluded that there had been systemic failure on the part of PCC and a significant degree of carelessness. Starting point

$70,000.

(i) analysis of the water samples indicated high levels of contaminants with a high risk of infection for people and animals coming into contact with the water, and

(ii) the level of ammonia present in the wastewater discharge was highly toxic to the aquatic life and native species of fish.

(b) the wastewater was ultimately discharged into the Waikato River, which is of significant cultural importance;

(c) the offending is directly attributable to the wastewater system design itself and the poor management of the infrastructure;

(d) particularly aggravating in this case is that HCC staff members were actively aware of the wastewater discharge as early as 6 October 2020 but failed to remedy it for a further six days. Additionally, the charge in the SPS pump trend data was not monitored or investigated. In this respect, the offending has some similarities to Waikato Regional Council v Contact Energy, where Judge Kirkpatrick considered that the failure of Contact Energy staff to respond to its warning and alarm systems for five days was “a key factor” in him setting a starting point of $250,000.20 Judge Kirkpatrick considered the failure to respond to alarms within the system meant the overall gravity of the offending and the defendant’s culpability was “very high”;21

(e) the quantity of the wastewater discharged (1,272 cubic metres or 1,272,000 litres) and the duration of the offending (nine days) are seriously aggravating.

[80] Mr Macklin submitted the quantity of the discharge is most similar to the case of New Plymouth District Council. However, the duration of the offending (nine days) makes this case more serious, as does the failure of HCC staff to promptly

20 Waikato Regional Council v Contact Energy [2020] NZDC 24794 at [73].

21 At [75].

remedy the issue, when they became aware of it. Mr Macklin submitted that the slow response of HCC represents a serious management failure, analogous to the five-day delay to respond to a known issue in Contact Energy.

[81] Mr Macklin submitted that given the combination of aggravating factors, and the serious environmental impacts on a river of high cultural significance, the starting point should be in the region of $100,000 to $110,000. This represents a starting point between 16 – 18.3 percent of the maximum penalty.

[82] Ms Crocket submitted, in terms of volume, that it is instructive to compare this case with Porirua City Council, where the volume discharged was significantly larger than in this case.

[83] While HCC does not deny that failures occurred, Ms Crocket submitted a number of the low volume cases have important aggravating features which are not present in this case. For example:

• (a) while the situation was foreseeable in the sense that the overflow to the stormwater system was not monitored, HCC had put in place detection measures including monitoring of SPS trends, which would have picked up a complete blockage. This is not a situation in which a foreseeable event was not provided for at all, as was the case in Manawatu-Wanganui Regional Council v Whanganui District Council, where the pump system alarm failed due to a power cut22 and New Plymouth District Council where there were failures due to a power cut and a lack of storage to compensate;
  
• (b) nor was there an on-going failure to carry out inspections and maintenance, leading to a blockage, as occurred in Queenstown Lakes District Council, Otago Regional Council v Clutha District Council
  

22 Manawatu-Wanganui Regional Council v Whanganui District Council [2018] NZDC 26705 – one charge, overflow from pump station into a stream. E.coli well above ministry guidelines for freshwater recreation; a real risk to public health. The Stream flows to a popular recreational beach. Starting point $30,000.

(2018) (Clutha District Council (2018)),23 Otago Regional Council v Clutha District Council (2020) (Clutha District Council (2020))24 and Porirua City Council;

(c) the discharge was not into a water body subject to a Water Conservation Order, as in Clutha District Council (2018);

(d) the discharge was not proximate to a swimming area, as it was in Clutha District Council (2018) or a seafood-gathering area, as it was in one of the discharges in Clutha District Council (2020);

(e) the discharge did not extend over a one-kilometre area and kill 1,000 to 1,500 fish, as occurred in New Plymouth District Council;

(f) the discharge did not take place over an 8-month period and include a failure to comply with an abatement notice, as occurred in Manawatu-

Wanganui Regional Council v Rangitikei District Council.25

[84] Ms Crocket submitted that while the volumes discharged in the above cases were relatively low (apart from in New Plymouth District Council, and particularly in Porirua City Council), the starting points in the cases reflect these aggravating features of the offending which are not present in this case.

23 Otago Regional Council v Clutha District Council [2018] NZDC 16724 – one charge of discharging wastewater, containing human sewage and other materials, into the Clutha River. Discharge lasted five hours. The principal adverse effects were to amenity. Adverse effects were quickly attenuated. A relevant aspect of the offending was that it was a designed discharge, by which sewage was to be directed to stormwater pipes when a blockage occurred. The council had no routine inspection or maintenance programme in place. Starting point $35,000.

24 Otago Regional Council v Clutha District Council [2020] NZDC 26125 – six charges arising from the operation of five wastewater treatment plants. Systemic failure on the council's part to properly operate and/or monitor the operation of the five wastewater plants. These failures led inevitably to discharges. The court stated the council was reckless in the extreme and culpability on the Council's part was at the very high end of the scale. The breach of numerous conditions of the council's resource consents was a particularly aggravating factor. Starting points for each discharge ranged from $100,000 to $120,000.

25 Manawatu-Wanganui Regional Council v Rangitikei District Council [2020] NZDC 12891 – one charge of discharging human effluent into water. The environment affected was the river and its amenity, water supply, fishing and sedimentary values. The river was a popular recreational site. Cumulative adverse effects to the river waters, potential adverse effects to human health and caused specific cultural offence to Maori. Starting point $80,000.

[85] Ms Crocket highlighted that when the Compliance Officer received the notification email on Monday 12 October 2020, he went to the site, inspected the wastewater and stormwater mains and identified the overflow. He arranged for a contractor to bring a vacuum truck which located the partial blockage so that it could be removed with a jetting unit. The staff members’ quick action resulted in the overflow ceasing an hour after he arrived on site.

[86] Ms Crocket further submitted that the partial blockage which occurred in this case was not caused by HCC; it had taken reasonable steps to prevent blockages. The blockage was caused by residents putting fats, rags and other coagulants into the wastewater system. HCC’s wastewater network serves a city of over 160,000 residents. HCC has an education programme to inform residents of how to safely use the wastewater system and avoid blockages.

[87] Ms Crocket submitted that the starting point should be $80,000. This is higher than the starting point in Porirua City Council, in which approximately four times more wastewater was discharged.

Conclusion on starting point

[88] In setting the starting point, I was assisted by the New Plymouth District Council and the previous Hamilton City Council cases. I have also considered the Contact case.

[89] While the blockage that led to the discharge was not of the Council’s making, its response to it was entirely in its hands. The response was not timely and highlighted a deficiency in the Council’s notification system. The levels of E. coli, ammonia, nitrogen and phosphorous at the sample points were significantly high. The tributary is easily accessible and located in a park/reserve in a built-up residential area. The Council is responsible for the safe collection, transport and disposal of wastewater. Any unauthorised discharges have the potential to create significant adverse effects. Its systems and its communication systems need to be robust. In the circumstances, I find that a starting point of $90,000 is appropriate.

Aggravating and mitigating factors

Previous history

[90] The defendant has previously appeared before the Court in 201126 and 201827 in relation to the discharge of contaminants into the environment.

[91] WRC submitted there should be an uplift in the vicinity of $20,000 to reflect that HCC has been convicted of discharging wastewater into the Waikato River on two previous occasions. The offending in 2018 occurred in extremely similar circumstances. Mr Macklin submitted that it is clear from this offending that the process implemented in 2019 in response to the last SPS failure was inadequate.

[92] Mr Macklin acknowledged that HCC runs a very large network which includes a number of variables outside of its immediate control, but submitted the previous offending should have put HCC on notice as to the need for robust management of its systems, and the need to ensure that any issues are responded to in a timely manner. The offending has, again, resulted from a failure by HCC in managing its infrastructure. HCC were put squarely on notice due to its recent, similar offending. Despite this, when alerted to a problem within the wastewater network, it took over a week to alert the relevant person to respond to the issue. WRC accepts that as soon as the correct person within HCC was notified, the issue was remedied in a timely fashion.

[93] Ms Crocket acknowledged HCC’s previous convictions. She noted HCC is a large organisation carrying out numerous activities which could give rise to breach of the RMA if not well managed. For the overwhelming majority of the time its systems work well, and wastewater is collected and treated in a safe and environmentally responsible way. Ms Crocket submitted that the Court should take little regard of the first conviction as it relates to offending which occurred almost eleven years ago and in a different context (the wastewater treatment plant). Ms Crocket accepted the

26 Waikato Regional Council v Hamilton City Council DC Hamilton CRN-120-195-240, 7 August 2012

– one charged of unlawfully discharging 145m3 of treated wastewater sludge from a day tank at a treatment plant into the Waikato River. Discovered after a period of seven hours and occurred due to a blockage. The Court noted serious process failures, gaps in education and training of staff, stormwater issues and human error. Starting point $50,000.

27 Waikato Regional Council v Hamilton City Council [2019] NZDC 16254.

second conviction merits a moderate uplift at most. It relates to offending which occurred in a different context (a sewage pumping station).

[94] I consider an uplift is warranted due to the most recent conviction and conclude a 20 per cent uplift is appropriate.

Early guilty plea

[95] WRC accepted that HCC pleaded guilty at the earliest opportunity and a discount of up to 25 percent is available. I agree.

Remediation of the environment

[96] Ms Crocket submitted that once HCC had identified and stopped the discharge, staff began work on remediating the stream and associated areas. Public access to the area was temporarily blocked off by putting up “danger” tape, and by locking gates and fencing. Staff undertook sampling to measure the impact on water quality.

[97] Solid matter was removed by hand. Ordinarily contaminated liquid and solid material would be removed by vacuum truck. However, in this case eels were seen in the stormwater detention device. HCC took the view that it was not appropriate to use a vacuum truck and instead removed the solid material by hand. HCC consulted with Waikato-Tainui who agreed with this approach.

[98] It started to rain that afternoon which allowed natural flushing of the stormwater device and increased flow over the riprap outfalls between devices which increased the level of aeration of the water. The following morning the stormwater detention pond was re-inspected by HCC staff. No solid material was seen, there was no sewage odour and the pond water had returned to its normal colour.

[99] I do not consider that remediation in this case warrants a discount. The works were necessary in order to ensure that the adverse effects of the offending were mitigated as far as possible.

Steps to prevent future problems, restorative justice and remorse

Provision of a robust wastewater network

[100] Ms Crocket advised that HCC’s capital works programme for the 2021/2022 financial year is $38 million and for the 2022/2023 year is $60 million. Much of this capital works programme is to meet the additional demand created by the growth of the city. It also includes projects which increase the network’s resilience and reduce the risk of overflows.

[101] In order to detect, mitigate and avoid overflows, HCC already had in place:

• (a) a condition assessment programme and CCTV contract to enable routine monitoring of wastewater pipes in areas of the city which are susceptible to blockages and/or to inform wastewater network maintenance and renewal programmes;28
  
• (b) daily (Monday – Friday) checks of wastewater data by the duty engineer from the Operations Reticulation Team;
  
• (c) a programme of increasing storage at certain SPSs. One example of this is the Hillsborough SPS on Grantham St in 2020. Increased storage increased the resilience of the network as it:
  
  • (i) provides a greater window of time for a blockage to be detected and remedied before an overflow occurs;
    
  • (ii) provides emergency storage in the case of mechanical or electrical failure;
    
  • (iii) lessens the impact of wet weather on the wastewater network. During wet weather, stormwater enters the wastewater system and this increased volume places greater demand on the wastewater treatment plant. With increased storage the
    

28 Delia Court is not an area with a higher incidence of blockages.

increased volume can be dealt with over a longer period, reducing pressure on the WWTP.

[102] Ms Crocket again identified that HCC has an on-going education programme designed to raise public awareness of proper use of the wastewater system and the consequences of putting unsuitable materials in the system.

[103] Ms Crocket also noted that HCC has been involved in a project to develop a ‘flushability’ Standard to help prevent blockages. Standard AS/NZS 5328 Flushable Products has now been published. It will be an offence against the Fair Trading Act 1986 to advertise a product as flushable if it does not conform with the Standard.

Restorative justice

[104] A restorative justice conference took place on 5 May 2022. It was attended by representatives of Waikato-Tainui, Te Haa o te Whenua o Kirikiriroa (THaWK), which has a mandate to represent the five hapuu which claim mana whenua within Hamilton City boundaries, Ngati Wairere, and Waikato Regional Council.

[105] The Restorative Justice Conference Report dated 25 May 2022 records the following agreed outcomes:

1. Eva-Liisa Wright and Marie Porter apologised to iwi mana whenua and Waikato Regional Council (WRC) on behalf of HCC.
   
2. The apology from Hamilton City Council (HCC) was accepted by iwi and mana whenua members and the Waikato Regional Council.
   
3. Four of the eight agreed actions from the previous Discharge of contaminants into the environment charge (5 August 2019) are ongoing and HCC is committed to continue working through those agreements.
   
4. All parties agreed to have a follow-up meeting to develop the following actions:
   

1. Improvement of the HCC (adverse event) notification framework and mauri restoration model.
   
   2. Commitment to joint wānanga for information sharing.
      
   100. Social procurement opportunities / riparian planting.

4. Planning for iwi and mana whenua to be involved in development of a cultural monitoring tool.
   

[106] Ms Crocket submitted the restorative justice process has achieved several of the purposes of sentencing in s 7, including:

• (a) holding HCC accountable for the harm done to the victims and the community by way of a suite of remediation and prevention actions: s 7(1)(a);
  
• (b) promoting, through HCC’s apology and engagement with the restorative justice process, HCC’s sense of responsibility for and acknowledgement of that harm: s 7(1)(b);
  
• (c) providing for the interests of the victims, including mana whenua and river users, by providing an opportunity for victims to be heard by HCC: s7(1)(c);
  
• (d) deterring HCC from further offending: s7(1)(f).
  

[107] Ms Crocket submitted that HCC’s willingness to undertake restorative justice hui, and its sincere engagement in the restorative justice process has been of great value. As a result of the restorative justice process, the relationship between iwi/mana whenua and Council has been strengthened. Opportunities for greater understanding by Council of mana whenua perspectives, and opportunities for greater involvement of iwi and mana whenua in the Council’s processes have been canvassed and will continue to be explored. It was submitted that Council’s engagement in restorative justice merits a reduction in HCC’s sentence.

Remorse

[108] Ms Crocket submitted HCC’s remorse is evident from:

• (a) the extensive work HCC has done to review and improve its wastewater network, both in relation to this incident and more broadly;

• (b) HCC’s engagement in the restorative justice process.
  

[109] Ms Crocket advised that following the discharge HCC undertook an internal investigation into the cause of the discharge. In many respects the wastewater network is working well, however there were some matters which required attention. HCC identified a number of corrective actions which it could take in order to prevent future discharges. The key elements include:

• (a) a focus within HCC on educating staff to use the proper notification channels in order to avoid delay in responding to overflow incidents. This has included:
  
  • (i) the preparation for a roadshow in June 2022 across the organisation. This will include City Waters representatives speaking to each business unit to walk through the process, and informational stickers for staff to add to their building access card for easy reference;
    
  • (ii) a direct discussion with the staff members who used alternative notification methods in relation to this overflow.
    
• (b) the identification of 24 unmonitored engineered overflow points (i.e. points where an overflow of wastewater will discharge to the stormwater network). Of these, twelve have now been confirmed as having been removed, including the overflow point in Delia Court. Following survey work, a further four overflow points have been identified as being able to be removed and this work will occur over the next few months. Two engineered overflow points have been identified as needing to remain and survey works are ongoing to determine how many of the remaining six engineered overflow points can be removed without impacting current network operations. The remaining overflow points are now physically inspected on a weekly basis (no overflows have been found to date). This is an interim arrangement – in future

either remote monitoring will be installed or the overflows will be plugged;

(c) the trial of manhole level sensors in Ranfurly Gully. Information from these sensors is monitored daily by the duty engineer in Operations Reticulation Team. Ranfurly Gully was chosen for this trial as there were previously a number of recurring pipe blockages in this area.

(d) improvements to reviews of SCADA data trends carried out by the Operations Reticulation Team duty engineer (SCADA is a computer system which collects and displays data from across the network):

• (i) a daily ten-day trend review in addition to the daily three-day trend review. The three-day trend review on its own was not sufficient to pick up the partial blockage related to the Delia Court overflow;
  
• (ii) a live spreadsheet which monitors the 37 SPSs which have flow meters, checked daily.29 If a 25 percent flow reduction is detected, the spreadsheet triggers a “check” on the sheet for the duty engineer. In the future this function will be transferred to a reporting tool called Power BI, which can initiate alarm notifications to initiate investigation or response;
  
• (iii) a “Pump Run Hour” function, checked weekly. Pump run times are used as a proxy for SPSs without flow meters. If pump run time starts to drop this will require investigation.
  

(e) alarms from the wastewater system sent to field staff and Operations Reticulation engineers are now sent both by text message and by the WIN911 app in order to provide redundancy;

29 All SPS have level sensors, but flow meters are not suitable for all SPSs as they are difficult to maintain (which can interfere with their accuracy) and because the volume at some SPS is too small for an accurate flow measurement. Because of the different properties of water and wastewater, and because wastewater flow stops and starts, it is difficult to accurately measure the flow of wastewater. Where flow meters are suitable, these are rolled out when an SPS is renewed or upgraded.

(f) educational flyers have been sent to nearby residents following the Delia Court incident. Flyers were also sent to residents in the Ranfurly Gully area following events there.

[110] Ms Crocket submitted that HCC has co-operated with WRC and is engaged in a programme of system improvements which goes beyond the minimum measures which would have prevented the discharge. These steps show real remorse and there should be appropriate credit for them.

[111] Ms Crocket noted that in Clutha District Council there was a 20 percent discount on the basis that its programme of improvements went beyond simply responding to acknowledged shortcomings. In Porirua City Council the Court gave a 25 percent discount which took into account co-operation, a plant upgrade and a donation.

[112] Ms Crocket further submitted that HCC made a sincere apology at the outset of the restorative justice hui, was genuinely engaged in the restorative justice process, and is committed to the agreed outcomes.

[113] HCC’s steps to analyse and change certain of its systems and attend restorative justice conferencing are positive and helpful. While the works agreed to in the conference are to an extent ongoing and a continuation of the actions agreed at the previous conference (on the earlier prosecution), they demonstrate good faith and a commitment to ongoing improvements. The changes to systems, particularly to those covering communication within the organisation about overflow incidents, were clearly necessary. However some recognition of these changes is appropriate. I allow a 10 percent discount for participation in restorative justice and for the actions taken to ensure improvements in systems.

Peter paying Paul

[114] Ms Crocket submitted there is the “Peter paying Paul” aspect when a fine imposed goes from one local authority to another and ratepayers bear the cost either way. She submitted that it would be appropriate that the fine, or a portion of it, be directed to a local environmental project or organisation for the benefit of the Waikato

River selected by WRC or for WRC to work with mana whenua to identify appropriate projects that the fine could be put towards.

[115] WRC did not accept that argument. It noted that the Regional Council performs a different role in investigation and enforcement. It sought an order that 90 percent of the total fine imposed is to be paid to the WRC, pursuant to s 342 of the RMA.

[116] No particular environmental project or organisation has been identified by HCC in support of its submission. HCC has demonstrated ongoing commitment to improvements. I see no particular need or value in making an order requiring the payment of further environmental compensation.

Outcome

[117] I have adopted the two-step methodology outlined by the Court in Moses v R.30

[118] The starting point is $90,000. I have imposed a 20 per cent uplift to recognise the most recent conviction. I have allowed a 25 per cent discount for an early guilty plea and 10 per cent for the Council’s participation in restorative justice and ensuring further improvements to its systems. I convict Hamilton City Council and impose a fine of $76,500.

[119] I direct that 90 percent of the fine be paid to the Regional Council in terms of s 342 of the RMA.

Judge MJL Dickey

District Court Judge | Kaiwhakawā o te Kōti ā-Rohe

Date of authentication | Rā motuhēhēnga: 03/10/2022

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