Waikato Regional Council v Cazjal Farm Limited [2023] NZDC 10973 (2 June 2023)

Last Updated: 14 July 2023

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

CRI-2022-0072-000031 [2023] NZDC 10973

WAIKATO REGIONAL COUNCIL Prosecutor

v

CAZJAL FARM LIMITED JOHN LEONARD WALLING G & V FARMS LIMITED GARY DEAN SMITH KELLY THOMASON Defendants

Hearing:	1 August and 26 October 2022
Appearances:	J O’Sullivan for the Prosecutor M Hammond and J Nekia for Cazjal Farm Limited and John Leonard Walling P Lang for G & V Farms Limited and Gary Dean Smith J Lang for Kelly Thomason
Judgment:	2 June 2023

SENTENCING NOTES OF JUDGE D A KIRKPATRICK

Introduction

[1] The prosecution of these defendants relates to charges under the Resource Management Act 1991 (RMA) alleging the unlawful discharge of dairy effluent on a farm at 506 Ngaroma Road near Wharepūhunga on 29 June, 21 September and 12 November 2021. Cazjal Farm Limited owns the farm and John Leonard Walling is a director of that company. At all relevant times G & V Farms Limited was the contract

WAIKATO REGIONAL COUNCIL v CAZJAL FARM LIMITED [2023] NZDC 10973 [2 June 2023]

milker on the farm and Gary Dean Smith is a director of that company. At all relevant times G & V Farms Limited employed the defendant Kelly Thomason as its manager.

[2] The farm where the offending occurred was a dry stock farm which was purchased by Cazjal Farm Ltd in 2013 and converted to dairying in 2014. It has been the site of two previous prosecutions for effluent discharges with sentencing occurring in 2017 and 2020. In 2017, Cazjal Farm Ltd was convicted and fined and the farm manager at the time was discharged without conviction.1 In 2020, another farm manager was sentenced for three offences involving the discharge of cowshed effluent.2

[3] G & V Farms Ltd and Mr Smith only became involved with this farm on 1 June 2021, although the contract between Cazjal Farm Ltd and G & V Farms Ltd was not executed until sometime in September 2021. As well, Mr Thomason started as the farm manager on 1 June 2021.

[4] Cazjal Farms Limited and Mr Walling each face two representative charges in respect of all three discharges for:

• (a) contravening s 15(1)(b) of the RMA by discharging to land effluent from stationary and travelling irrigators where it may enter water, namely tributaries of the Matapara Stream and the Mangaharakeke Stream and groundwater; and
  
• (b) contravening s 338(1)(c) of the RMA by discharging a contaminant, namely effluent, from stationary and travelling irrigators in breach of an abatement notice.
  

[5] G & V Farms Limited seeks a sentencing indication under ss 60 – 65 of the Criminal Procedure Act 2011 based on one representative charge for contravening s 15(1)(b) of the RMA for the discharges on 21 September and 12 November 2021. If the indication is accepted by the company, then the Council would:

1 Waikato Regional Council v Cazjal Farm Limited & Olson [2017] NZDC 12226.

2 Waikato Regional Council v Major [2020] NZDC 22416.

(a) apply to amend the current charges into one representative charge; and

(b) seek leave to withdraw the charges against Mr Smith.

[6] Mr Thomason faces one charge of contravening s 15(1)(b) of the RMA for discharging effluent to land where it may enter water on 21 September 2021. Mr Thomason seeks a discharge without conviction under ss 106 and 107 of the Sentencing Act 2002.

[7] The charges are offences under s 338(1)(a) and (c) of the RMA for which the maximum penalty under s 339(1) in the case of a natural person is imprisonment for a term not exceeding 2 years or a fine not exceeding $300,000 and in the case of a person other than a natural person is a fine not exceeding $600,000.

[8] Counsel for the Council submits an appropriate penalty for each offence is a fine. As well, the Council seeks an enforcement order under s 339(5) of the RMA against Cazjal Farm Limited and Mr Walling requiring them to make certain improvements to the effluent system on the property. The Council opposes Mr Thomason’s application for a discharge without conviction.

The offending

[9] On 30 June 2021, a resident in the area called the Council complaining that the Matapara Stream was a dark green colour and smelled of effluent. Council officers attended the farm shortly afterwards. They found an irrigator on the farm had been spraying on a limited arc on the right hand side of the tanker track on a slope above a tributary to the stream. There was a clear flow path of effluent from the irrigator across the paddock to a boggy area in the bottom of the gully and then into the tributary, which was still running green, was frothy in places and had an odour of effluent. Samples were taken in a number of locations and subsequent analysis confirmed the presence of high levels of contaminants.

[10] On 21 September 2021 the same complainant called and there was a further inspection by Council officers. Analysis of samples confirmed elevated levels of contaminants consistent with dairy effluent. Council officers inspected the effluent

pond which they found was full with very little freeboard left. A travelling irrigator was in Paddock 14 and had been set up to run in a heavily pugged and rutted area causing it to travel more slowly with the consequence that effluent was applied at higher rates and the further consequent risk of ponding due to the pugged soil. The farm’s hydrant system was broken and prevented irrigation in a more suitable area. Effluent had ponded in an area up to a depth of 100 mm with two flow paths. One path was in Paddock 13 and ran downhill into a gully, through a spring-fed wetland and a duck pond and then following the path from that pond into the Matapara Stream. The other path ran downhill into a shallow gully and into a drain alongside a tanker track and then across a paddock and into the main stem of the Matapara Stream. The drag hose connected to a hydrant was leaking resulting in a muddied area through a further flow path.

[11] On 3 November 2021 a stationary irrigator had been set up in Paddock 50 above the steep side of the gully. Council officers observed the remains of a heavy application of effluent in a partial arc pattern where the irrigator had not been spinning in a full circle. The flow path ran from the irrigator down into the gully, ponding against an earth dam up to at least 420 mm deep and flowing beneath the dam into a tributary stream. Analysis of samples confirmed high levels of contaminants down to the dam, with lesser concentrations from samples taken below the dam.

[12] The environmental effects were conspicuous, particularly in the Matapara Stream adjacent to the farm. The results of the analysis of water samples indicates very high levels of contamination attributable to dairy effluent and which are well-known to adversely affect stream fauna. While the stream may recover, that is at least delayed by repeat offending. The river is classified as a significant habitat for both indigenous fish and trout.

[13] Social and cultural effects follow from the environmental effects. Neighbours of the farm have complained of the effects of the farm’s discharges on the Matapara Stream and on them. That stream flows into the Pūniu River. There are four marae along the Pūniu River: Mangatoatoa, Rāwhitiroa, Aotearoa and Whakamārama. The Pūniu River then joins the Waipā River just south of the town of Pirongia, which then flows into the Waikato River. The Waipā River is the subject of the Nga Wai o

Maniapoto (Waipa River) Act 2012. The Waikato River, including all its catchment, is the subject of the Waikato-Tainui Raupatu Claims (Waikato River) Settlement Act 2010. Among the purposes of that legislation is to recognise the significance of the rivers to tāngata whenua and to recognise the vision and strategy for the Waikato River and its catchment, Te Ture Whaimana, which is part of the Waikato Regional Policy Statement and has as its vision a future where a healthy Waikato River sustains abundant life and prosperous communities who, in turn, are all responsible for restoring and protecting the health and wellbeing of the River, and all it embraces, for generations to come.

Sentencing purposes and principles

[14] In Thurston v Manawatu-Wanganui Regional Council3 Miller J provided a comprehensive summary of the principles applicable to environmental offending. Persons who plead or are found guilty of offences under the RMA are to be sentenced in accordance with the purposes and principles of both the Sentencing Act 2002 and the RMA.4 Particularly relevant considerations include:5

• (a) the offender’s culpability: deliberate or reckless conduct is an important aggravating feature of the offence, while inadvertence may earn leniency if appropriate efforts have been made to comply;
  
• (b) any infrastructural or other precautions taken to prevent discharges;
  
• (c) the vulnerability or ecological importance of the affected environment together with the extent of the environmental damage, including any lasting or irreversible harm, and whether it was of a continuing nature or occurred over an extended period of time. Where no specific lasting harm can be identified, an allowance for harm may be made on the assumption that any given offence contributes to the cumulative effect of pollution generally;
  

3. Thurston v Manawatu-Wanganui Regional Council HC Palmerston North CRI-2009-454-24, - 25 and 27, 27 August 2010 at [39] – [51].

4 Thurston fn 3 at [40].

5 Thurston fn 3 at [41] – references omitted.

(d) deterrence: penalties should ensure that it is unattractive to take the risk of offending on economic grounds;

(e) the offender’s capacity to pay a fine;

(f) disregard for abatement notices or Council requirements: abatement notices are designed to allow a Council to put a stop immediately to unlawful discharges and if they are to work as intended the Court must treat non-compliance as inherently serious; and

(g) co-operation with enforcement authorities and guilty pleas.

[15] More generally under the Sentencing Act, the principles of accountability, denunciation and deterrence, the gravity of the offending, the degree of culpability of each defendant, the general desirability of consistency in sentencing and the effect of the offending on the community are important considerations. Under the RMA, the most relevant considerations are the statutory purpose of sustainable management of natural and physical resources and the matters to which particular regard is to be had including kaitiakitanga and the ethic of stewardship, the intrinsic values of ecosystems, maintenance and enhancement of the quality of the environment, and any finite characteristics of natural and physical resources.

[16] Counsel for the prosecutor submits that it is also relevant to consider the seriousness of this type of offending as indicated by the maximum penalties that may be imposed under s 339 of the RMA. While that is generally true, some care needs to be taken as s 339 provides the same penalties for any offence under s 338 of the RMA, however minor or egregious the offending may be, including a maximum penalty for a natural person of two years imprisonment. There is no tariff case. As numerous cases demonstrate, the range and variation in the kinds of offending that occur under the RMA means that the maximum penalty, by itself, may not be as useful in determining an appropriate sentence as a careful assessment of the gravity of the particular offending, the culpability of the particular offender and, where the nature of the offending is similar to previous cases, some consideration of similar cases for the sake of consistency in sentencing.

[17] Some systemisation was attempted by this Court in Waikato Regional Council v GA and BG Chick Limited,6 where three levels or bands of culpability were identified by Judge Whiting in the following terms:

Level 1 - least serious ...

[24] This range of offending reflects unintentional one off incidents occurring as a result of a system failure. The range of penalty reflects the spectrum from the rarely used but wide discretion to discharge without conviction, to offending which encompasses some failure to adequately maintain the system, or failure to take timely restorative action. It also reflects little or no effect on the environment.

Level 2 - moderately serious ...

[25] This range of offending reflects unintentional but careless discharges usually of a recurring nature over a period of time, or of incidents arising from the malfunction of different parts of the system. The offending is often manifested by a reluctance to address the need for a safe system of effluent disposal, resulting in delays in taking restorative action. It also reflects little or at the most a moderate effect on the environment.

Level 3 - more than moderately serious ...

[26] This range of offending reflects the more serious offending. Offending that is deliberate, or if not deliberate, is occasioned by a real want of care. It is often associated with large plural discharges over time or one large one off event. It often exposes a disregard for the effects on the environment.

[18] As well, the Court identified a range of starting points that might appropriate in each band. As may be readily appreciated, however, the levels of fines identified in 2007 have become quite outdated as a result of inflation and because the maximum penalties were substantially increased when s 339(1) of the RMA was replaced by section 139(1) of the Resource Management (Simplifying and Streamlining) Amendment Act 2009. So, while the decision in Chick should not be referred to for guidance as to the starting point for any fine imposed under s 339, the analysis of the range of offending still provides some real utility in differentiating levels of culpability based on degrees of intentionality and fault. Even so, while this may facilitate consistency, it may also inhibit the Court’s response to developing trends in offending and evolving community norms.7

6 Waikato Regional Council v GA & BG Chick Limited (2007) 14 ELRNZ 291.

7 Thurston fn 3 at [50].

[19] As noted in Sowman v Marlborough District Council,8 trends in offending and evolving community norms should be reflected in sentences particularly to reflect the seriousness of offending and the need for deterrents in repeated cases of offending. I also refer to the decision of the Court of the Appeal in Trent v Canterbury Regional Council9 and the observation that there is growing public concern about the quality of New Zealand waterways and the discharge of contaminants into them which is a relevant matter for a sentencing judge to take into account.

[20] I was presented with a number of relatively recent sentencing decisions in relation to the unlawful discharge of dairy effluent:

• (a) In Roberts v Northland Regional Council, Andrews J noted starting points in 2014 of $30,000 to $60,000 had been adopted for individual offenders after conviction on either one or two charges.10
  
• (b) In Taranaki Regional Council v Farm Ventures Ltd, Judge Dwyer observed that starting points for level 2 offending in 2019 fell into the range of $40,000 to $80,000.11
  
• (c) In Waikato Regional Council v Brunt,12 Judge Dwyer noted that the range in 2021 was between $50,00 to $100,000.
  
• (d) In Huka View Dairies v Manawatu-Whanganui Regional Council, Palmer J dismissed an appeal from a sentence of $115,00 for a discharge and breach of an abatement notice.13
  

[21] Further, the prosecutor submitted that care needs to be exercised in the application of the Chick levels or bands, particularly on the issue of whether discharges were “deliberate” or “reckless”. She submitted that often the offending causing real environmental harm is not deliberate in the sense of intentional wrongdoing but is

8 Sowman v Marlborough District Council [2020] NZHC 1014, [2020] NZRMA 452.

9 Trent v Canterbury Regional Council [2021] NZCA 123, [2021] 22 ELRNZ 617 at [46].

10 Roberts v Northland Regional Council [2014] NZHC 284 at [88].

11 Taranaki Regional Council v Farm Ventures Ltd [2019] NZDC 10803 at [33].

12 Waikato Regional Council v Brunt [2021] NZDC 1714.

13 Huka View Dairies v Manawatu-Whanganui Regional Council [2021] NZHC 1462.

foreseeable and avoidable, occurring due to some systemic failure or as a result of poor management or otherwise is so lacking in precaution that a discharge is a matter of “when” rather than “if”.

[22] This submission must be considered in the context of s 341(1) of the RMA which provides that in any prosecution for an offence of contravening ss 9 and 11 – 15 of the RMA it is not necessary to prove that the defendant intended to commit the offence. While intention need not be proved as an element of such an offence, it is well settled that even for an offence of strict liability the offending act or omission must still be within the defendant’s conduct, knowledge or control.14 Even where the defendant pleads guilty, the proper approach to sentencing requires an assessment of the degree of their culpability in the context of the gravity of their offending, that is, the extent to which they are at fault and deserving of blame.15 The use of the levels or bands in Chick is a method of ascribing blame in a consistent way. While divided into three, it is clear that the levels or bands are not wholly discrete. While the overall range may be continuous, I think it would be an error to merge the levels or bands because that would derogate from the scheme and limit its utility by reducing its flexibility. Similarly, the descriptions of the levels or bands in Chick demonstrate the range of both intention and blameworthiness that may be attributed to offending acts or omissions and it would be an error to reduce those simply to single words such as “deliberate”, “reckless”, “careless” or “accidental” which may fail to describe the offending adequately.

[23] A further consideration in the present prosecution is the relative culpability among several defendants and the effect, if any, of their contractual relationships on their culpability. This is not based on the different maximum penalties in s 339 of the RMA between corporate entities and natural persons.16 Rather, it concerns how the fine or fines should be divided or portioned between related defendants, especially where they may be so closely related that a fine that is imposed on one will effectively come out of the pocket of the other. This is not automatic, and consideration must also

14 Kilbride v Lake [1962] NZLR 590 (NZSC).

15 Sentencing Act 2002, s 8(a); R v Taueki [2005] NZCA 174; [2005] 3 NZLR 372 (CA) at [28] – [30] and [42] – [43];

Moses v R [2020] NZCA 296 at [5] – [7].

16 Trent v Canterbury Regional Council fn 9 at [33] – [35].

be given to the differing roles played by different defendants even where they are related.17

[24] Ultimately, these cases require proper consideration of the role and circumstances of each offender. A fine that is appropriate for an individual is not to be reduced simply because another offender was also involved. On that basis, I must proceed to consider each defendant individually. As my assessment will show, however, the relationships among the various defendants are important to my ultimate findings on gravity and culpability.

Cazjal Farm Ltd and John Leonard Walling

Prosecutor’s submissions

[25] The submissions of counsel for the prosecutor recounted the offending in this case by Cazjal Farm Ltd and its director, Mr Walling, which occurred on three occasions within a six-month period. There is a history of non-compliance, including an abatement notice in June 2016, seven offences in 2016,18 a formal warning in 2019, three offences by the farm manager in 201919 and a further formal warning in 2020. The risks presented by the difficult topography, the presence of streams and the limits of the effluent disposal system are or should be known to these defendants. While protocols were ostensibly put in place, they do not appear to have been implemented with new staff and nor were the staff informed of the abatement notice.

[26] The prosecutor characterises the offending as serious given its frequency and the high levels of contaminants found in the streams. Management choices, including the late engagement of a contract milker already engaged on two other farms and not resident on the farm, resulted in poor supervision. Counsel submits that the conduct of these defendants demonstrates disregard for the law and reckless conduct towards the environment.

17 Taranaki Regional Council v Farm Ventures Limited [2019] NZDC 10803; Manawatu-Wanganui Regional Council v PPG Wrightson Limited [2019] NZDC 7331; Waikato Regional Council v Pollock Farms (2011) Limited [2019] NZDC 2204 and Calford Holdings Limited v Waikato Regional Council HC Hamilton CRI-2008-419-94, 26 May 2009[2009] NZHC 616; , (2009) 15 ELRNZ 212, [2009] NZRMA 563.

18 Waikato Regional Council v Cazjal Farm Limited & Olson fn1.

19 Waikato Regional Council v Major fn 2.

[27] In this context the prosecutor submits that the offending by Cazjal Farm and Mr Walling is at level 3 in the Chick scheme, being the result of a real want of care on three occasions over a six-month period and being in breach of an abatement notice. Counsel submits that, for the company, a starting point of $180,000 should be adopted for the representative charge in relation to the discharge offence and a starting point of $60,000 should be adopted for the representative charge of breaching the abatement notice.

[28] For Mr Walling, counsel submits that a global starting point for both charges of $150,000 should be adopted. Counsel acknowledges that there is some overlap in the roles of these two defendants but submits that given the history of non-compliance, the significance of these offences and the provision in s 340(3) of the RMA for a director to be liable for an offence committed by a company, the sentencing purposes of accountability and deterrence should be addressed by imposing penalties on each of them.

[29] The prosecutor submits that there should be an uplift from the proposed starting points to recognise the aggravating features of the offending, principally being the prior enforcement history of Cazjal Farm and Mr Walling’s position as a director of the company. Counsel also refers to a prosecution of another company of which Mr Walling is a director for earthworks and breaches of an abatement notice.20 Counsel said that a significant uplift would be appropriate in each case.

[30] The prosecutor also seeks that an enforcement order be made against both of these defendants under s 339(5) of the RMA. A draft order was presented requiring these defendants to:

• (a) Obtain a full assessment of the current dairy effluent system at the farm from an accredited assessor for a dairy effluent warrant of fitness to identify compliance risks, including and particular to the irrigation of dairy effluent onto land, and establish what management and safeguards are required to ensure compliance with the relevant rules in the Waikato Regional Plan and the RMA;
  

20 Waikato Regional Council v Tui Glen Farm Ltd DC Hamilton CRI-2011-072-130, 14 August 2012.

(b) Obtain an effluent system improvement plan approved by an accredited designer (being a dairy effluent warrant of fitness assessor who is accredited through Quality Consultants of New Zealand Ltd) to address the improvements required in accordance with the dairy effluent warrant of fitness assessment;

(c) Complete the dairy effluent warrant of fitness assessment within 30 working days of the date of the order;

(d) Provide a copy of the assessment and the plan to the Council within 50 working days of the date of the order;

(e) Ensure the works and actions in the plan are undertaken:

• (i) In accordance with the plan;
  
• (ii) In accordance with any rules under the Waikato Regional Plan;
  
• (iii) Under the direction of an accredited designer;
  
• (iv) Prepare a comprehensive Effluent Management Plan for the dairy effluent system, and provide a copy to the Council (for the Council’s records); and
  
• (v) Within a three month timeframe.
  

(f) For any role connected with the management of effluent on the property, provide the person to be engaged for that role with copies of:

• (i) The enforcement order;
  
• (ii) All reports obtained in connection with the enforcement order including the Effluent System Improvement Plan and Dairy Effluent Warrant of Fitness Assessment; and

• (iii) Associated information forming part of the Dairy Effluent Warrant of Fitness Assessment.
  

Defendants’ submissions

[31] Counsel for Cazjal Farm and Mr Walling submitted that, contrary to the characterisations by the prosecutor, these defendants are responsible and contrite. He pointed to the evidence of this, including early guilty pleas, co-operation with the Council, undertaking significant expenditure of the order of $185,000 to improve the effluent management system, consenting to the making of an enforcement order and appointing an effluent manager for this and other farms. He referred to the 2017 sentencing decision21 where I noted how the discharges then might have been avoided had there been a complete effluent disposal system available. Counsel submitted that now that appropriate infrastructure had been installed and experienced managers had been engaged, it could not be said that the company or Mr Walling had proceeded recklessly.

[32] On that basis, counsel pointed to the contractual position between the company and the co-defendant contract milkers, G & V Farms Ltd and Mr Smith. The contract makes the contractor personally responsible for the milking operations of the farm, including the operation of the effluent disposal system. Counsel acknowledged that such a contract could not affect criminal liability but submitted that these contractual arrangements, together with the upgrades to the effluent disposal infrastructure, means that culpability for breach of the specific obligations for management of the effluent system sits squarely with the contract milker and its staff, including its farm manager. He submitted that there was no gain to either Cazjal Farm or Mr Walling from any cutting of corners and no benefit from any offending, given the sums invested in the effluent system.

[33] Counsel acknowledged that the previous enforcement history was an aggravating factor for the company, but that Mr Walling has no prior convictions. He submitted that given the subsequent upgrades to the system, there was no need for specific deterrence as that would be a signal to others that upgrading their systems

21 Waikato Regional Council v Cazjal Farm Limited & Olson fn 1.

would not earn them any credit. He submitted that the full 25% deduction should be made for early guilty pleas and that a further 5-10% would be appropriate given their co-operation and further improvements to the effluent system.

[34] In respect of effects on the environment, counsel acknowledged that there had been discharges to streams but submitted that there was little clear evidence of actual damage and that any concentrations of contaminants likely dissipated quickly.

[35] As to comparable cases, counsel submitted that most dairy effluent cases are associated with deficiencies in infrastructure, so that this case is distinguishable. He submitted there was no case involving state of the art infrastructure with a contract milker in charge of operations. He pointed to Otago Regional Council v Plakmaj Holdings Ltd where the contract milker, operating under a similar contract, was charged but the owner was not, although the Court observed that the owner of the land was partly responsible for what happened.22

[36] In respect of the abatement notice, counsel advised that Mr Walling had been unaware that it was still in effect but noted that the contract milker had been made aware by Mr Walling that there had been a previous problem and that both Mr Smith and Mr Thomason were told repeatedly to be vigilant.

[37] In relation to an appropriate starting point, counsel submitted that the offending comes within level 2 of the Chick scheme, leading to a starting point of $70,000 for the company and $50,000 for Mr Walling. He submitted that the starting points submitted by counsel for the prosecutor would be manifestly excessive as they ignore the amount spent on upgrading the effluent system, the operational responsibilities of the contract milker and the causes of the discharges being operational error by failing to maintain and keep an eye on the irrigators. At most, counsel submitted that more oversight could have been exercised, but given the terms of the contract and the experience of the contractor even that was mitigated.

22. Otago Regional Council v Plakmaj Holdings Ltd DC Invercargill CRI-2010-017-000247, 26 July 2010.

Prosecutor’s reply

[38] In reply, counsel for the prosecutor accepts that Cazjal Farm and Walling co- operated to the extent that they have accepted the proposed enforcement order and have agreed to Council staff speaking to Cazjal Farm staff about compliance. However, counsel submitted that it is appropriate to take into account the attitude of the offenders leading up to and during the period of the offending. Counsel’s submission is that during both periods Cazjal Farm and Mr Walling can be assessed as having a continued lack of oversight and communication and failed to use the Farm Dairy Effluent plan or put any structure or preventative measures in place. Also relevant to their post-offending attitude is that maintenance does not appear to be undertaken until 12 October 2021, which was after the first two discharge incidents.

[39] Counsel was also critical of the defendants’ assertion that the effluent system was “state of the art”. Counsel submitted that the offending was not the result of three isolated poor decisions by staff members, but the failure of the system as a whole. Poor decisions and equipment issues put additional pressure on the system and raised the risk of discharge. Part of the criticisms of the system included that:

• (a) the property is very difficult to irrigate due to topography and the location of waterways on the site;
  
• (b) mismanagement of the pond level meant there was no effective effluent storage;
  
• (c) the hydrants were unavailable; and
  
• (d) there was a lack of policies, procedure, guidelines, induction and training.
  

[40] In response to the contractual arrangements in place between the parties and the parties’ relative culpability, counsel submitted that it is beyond dispute that defendants cannot contract out of their responsibilities under the RMA.23 In this case

23 Hawkes Bay Regional Council v Te Pohue Limited DC Napier CRI-2007-041-1243, 7 November

G & V Smith Ltd held the role of the farm manager and was responsible for managing and supervising their employee Mr Thomason. Cazjal Farm and Mr Walling owned the farm, the herd and the infrastructure, and also had the ability to influence the management of the property and to direct G&V Smith and, through that company, Mr Thomason in their operation.

[41] In relation to the extent that contractual arrangements can inform the Court’s assessment of culpability counsel submitted that:

• (a) The roles and culpability of defendants often overlap. The fact that another is also responsible and has failed in their duties does not reduce the culpability of another party. The correct approach is to individually assess each offender’s culpability.
  
• (b) Contractual arrangements can be taken into account by the Court in its assessment, but the Court may elect to put more/less weight on such arrangements in assessing culpability and take into account many factors.
  
• (c) With contractual arrangements there is risk that parties incorrectly assess that they have unburdened themselves of liability, there may be a power imbalance in contractual arrangements where one party may feel that they have little choice but to agree, while those who own the and profit from the business attempt to distance themselves from the regulatory requirements.
  

[42] Finally, the defendants were critical of the prosecution’s approach to the starting point and submitted that an overall fine of $70,000 would be more appropriate.

[43] In reply, counsel submitted that the starting points adopted by the prosecution are based on its analysis of the facts, its assessment of culpability, and the applicable case law.

2007.

[44] Complicating the approach to an appropriate starting point is the repeated nature of the offending. There were three separate discharge incidents between June to November 2021. These incidents continued despite the visits and intervention by the Council on each occasion and the existence of a 2016 abatement notice and a further abatement notice issued after the June offending.

[45] The prosecution’s position is that each of the three events involved a discharge of contaminants into waterways. Each in isolation would be regarded as serious and ought to attract a penalty in Band Two of the now modified Chick bands, being fines in the range of $40,000 to $80,000.

[46] In the case of Cazjal Farm the $180,000 starting point reflects an adjustment for totality and amounts to a $60,000 starting point per discharge incident (which is in the middle of Band Two). By contrast the defence submission for a $70,000 starting point equates to $23,000 starting point for each discharge event. Counsel submitted that identifying the individual penalty appropriate for each discharge event and adjusting for totality is consistent with the approach suggested by Judge Harland in Waikato Regional Council v Nagra Farms.24

Evaluation

[47] The effects of the offending are at a moderate level. The analysis of samples taken for the three incidents confirmed elevated levels of contaminants consistent with dairy effluent. The adverse effects of such discharges have a cumulative effect on waterways. There is widespread concern about the quality of waterways. There are also social and cultural effects on those nearby.

[48] I acknowledge that the contract milker was contractually responsible for operational matters, but Cazjal Farm and Mr Walling had responsibilities too. Cazjal Farm and Mr Walling had to provide infrastructure, had oversight of the farm and had the ability to influence farming operations. Mr Walling visited the farm from time to time, although Mr Walling stated he did not get out to the farm very often.

24 Waikato Regional Council v Nagra Farms Limited [2019] NZDC 2382 at [51], [80].

[49] Cazjal Farm and Mr Walling would have been aware of the challenging nature of the Farm both in terms of the topography and the farm management systems. They were on notice that there were issues with management of farm effluent. There had been a number of inspections on the farm, since 2016, and the visits by Council officers on each of the dates of this offending should have highlighted the need to address concerns. An abatement notice had been issued in June 2016 and copies provided to Cazjal Farm and Mr and Mrs Walling. Three separate contract milkers have been prosecuted for dairy effluent offences over three seasons (2017/17, 2019/20, and 2021/22). The past prosecutions should have put Cazjal Farm and Mr Walling on notice to take greater care. Further, Cazjal Farm and Mr Walling were sent letters in December 2019 and November 2020 reminding them that the abatement notice was still in place and that they had a responsibility to ensure anyone contracted to run the farm was aware of and complied with the abatement notice. They were also reminded that, as owners of the farm, they had responsibility to ensure compliance with farm animal effluent storage and irrigation rules.

[50] The Summary of Facts records that as a result of prior enforcement action, in combination with the higher level of risk that this property presented in terms of effluent irrigation, Cazjal Farm had established farm protocols that included an effluent system manual that outlined how the effluent infrastructure operated and an effluent system induction whereby all incoming contract milkers and their staff would receive an on-farm induction on how the system operated to help eliminate the risk of non-compliance.25 The Summary of Facts records that the induction did not include training on compliance, relevant Waikato Regional Plan rules, record keeping, effluent application rates, nor did it highlight the risks associated with irrigating effluent onto land on the Farm.26 It has been established that the Farm policy was not followed for the start of 2021/2022 dairy season and that no proactive measures were put in place by either Cazjal Farm or Mr Walling prior to the 30 June and 21 September incidents.27

[51] Mr Walling suggested that managing the effluent systems should have been common sense to the other defendants, as experienced farmers, until he could show

25 Agreed Summary of Facts at [97].

26 Agreed Summary of Facts at [41].

27 Agreed Summary of Facts at [98].

them how the system worked. Following the 30 June incident, Mr Walling says he spoke with the other defendants and told them they must not allow effluent to run into waterways. There is some dispute as to what was instructed around irrigating paddocks 13 and 14. Mr Walling further stated he had not followed up on whether the effluent system induction he had organised following the 30 June incident had been completed or repairs made to a leaking effluent hydrant that he had been made aware of previously.28

[52] I acknowledge that after the September incident, Cazjal Farm and Mr Smith agreed that G & V Farms Ltd should employ a new staff member, Mr Boss, whose responsibility would be to manage dairy effluent and effluent irrigation on the farm. In relation to the November incident Mr Walling considered he had instructed Mr Boss and management of the effluent was Mr Smith’s responsibility.

[53] I consider Cazjal Farm and Mr Walling failed to meet some of their ownership and governance responsibilities, which contributed to the offending. Cazjal Farm and Mr Walling failed to:

• (a) notify the existence of the existence of the abatement notice and its requirements;
  
• (b) explain the effluent management system;
  
• (c) notify the existence of and explain the Effluent Operation Manual;
  
• (d) explain the identified risks relation to effluent irrigation;
  
• (e) arrange for on-farm induction of the effluent management system; and
  
• (f) supply with or sign a Contract Milking Agreement,
  

to any of the new staff on the farm for the 2021/2022 dairy season.29

28 Agreed Summary of Facts at [104].

29 Agreed Summary of Facts at [102].

[54] The risks, the relevant permitted activity rules and details of the abatement notice were subsequently given to the other defendants and their staff by the Council staff member investigating the discharges.30

[55] It appears there has been a lack of induction and/or training from Cazjal Farm and/or Mr Walling for a long period. The Summary of Facts records that when Mr Boss worked on the Farm as a contract milker from 1 June 2019 to 10 September 2019, he did not receive any effluent management training from Cazjal Farm, although he did received training from the company PumpN.31

[56] I acknowledge that Cazjal Farm and Mr Walling undertook extensive changes to the effluent management system following the 2016 offending, including installing a large storage pond, purchase of travelling guns, a computer system that alerts problems, sensors which restrict effluent flows depending on pond levels. While the contract milker had a contractual responsibility to “operate the effluent disposal system in an efficient and workmanlike manner”, Cazjal Farm and Mr Walling were contractually responsible for providing the system for disposal of effluent. The effluent management system was described by the defendants as “state of the art” but there were problems with the system that contributed to the discharges.

[57] The Summary of Facts records contributors to the effluent breaches were:32

• (a) faults within the effluent loop lines that eliminated the more favourable areas of the irrigation block, this is similar to the circumstances of the 2016 non-compliance;
  
• (b) leaking effluent hydrants were adversely influencing the operative loop line pressure, causing the effluent pump to trip out repeatedly, making irrigation more complicated and difficult to manage;
  
• (c) that management failed to ensure that the required repairs, which had been notified to them, were undertaken in a timely manner;
  

30 Agreed Summary of Facts at [99].

31 Agreed Summary of Facts at [77].

32 Agreed Summary of Facts at [100].

(d) that Cazjal Farm chose to employ an absentee contract milker for the 2021/2022 dairy season, meaning there was a lessor level of operational management available on the Farm; and

(e) that this factor was also identified as a contributing factor in the 2019 prosecution where the contract milker was not living on the Farm and was managing two dairy farms for Mr and Mrs Walling. In this case, G & V Farms Limited are managing three dairy farms for Mr and Mrs Walling for the 2021/2022 dairy season.

[58] On those facts I consider the offending comes within the upper end of level 2 of Chick. Cazjal Farm and Mr Walling have shown a reluctance to address matters to ensure a safe system was operating in that they were on notice as to their responsibilities, they did not provide a proper induction (in line with farm policy), they did not tell their contract milkers about the abatement notice, and they hired a contract milker who was not living on the farm knowing this was a contributing factor in an earlier prosecution. Cazjal Farm and Mr Walling had systems in place and yet did not execute their responsibilities and protocols. There were also system failings which contributed to the offending. These system failings were not fixed. The lack of oversight and system failings meant that there were multiple discharge incidents.

[59] In these circumstances the actions of Cazjal Farm and Mr Walling could possibly be described as demonstrating a want of care, which would normally put the offending into level 3 of the Chick bands, but that is counterbalanced by the contractual arrangements in place. Overall I would describe the offences as being at the higher end of level 2, on the cusp of level 3 in Chick.

[60] I considered whether the charges as between Cazjal Farm and Mr Walling should be approached on a global basis because a fine against one effectively comes out of the pocket of the other, however both counsel appear to accept that an appropriate sentencing outcome would be a fine against each, having proposed starting points for each of them. While I accept there is some overlap between Cazjal Farm and Mr Walling, I agree that Mr Walling’s involvement was not limited to that of the

company, as he handled the overall operation of the company and attended the property and directed others.

[61] Notwithstanding the difference in penalties between corporate and individual offenders, it is common practice for family-owned corporate farms that similar levels of fines are imposed on them as individuals. That reflects the reality that such offenders are commonly each other’s alter egos for all intents and purposes.33

[62] The Court has been signalling in a number of cases that there might be some upward movement of starting points as dairy farm offending continues to come before the Court. Considering the previous cases and the circumstances of this case, I consider that an appropriate starting point for these charges would be $100,000.

[63] The Court regularly observes that breaches of abatement notices are inherently serious matters in and of themselves. The Court has commented a number of times that failure to comply with abatement notices is serious. Abatement notices are instruments used by councils to ensure persons meet their environmental obligations. Penalties for failure to comply with abatement notices should therefore have sufficient bite to have a deterrent effect. I determine that an appropriate starting point for the abatement notice offence is $20,000.

[64] This gives a total starting point of $120,000 for each of Cazjal Farm and Mr Walling. I record that the starting point would have been higher, but for the inter- relationship of the defendants.

Aggravating and mitigating factors

[65] Cazjal Farm was sentenced for RMA offending related to discharges of effluent in 2017. An abatement notice was issued in 2016. The prosecutor submits a significant uplift is appropriate from the starting point to reflect the prior enforcement history.

[66] The prosecutor submits a significant uplift is appropriate for Mr Walling to reflect the prior enforcement history against his companies. Mr Walling was a key

33 Manawatu-Whanganui Regional Council v Huka View Dairies Ltd [2020] NZDC 26051 at [17].

director and shareholder of Cazjal Farm on each of the occasions when enforcement action was taken against the company. The prosecutor submits the prior offending by Mr Walling’s companies may also be taken into account.34 Mr Walling is both a director and shareholder of Tui Glen Farm Limited and Walling Family Farms Limited. Those companies were sentenced in 2012 regarding earthworks, and incomplete compliance with abatement notices.35 Regarding the offending by Tui Glen Farm Ltd the Court found that Mr Walling had a somewhat cavalier attitude, and the behaviour was described as reckless, though not at the highest level. Regarding the offending by Walling Family Farms Limited, the Court found Mr Walling was extremely careless in his approach to the checking of a resource consent to see if it covered the works in question.

[67] Counsel for the defendants submits that Cazjal Farm has taken significant remediation steps since the first offending, to its considerable credit, and that Mr Walling has no previous convictions. I accept that the relationship of these defendants bears upon the present situation. Mr Walling is or was a director and/or shareholder of companies which have previously been sentenced. I accept the submission that I am dealing with a situation where previous non-compliance can be considered an aggravating factor of the current offending for both Cazjal Farm and Mr Walling. I will apply an uplift of 10 percent for both Cazjal Farm and Mr Walling. This could have been higher, but I wish to acknowledge the work undertaken at this farm to upgrade the system since the 2017 sentencing, and to acknowledge that the Tui Glen Farm Limited and Walling Family Farms Limited offending was now some years ago.

[68] I give no credit for co-operation or further improvements to the effluent management systems, as these are expected given the offending that occurred.

[69] I agree that Cazjal Farm and Mr Walling are each entitled to a 25% discount for an early guilty plea.

34 Counsel referred to PF Olsen Ltd v Bay of Plenty Regional Council [2012] NZHC 2392; Waikato Regional Council v Hillside Farms Ltd DC Hamilton CRI-2008-019-2997, 28 August 2009; Ministry for Primary Industries v Esplanade No 3 Ltd [2019] NZDC 6400.

35 Waikato Regional Council v Tui Glen Farm Limited DC Hamilton CRI-2011-072-130, 14 August 2012.

[70] The parties have agreed an enforcement order should be made. In the circumstances I consider it desirable to make orders largely on the terms proposed in the draft orders. The orders are attached as Appendix 1. I am of the view that a discount is warranted for acceptance of an enforcement order, and to acknowledge the work that will be undertaken as a result. I apply a discount of five percent.

[71] Accordingly, this gives an end sentence of $96,000 each for Cazjal Farm and Mr Walling.

G & V Farms Ltd and Gary Dean Smith

[72] I refer to paragraph [5] of this decision and the proposed resolution to the charges against G & V Farms Ltd and Mr Smith. I will proceed to give a sentence indication on the basis of that proposed resolution.

Prosecutor’s submissions

[73] Counsel for the prosecutor submits that while G & V Farms is not charged in relation to the discharge on 30 June 2021, it had been the contract milker on the farm since 1 June and so its director, Mr Smith, would have been aware of the event. He was also given a copy of the abatement notice that had been issued in 2016. Notwithstanding that, counsel submits that the Council’s investigation following the discharge on 21 September 2021 showed poor management practices, including little or no training or induction of Mr Thomason or his successor Mr Boss and a failure to establish effluent management procedures or keep effluent records. There were faults in the effluent loop lines which restricted the areas available for irrigation, similar to the position in 2016, and effluent hydrants were leaking and not repaired, causing pumps to turn off. G & V Farms was contracted to manage three dairy farms that season and its sub-contracting arrangements resulted in inadequate supervision or training.

[74] On that basis, counsel characterises the offending by G & V Farms as reckless, having been on notice since 30 June of the issues and risks associated with effluent management on the farm and having done little or nothing to avoid those.

[75] The prosecutor submits an appropriate starting point for G & V Farms would be $120,000 to $150,000.

Defendants’ submissions

[76] Mr Smith is the active principal of G & V Farms and was contracted on an urgent basis as the contract milker by Mr Walling on behalf of Cazjal Farms Limited less than two weeks before commencement of the 2021/2022 milking season.

[77] G & V Farms appointed Mr Thomason to operate and manage the farm on very short notice. Mr Thomason’s employment was brought to an end in mid-October 2021. Mrs Walling told Mr Smith that she wished to have a previous employee Mr Boss return to take on the effluent management role at the farm. Mr Smith accepted that decision and employed Mr Boss in the role of effluent manager, with temporary additional responsibility for feeding out.

Environmental effects

[78] Counsel submits that a realistic appraisal of the effects of the three discharges is that one of the discharges, through the farm pond, resulted in moderately serious contamination of the Matapara Stream and the other two discharges resulted in low levels of surface water contamination.

[79] Counsel submits it is reasonable to conclude that the concentration of contaminant from the November discharge in any downstream watercourse would be very low.

Culpability

[80] Counsel for G & V Farms submits it did not attempt to “sub-contract” any functions, but there was a team engaged, comprising a farm manager and farm workers, to conduct the day-to-day operations on the farm, including effluent management. Counsel submits that G & V Farms were caught between the complications of effluent management on this farm, and the poor decisions made in relation to irrigation management made by staff on the farm.

[81] Counsel does not suggest that G&V Farms are blameless, and it is accepted in hindsight that they could have taken more care to ensure that the correct irrigation decisions would be made. However, as an absentee contractor there were limits on the degree of personal supervision or monitoring that was possible.

[82] Counsel submits that before Mr Thomason’s employment commenced, Mr Smith made sure he knew that G & V Farms would not be represented on the site daily, and that most of the daily decision-making would be left to Mr Thomason as the farm manager. Mr Thomason assured Mr Smith that he and his family would be able to manage farm operations, including the effluent system, with occasional attendances by Mr Smith. Most contact between Mr Smith and Mr Thomason was via text or email.

[83] There is a dispute amongst the defendants about the events that led up to the over-irrigation on 21 September 2021. However, counsel accepts that irrigation was carried out in a manner that resulted in two overland flows of effluent.

[84] Counsel submits that these poor decisions leading to the September incident could not have been anticipated by Mr Smith on behalf of G & V Farms. Counsel submits that the decisions made by Mr Thomason on 21 September 2021 in irrigating paddock 14 were not foreshadowed nor understood by Mr Smith to be a likely event. On this basis counsel submits that the was nothing to justify the description of G & V Farms’ actions as being reckless.

[85] Counsel submits the decision by Mr Boss to install the irrigator on a steep slope on 11 November 2021 and to irrigate for too long a period was not a decision that could or should have been anticipated by Mr Smith. He had been assured by Mrs Walling that Mr Boss had sufficient experience to manage the effluent on the property, having already worked on the property.

[86] Mr Boss’ decision to over-irrigate on that date was the result of bad decision making. Again, counsel submits there was nothing to justify the submission that Mr Smith acted recklessly leading up to the November 2021 discharge incident. Counsel submits that this decision-making was not the result of a failure on Mr Smith’s part.

[87] G & V Farms did not have any prior knowledge of any deficiencies in the effluent pumping system before the 2021 milking season started on 1 June 2021. The issues with the availability of some of the hydrants came to Ms Smith’s attention after commencement of the milking season.

[88] Regarding the faults within the effluent loop lines, the only action that G & V Farms could take was to report the need for repair to the farm owner promptly. Mr Smith instructs that he did exactly that, informing Mr Walling of the need for repairs when he became aware of the problem. Mr Smith has said in his interview with prosecution officers that the issue was addressed promptly when drawn to the farm owner’s attention.

[89] Counsel submits that the repairs undertaken in relation to the leaking effluent hydrants were undertaken in a timely manner, notwithstanding Mr Thomason’s claim otherwise.

[90] Counsel submits there was no reported or known substantial problem with effluent management despite regular visits to the farm by Mr Smith and Mr Walling. Issues with the hydrants were addressed and all necessary equipment was present on the farm and operational, to the best of Mr Smith’s knowledge. In particular, counsel submits that there is no evidence of any event during the period 30 June 2021 to 21 September 2021 that would alert Mr Smith to any ongoing problem in the way that Mr Thomason was operating the irrigation equipment.

[91] Because of the low rainfall counsel submits that there would have been no expectation by Mr Smith that there would be a high requirement for irrigation. There had been ample opportunity for irrigation in relation to both incidents, and therefore no pressure for irrigation at any marginal locations.

Starting Point

[92] Counsel submits that none of the cases cited for the prosecutor provide justification for the extremely high starting point that is suggested for G & V Farms

of between $120,000 to $150,000. Counsel submits that the cited cases tend to indicate a starting point in the range $80,000 to $100,000, at the upper end of level 2 in Chick.

[93] Instead, counsel submits that the offending on the part of G & V Farms is similar to that in Southland Regional Council v Fernlea Farm Limited.36 In that case there were two discharges, one from an overflow and one from a stone trap, and an additional charge for breach of an Abatement Notice. One of the discharges entered water through a tile drain. The Court noted that it would have lifted the starting point for the discharge offences to $100,000 instead of $90,000 if there had been information about the extent of volume of the discharges, or the vulnerability of the receiving river environment.37 Counsel submits that even if it is determined that the vulnerability of the river environment is a more serious factor in the present case, that would not indicate a starting point higher than $90,000.00.

[94] Counsel submits that the offending in Waikato Regional Council v Chisholm Farms Limited38 has strong similarities to the present case, with two sequential effluent discharges about a month apart which both entered surface water. The environmental effects of the more serious discharge in Chisholm were greater than the September discharge in this case. The reported effects of the less serious discharge in Chisholm were more serious than the effects of the November discharge event in this case. Counsel submits Chisholm indicates a lower culpability on the part of G & V Farms as having an intermediate role without either the infrastructure responsibility or the ability to directly control or anticipate operational decisions.

[95] For the foregoing reasons counsel submits an appropriate starting point would be $65,000 to $75,000.

Mitigating and aggravating factors

[96] Counsel submits a discount of 10% should be allowed for good character demonstrated by the principal’s previously trouble-free career of over 35 years in dairy

36 Southland Regional Council v Fernlea Farm Limited [2020] NZDC 10046.

37 Southland Regional Council v Fernlea Farm Limited fn 36 at [15].

38 Waikato Regional Council v H & S Chisholm Farms Ltd [2018] NZDC 20594.

farming and co-operation with the Regional Council. Counsel submits a 25 percent discount should be allowed for early guilty plea.

Evaluation

[97] The effects of the offending are moderate. The analysis of samples taken for the two incidents confirmed elevated levels of contaminants consistent with dairy effluent. The adverse effects of such discharges have a cumulative effect on waterways. There is widespread concern about the quality of waterways. There are also social and cultural effects on those nearby.

[98] While G & V Farms could be described as the “middle person” between the farm owner who was to provide the infrastructure and the decision making of those engaged to undertake the day-to-day work, G & V Farms had operational responsibilities at the farm, having been contracted to “operate the effluent disposal system in an efficient and workman like manner”.

[99] The management responsibilities of G & V Farms were not executed in a timely manner. There were faults in the effluent loop lines which restricted the areas available for irrigation, and effluent hydrants were leaking and not repaired, causing pumps to turn off. The Summary of Facts records that management failed to ensure repairs were undertaken in a timely manner.39 More care should have been taken to ensure the infrastructure was fit for purpose.

[100] The Summary of Facts records that G & V Farms and Mr Smith, in managing three dairy farms during 2021/2022, effectively sub-contracted the responsibility of managing the farm to a farm manager without any real direct supervision of the operation of the effluent management system or training for the farm manager to follow.40 I do note however that it was Mrs Walling who told Mr Smith that she wanted Mr Boss to take on the effluent management role. The fact that he was a previous employee would have suggested to G & V Farms that he should have had some

39 Agreed Summary of Facts at [100].

40 Agreed Summary of Facts at [100].

awareness of the system and topography of this farm. I am concerned about the lack of oversight and training by G & V Farms Ltd.

[101] In criticising G & V Farms’ lack of supervision and oversight, I note in particular that they were also managing three farms during this season and were not on-site.

[102] While the specific choices made by Mr Thomason and Mr Boss might not have been anticipated by G & V Farms, it was on notice regarding effluent management issues following the June incident, they were given a copy of the abatement notice, and they would have known about the tricky topography of the farm and the infrastructure issues. More care should have been taken to ensure correct decisions were being made.

[103] Given G & V Farms Ltd.’s poor oversight and management and lack of training, I would adopt a starting point of $80,000. I would allow a discount of 10% for good character and a 25% discount for early guilty plea. Accordingly, I indicate that I would be likely to convict G & V Farms Ltd and sentence it to pay a fine of

$52,000.

Kelly Thomason

[104] Mr Thomason faces one charge of contravening s 15(1)(b) of the RMA for discharging effluent to land where it may enter water on 21 September 2021. Mr Thomason seeks a discharge without conviction under ss 106 and 107 of the Sentencing Act 2002.

Prosecutor’s submissions

[105] Mr Thomason was responsible for the discharge of effluent via the irrigator on 21 September 2021.

[106] Counsel’s submission is that while there were factors that made the property more difficult to manage, Mr Thomason was made aware of these issues following an earlier incident in June 2021. He was on notice regarding the risks of failing to

properly manage effluent on the property and had been provided with a copy of an abatement notice following the June 2021 incident.

[107] Counsel submits that a starting point of $80,000 is appropriate as the offending involved an actual discharge of effluent into a waterway.

[108] Counsel accepts that credit is available for an early guilty plea, and acknowledges that Mr Thomason has no prior enforcement action or convictions that is relevant.

Defendant’s submissions

[109] Mr Thomason had been employed on the farm for less than four months in September 2021. Counsel submits that at the time of the offending Mr Thomason had never been given an induction and was not made aware when he started that there was an abatement notice in place.

[110] Rather than the offending being characterised by recklessness on Mr Thomason’s part, counsel submits that the primary cause of the discharge was the farm’s effluent management system rather than Mr Thomason’s operation of it. This can be demonstrated by the following:

• (a) there have been previous incidents on the farm, with Cazjal Farm being prosecuted for events in 2016.41 While a storage pond was installed in 2017 following Cazjal Farm’s initial prosecution, this does not appear to have resolved the effluent issues;
  
• (b) in 2020 a contract milker on the farm was prosecuted for offending;
  
• (c) the pond was near overflowing in September 2021. Mr Thomason was required to irrigate in order to avoid this occurring. If the tank overflowed there would be a real risk of the effluent getting into waterways;
  

41 Waikato Regional Council v Cazjal Farm Limited fn 1.

(d) the farm had issues with hydrants on portions of the farm that were more suitable for irrigating. This prevented the irrigator being able to operate in these paddocks and restricted the areas available for Mr Thomason to irrigate. The hydrants were still not operational on 21 September. As Mr Thomason did not have authority to contract someone to undertake the work he was reliant on Mr Smith or Mr Walling to arrange this;

(e) Mr Thomason asked Mr Smith address issues with the system, but they were not addressed in a timely manner;

(f) after the abatement notice had been issued Mr Thomason refused to undertake any irrigation without first consulting with Mr Smith. Before he undertook the irrigating on 21 September 2021, Mr Thomason consulted Mr Smith and Mr Walling about his options for irrigating to empty the pond; and

(g) there was a further discharge in November 2021 after Mr Thomason had been dismissed.

[111] Counsel submits that Mr Thomason was placed in a near impossible position, with few options available to him. For this reason, counsel submits that Mr Thomason’s culpability in this situation is low.

Application for discharge without conviction

[112] Mr Thomason seeks discharge without conviction. Section 106 and 107 of the Sentencing Act 2002 apply. The established three stage analysis for discharge without conviction is:

• (a) Assess the gravity of the offending taking into account all aggravating and mitigating factors of the offending and the offender;
  
• (b) Identify the direct and indirect consequences of a conviction on the defendant; and

• (c) Decide whether those consequences are out of all proportion to the gravity of the offending.
  

[113] Overall, the Court retains a discretion to grant or refuse the application after considering those matters.

Gravity of the offending

[114] Regarding the gravity of the offending, counsel for Mr Thomason submits that Mr Thomason’s offending falls within band one of Chick, albeit at the higher end due to the potential environmental impact on the basis that the primary cause of the discharge was the poor system rather than Mr Thomason’s operation of it.

[115] The prosecutor submits the offending falls into band 2 of Chick, and emphasises the seriousness of the high-contaminant discharge into water with real adverse environmental effects. The prosecutor submits:

• (a) the pond being “near overflowing” was due to the management of the system, with the pond being kept at a high level. The decision making as to where the level of the pond would be kept was not solely that of Mr Thomason, however he also had responsibility for the management of the pond level;
  
• (b) the manner of irrigation was within his control and was done poorly and in inappropriate areas with insufficient monitoring; and
  
• (c) issues with the available hydrants and lack of options for irrigating can appropriately be regarded as system issues which appear to have been out of Mr Thomason’s control.
  

[116] The prosecutor submits the offending must be seen in the context that Mr Thomason was the farm manager and employed to manage the effluent, and the offending is moderately serious.

[117] The prosecutor acknowledges that Mr Thomason could be considered lower down the chain of responsibility in this operation than his co-defendants, in the sense that he had less power and more limited decision-making capacity in relation to the assets of the farm.

[118] It is accepted that Mr Thomason has prior good character.

Consequences of a conviction

[119] Mr Thomason has been a farmer for over 20 years. This is his trade and his means of earning a living for himself and his family. He intends to continue working as a farmer. He has always worked as an employee rather than as a contract milker or sharemilker. He does not own any stock and he does not have the financial capacity to afford any. Counsel submits his work in the industry is dependent on being offered employment by a farm owner or contract milker.

[120] I was advised that after being dismissed from his employment Mr Thomason faced difficulty obtaining a new role. He had never experienced difficulty like this before. He would have expressions of interest but no one except his current employer offered him employment. He believes that after disclosing the circumstances leading to his dismissal prospective employers considered him too much of a risk to employ.

[121] Counsel for Mr Thomason submits having a conviction for discharging effluent into a waterway would be significant in the farming industry. Without further explanation, such a conviction would likely indicate that the individual will not take necessary precautions when undertaking their duties and they will be a liability. This sentiment is shared by Mr Thomason's current employer. While Mr Thomason's current employment will not be impacted by a conviction, his employer indicated he would not have hired him had he already been convicted. He was also of the belief that such a conviction would be a red flag and other employers would be reluctant to take on the risk of employing Mr Thomason.

[122] In the dairy industry farmers frequently change employers. Every year on 1 June farmers often change their farm structure. Employees and contract milkers

often move to new farms. Given the frequent movement in the industry and Mr Thomason's own employment history, it is highly likely that Mr Thomason will continue moving to new farms through the years. Given the instability and the likely high number of job applications that he will make in the future, it was submitted that the impact of a conviction will be even greater.

[123] While Mr Thomason does not currently intend to take on management roles again, he may decide to do so again in the future. Counsel submits that with the added responsibility of oversight of a farm the significance of such a conviction would be even greater if Mr Thomason was applying for a management role. Mr Thomason is earning significantly less as a second-in-charge assistant compared to his previous earnings as a farm manager. Having this barrier to obtaining employment as a farm manager could be significant for Mr Thomason's financial position should he change his mind about being a farm manager in the future.

[124] I was advised Mr Thomason is currently struggling financially. Being dismissed from his job was a significant setback for him financially. His income goes towards paying his personal debts and living expenses. Any loss of income would cause significant hardship to Mr Thomason and he will struggle to meet his repayments. Any financial consequences that Mr Thomason suffers as a result of a conviction will also be felt by his family. He has a tight knit family. His entire family lived on the farm when he worked for G & V Farms Ltd. After the four that were employed were dismissed, they all ended up living in tents together for almost six months. Mr Thomason is the primary earner for his family. Given the structure of his family, should Mr Thomason lose income as a result of a conviction, the consequences will be suffered by his entire family.

[125] Counsel for Mr Thomason referred to Taranaki Regional Council v lnwood42

and Taranaki Regional Council v Lilley.43

42. Taranaki Regional Council v Inwood DC New Plymouth CRl-2013-021-414, -415, 5 November 2013 at [36-38].
43. Taranaki Regional Council v Lilley DC New Plymouth CRl-2010-043-3887, 14 December 2010 at [48].

[126] The prosecutor submits it is notable that Mr Thomason has been able to obtain further employment, and a reference from his current employer. The prosecutor submits the potential employment consequence is not as likely in this case as in others.

[127] The prosecutor refers to examples of cases in which submissions that a conviction will have a negative impact on future employment were made in support of a s 106 application, including Burrows v Otago Regional Council,44 Waikato Regional Council v Bertling and Bertling,45 and Tasman District Council v Langford.46

Proportionality

[128] In Waikato Regional Council v Cazjal Farm Limited47 it was noted that problems with the system were substantially greater than the cause of the discharges. It was determined that there was greater culpability on Cazjal Farm than on Mr Olson, contract milker. It was determined that in the circumstances the disadvantage that Mr Olson would face when seeking employment met the s 107 threshold and a discharge without conviction was granted.

[129] Counsel for Mr Thomason submits his level of culpability is lower than Mr Olson's. Mr Thomason is an employee rather than a contract milker, taking on less responsibility than Mr Olson did. Furthermore, he is only charged with a single discharge.

[130] Counsel submits, as was the case previously, the primary cause of the discharge was the system rather than the operation and in those circumstances Mr Thomason's culpability is lower than the other defendants for his single charge. On the other hand, the consequences that Mr Thomason and his family will potentially face are significant. They are already struggling financially and if Mr Thomason was unable to earn an income then they would face great hardship.

44 Burrows v Otago Regional Council [2015] NZHC 861.

45 Waikato Regional Council v Bertling and Bertling [2019] NZDC 16796.

46 Tasman District Council v Langford [2018] NZDC 10793.

47 Waikato Regional Council v Cazjal Farm Limited [2017] NZDC 12226.

[131] Counsel submits that the purposes and principles of the Sentencing Act48 and the RMA49 will be met if Mr Thomason was discharged without conviction. Counsel submits that the principles and purposes of sentencing including accountability, denunciation and deterrence have already been achieved by Mr Thomason being charged. He describes in his affidavit the impact being charged has had on his confidence managing a farm and his reluctance to ever manage a farm again. It is submitted that the test under s 107 of the Act is satisfied and it is appropriate that Mr Thomason be dealt with by way of a discharge without conviction.

[132] The prosecutor accepted that whether the consequences of the conviction are all out of proportion to the gravity of the offending will depend on the Court’s assessment of the gravity of the offending.

Evaluation

[133] The environmental effects of the offending are at the moderate level. The analysis of samples taken for the September incident confirmed elevated levels of contaminants consistent with dairy effluent. While Mr Thomason’s charge relates only to the September incident, the adverse effects of such discharges have a cumulative effect on waterways. There is widespread concern about the quality of waterways.

[134] I appreciate that Mr Thomason was not responsible for providing the systems for the disposal of effluent. Mr Thomason was however required to operate the system in a sufficient manner. I accept that a combination of factors made that difficult. The hydrant was broken preventing irrigation in a more suitable area. There was a lack of induction and training. The pond was near to overflowing in September and had to be reduced. While the offending took place after the June incident and being given a copy of the abatement notice, Mr Thomason took steps to ensure a further incident did not occur and he consulted with Mr Smith. I accept that Mr Thomason was reliant on others (Mr Smith and Mr Walling) to address system issues.

48 Sections 7 and 8 of the Sentencing Act 2002.

49 Sections 5-8 of the Resource Management Act 1991.

[135] I consider Mr Thomason’s culpability to be lower than the other defendants based on the circumstances he faced including the lack of induction or oversight and the presence of systemic problems he had to deal with.

[136] Mr Thomason is the primary income earner for his family. His future in farming is dependent on his ability to gain employment. Information presented on behalf of Mr Thomason demonstrated that this has been difficult following his leaving his position at the farm and will be even more difficult if he is convicted. I accept that he would be significantly disadvantaged in finding work if convicted, and this would have financial consequences. There is a combined risk of employment consequences and ongoing financial hardship that is particularly acute in Mr Thomason’s circumstances.

[137] In this case I consider the consequences for Mr Thomason would be out of all proportion to the gravity of his offending. Accordingly, I discharge Mr Thomason without conviction.

Outcome

[138] I convict Cazjal Farm Limited and sentence it to pay a fine of $96,000. Under s 342 of the RMA I order that the fine be paid to the Waikato Regional Council subject to a deduction of 10% to be credited to a Crown Bank Account.

[139] I order Cazjal Farm Limited to pay $130 as court costs and $113 as a solicitor’s fee.

[140] I convict John Leonard Walling and sentence him to pay a fine of $96,000. Under s 342 of the RMA I order that the fine be paid to the Waikato Regional Council subject to a deduction of 10% to be credited to a Crown Bank Account.

[141] I order John Leonard Walling to pay $130 as court costs and $113 as a solicitor’s fee.

[142] I make an enforcement order under s 339(5) of the RMA against both Cazjal Farm Limited and John Leonard Walling in the terms set out in the order attached to

this decision as Appendix 1. The order is to be registered in the Environment Court at Auckland so that any further process in relation to it under the RMA may be dealt with in that Court.

[143] If G & V Farms Limited were to accept the sentence indication in this decision within 15 working days of the date of this decision and plead guilty to the charge against it, I would convict and sentence it to pay a fine of $52,000 and order it to pay

$130 as court costs and $113 as a solicitor’s fee and, under s 342 of the RMA, order that the fine be paid to the Waikato Regional Council subject to a deduction of 10% to be credited to a Crown Bank Account.

[144] Kelly Thomason is discharged without conviction.

Judge D A Kirkpatrick

District Court Judge | Kaiwhakawā o te Kōti ā-Rohe

Date of authentication | Rā motuhēhēnga: 02/06/2023

APPENDIX 1

IN THE ENVIRONMENT COURT AT AUCKLAND

I TE KŌTI TAIAO O AOTEAROA KI TĀMAKI MAKAURAU

Decision [2023] NZEnvC 114

IN THE MATTER of an enforcement order made under 314(1)(a)

to (c) and (da) and s 339(5)(a) of the Resource Management Act 1991

BETWEEN WAIKATO REGIONAL COUNCIL (ENV-2023-AKL-000068)

Applicant

AND CAZJAL FARM LIMITED

AND JOHN LEONARD WALLING

Respondents

IN THE DISTRICT COURT AT HAMILTON

I TE KŌTI-Ā-ROHE KI TE KIRIKIRIROA

CRI-2022-072-000031 [2023] NZDC 10973

WAIKATO REGIONAL COUNCIL

v

CAZJAL FARM LIMITED AND JOHN LEONARD WALLING

ENFORCEMENT ORDER 2 JUNE 2023

ENFORCEMENT ORDER

[1] Pursuant to sections 314(1)(a) to (c) and (da) and 339(5)(a) of the Resource Management Act 1991 (RMA), the following enforcement orders (the Order) are made requiring CAZJAL FARM LIMITED and JOHN LEONARD WALLING to:

• (a) Obtain a full Dairy Effluent Warrant of Fitness Assessment of the current dairy effluent system at the Property from an Accredited Dairy Effluent Warrant of Fitness Assessor and within the Dairy Effluent Warrant of Fitness Assessment identify compliance risks, including and particular to the irrigation of dairy effluent onto land, and establish what management and safeguards are required to ensure compliance with the relevant rules in the Waikato Regional Plan and the RMA;
  
• (b) Obtain an effluent system improvement plan (Effluent System Improvement Plan) approved by an Accredited Dairy Effluent System Designer (being a Dairy Effluent WOF assessor who is accredited through Quality Consultants of New Zealand Ltd) to address the improvements required in accordance with the Dairy Effluent Warrant of Fitness Assessment undertaken at [1](a) above;
  
• (c) Within 30 working days of the date of the Order, have completed the Dairy Effluent Warrant of Fitness Assessment;
  
• (d) Within 50 working days from the date of the Order, provide a copy of the Dairy Effluent Warrant of Fitness Assessment and Effluent System Improvement Plan to the Waikato Regional Council (the Council) by post and to the email address:

[e-mail]

(e) Once the Effluent System Improvement Plan has been submitted to the Council (for the Council’s records), the respondent is required to ensure the works and actions in the Effluent System Improvement Plan are to be undertaken:

• (i) In accordance with the Effluent System Improvement Plan;
  
• (ii) In accordance with any applicable rules under the Waikato Regional Plan;
  
• (iii) Under the direction of an accredited effluent designer, being a Dairy Effluent WOF assessor who is accredited through Quality Consultants of New Zealand Ltd;
  
• (iv) Prepare a comprehensive Effluent Management Plan for the dairy effluent system, and provide a copy to the Council (for the Council’s records); and
  
• (v) Within a 3-month timeframe.
  

(f) For any role connected with the management of effluent on the property, including farm manager(s) and contract milker(s), prospective employees and contractors, prior to entering any employment contract, contract for services, or otherwise engaging the employee and/or contractor’s labour or services, must be provided with a copies of:

• (i) this enforcement order;
  
• (ii) all reports obtained in connection with the enforcement order including the Effluent System Improvement Plan and Dairy Effluent Warrant of Fitness Assessment; and
  
• (iii) associated information including the matters set out in [2](c) below forming part of the Dairy Effluent Warrant of Fitness Assessment.

(g) Pursuant to s 314(5) of the RMA, this enforcement order shall apply to the personal representatives, successors and assigns of the respondent to the same extent it applies to the respondents.

[2] Definitions for the terms used in these orders are as follows:

• (a) The Property means:
  

The farm at 506 Ngaroma Road, Wharepūhunga.

(b) Accredited Dairy Effluent Warrant of Fitness Assessor means:

A Dairy Effluent Warrant of Fitness (WOF) assessor who is accredited through Quality Consultants of New Zealand Ltd (QCONZ).

(c) Dairy Effluent Warrant of Fitness Assessment means:

A Dairy Effluent Warrant of Fitness (WOF) conducted in accordance with the Quality Consultants of New Zealand Ltd (QCONZ) Dairy WOF programme, involving:

(i) An assessment by an Accredited Dairy Effluent Warrant of Fitness Assessor

(ii) Consideration of whether the farms is meeting the requirements of permitted activity rules;

(iii) Viewing the nutrient budget and checking nitrogen loadings;

(iv) Using a dairy effluent storage calculator to estimate if there is enough storage for the farm effluent system checks over the storage facility for signs of possible risk areas looks at all catchment areas, particularly standoffs, feed pads and underpasses;

(v) Tests the application depth and rate of the irrigation system;

(vi) Identifies and maps high risk areas of the effluent block where effluent must not be irrigated to; and identifies and

maps areas of the effluent block suitable for effluent irrigation; and

(vii) Provision of a report identifying any issues and practical actions to be taken.

Judge D A Kirkpatrick

District Court Judge | Kaiwhakawā o te Kōti ā-Rohe

Date of authentication | Rā motuhēhēnga: 02/06/2023

IN THE DISTRICT COURT AT HAMILTON

I TE KŌTI -Ā-ROHE KI KIRIKIRIRIA

CRI-2022-0072-000031 [2023] NZDC 10973

WAIKATO REGIONAL COUNCIL

Prosecutor v

CAZJAL FARM LIMITED JOHN LEONARD WALLING G & V FARMS LIMITED GARY DEAN SMITH KELLY THOMASON

Defendants

IN THE ENVIRONMENT COURT AT AUCKLAND

I TE KŌTI TAIAO O AOTEAROA KI TĀMAKI MAKAURAU

Decision [2023] NZEnvC 114

IN THE MATTER of an enforcement order made under

314(1)(a) to (c) and (da) and s 339(5)(a) of the Resource Management Act 1991

BETWEEN WAIKATO REGIONAL COUNCIL

(ENV-2023-AKL-000068)

Applicant

AND CAZJAL FARM LIMITED & JOHN LEONARD WALLING

Respondents Appearances: J O’Sullivan for the Prosecutor

M Hammond for Cazjal Farms Limited and J Walling P Lang for G&V Farms Limited and G Smith

J Lang for K Thomason

Date: 3 July 2023, via AVL

WAIKATO REGIONAL COUNCIL v CAZJAL FARM LIMITED [2023] NZDC 10973 WAIKATO REGIONAL COUNCIL v CAZJAL FARM LIMITED [2023] NZEnvC 114

ADDENDUM TO SENTENCING NOTES OF JUDGE D A KIRKPATRICK

5 JULY 2023

On 23 June 2023 decision [2023] NZDC 10973 (the sentence decision) and the associated enforcement orders made in relation to this matter were delivered to the parties.1

The matter was called for further sentencing on 3 July 2023 via AVL. At the sentencing:

(a) It was confirmed that the sentence decision was delivered to the parties on 23 June 2023.2

(b) It was confirmed that the enforcement order attached to the sentence and referenced as decision [2023] NZEnvC 114 in the Environment Court commenced on 3 July 2023.

(c) Sentences were read for Cazjal Farm Ltd and John Walling in accordance with [138]-[142] of the sentence decision.

(d) Charge CRN-15 against G&V Farms was amended. The offence dates were amended to 20/9-13/11/21.

(e) CRN-15 was made a representative charge and its particulars were amended to refer to travelling and stationary irrigators with discharge entering Matapara and Mangaharakeke streams and groundwater tributaries of those streams. A guilty plea was entered by counsel.

(f) CRN-16 was withdrawn and charges in CRNs – 17 and -18 against Gary Smith were withdrawn by leave.

1. The enforcement orders where registered in the Environment Court as decision [2023] NZEnvC 114.

2 The decision is dated 2 June 2023, but was delivered to the parties on 23 June 2023.

(g) The sentence indication in the sentence decision was accepted by G&V Farms Limited.

(h) G&V Farms Limited was convicted on CRN-15 and sentenced to pay a fine of $52,000, with court Costs of $130 and solicitor’s fee of $113 imposed in accordance with s 342 RMA.

(i) Kelly Thomason was discharged without conviction.

D A Kirkpatrick

District Court Judge and Chief Environment Court Judge