R v Fugle [2024] NZDC 3674 (23 February 2024)

Last Updated: 1 March 2024

IN THE DISTRICT COURT AT PALMERSTON NORTH I TE KŌTI-Ā-ROHE KI TE PAPAIOEA

CRI-2020-054-001371 [2024] NZDC 3674

THE KING Prosecutor

v

LESLIE WILLIAM FUGLE AOKAUTERE LAND HOLDINGS LIMITED Defendant(s)

Hearing:	5 October 2023
Appearances:	E Pairman for the Prosecutor S L Baigent for the Defendants
Judgment:	23 February 2024

SENTENCING DECISION OF JUDGE D A KIRKPATRICK

[1] The defendants Leslie William Fugle and Aokautere Land Holdings Limited (ALHL) have been found guilty on charges under the Resource Management Act 1991 (RMA) relating to a residential subdivision of two adjoining plots of land on Johnstone Drive, Aokautere, Palmerston North. Mr Fugle faces one representative charge under s 338(1)(a) of the RMA for breaching s 9(2) of that Act and ALHL faces one representative charge under s 338(1)(c) of breaching an abatement notice.

Background

[2] ALHL is the developer of the residential subdivision and Mr Fugle is the shareholder and the director of ALHL. The two land parcels under development are

R v LESLIE WILLIAM FUGLE [2024] NZDC 3674 [23 February 2024]

Lot 695 DP509873 and Lot 694 DP500578. The development involved numerous earthworks projects to create residential sections. Both parcels share a common boundary with an unnamed waterway running through the eastern part of Lot 695.

[3] On 17 February 2014 the Manawatu Whanganui Regional Council granted two resource consents relating to earthworks on the two land parcels. These consents expired on 1 December 2019. Both consents required the consent holder to submit an erosion and sediment control plan to the Regional Council. Mr Fugle submitted erosion and sediment control plans for each resource consent, but they were found by the Regional Council not to meet the minimum requirements of the consents and so were not accepted as meeting the respective conditions of consent.

[4] The current charges relate to earthworks which occurred following the resource consent lapsing on 1 December 2019, when the provisions of the Manawatū- Whanganui Regional Plan (often referred to as the One Plan) became the effective controls for the site. These controls limit the permitted amount of any earthworks to 2,500 m2 annually.

[5] Inspections at the site were carried out by enforcement officers in 2020 and 2021 and found multiple issues of non-compliance with requirements for large earthworks and issues with erosion and sediment control.

[6] Over 30,000m2 of land had been disturbed over the entire charging period between 1 December 2019 and 28 January 2021. Issues of non-compliance included:

• (a) The extent of earthworks undertaken without resource consent in breach of the relevant rules of the One Plan;
  
• (b) Breach of two abatement notices issued by the Council on 17 December 2019 relating to the earthworks; and
  
• (c) Discharge of sediment from earthworks onto land where it may enter water in breach of s 15(1)(b) of the RMA and the relevant rules of the One Plan.

Prosecutor’s submissions

[7] Counsel for the Crown submitted that an appropriate starting point for Mr Fugle’s breach of s 9 would be between $90,000 to $100,000 and ALHL’s breach of abatement notices would be between $40,000 and $45,000.

[8] An enforcement order were also sought against Mr Fugle. On 5 October 2023 as part of this sentencing process an enforcement order was made on the application of the Crown under s 339(5)(a) of the RMA against Mr Fugle restricting him from participation in land disturbance activities, whether personally or by directing others.

Mr Fugle

[9] In terms of the culpability of Mr Fugle, counsel submitted that the gravity of his offending was high given that he was aware of when the resource consents expired but had continued to undertake earthworks after he had been told multiple times that a certified erosion and sediment control plan was required. She submitted that this was evidence of a blatant disregard or at least wilful blindness for the requirements of the One Plan and the RMA.

[10] The Crown had no evidence of any actual environmental effects arising from the offending. While it is generally accepted that when sediment enters a waterway, it fills in the spaces in riverbeds and can irritate the bodies of aquatic species, it was difficult for the Crown to assess the actual impact of the offending, so counsel submitted this factor to be neutral for sentencing purposes.

[11] Counsel submitted that Mr Fugle was likely to obtain a commercial advantage from his extensive non-compliance as complying with the relevant rules can be time- consuming and expensive.

[12] Counsel referred to the following cases as providing appropriate comparisons for the purpose of sentencing consistency:

• (a) Gisborne District Council v AF Thompson Contracting Ltd1 where a global starting point of $100,000 was adopted for carrying out earthworks in contravention of the relevant plan and disturbing 10,750 cubic metres of land when they held a consent to disturb only 3,700 cubic metres. The defendants did not have sufficient erosion and sediment controls in place. A further $20,000 starting point was adopted for the breach of abatement notice which was only partially complied with;
• (b) Gisborne District Council v Lane2 where a starting point of $120,000 was adopted for the construction of 2.7 kilometres of forestry track without consent and $40,000 for deliberately breaching two abatement notices.
  

[13] Counsel submitted the area of land being worked and the duration involved in the current case were significantly higher than in the AF Thompson Contracting Ltd case and that the offending was more serious as the actions were deliberate as in the Lane case, even though there was no evidence of actual environmental impact in this case. On balance, counsel submitted the offending to be comparable to AF Thompson Contracting Ltd and less serious than in Lane.

[14] The Crown noted a number of instances of Mr Fugle’s previous history of offending as an aggravating factor. He has previously been prosecuted for similar offending by the Regional Council and by the Palmerston North City Council. There have been several enforcement orders issued against him.3 Counsel had sought an uplift of 5 to 10 per cent from any starting point in the absence of an enforcement order to prevent further offending. Since the enforcement order sought by the Crown had been made by the Court, as set out above, an uplift is no longer sought.

[15] Counsel submitted that Mr Fugle’s demonstrated lack of cooperation with the Regional Council should be addressed by an uplift of 5 to 10 per cent from any starting point. Mr Fugle had been convicted of recklessly damaging a vehicle belonging to the Regional Council during one of their inspections.4

1 Gisborne District Council v AF Thompson Contracting Ltd [2021] NZDC 5533.

2 Gisborne District Council v Lane [2022] NZDC 10666.

3 Manawatu-Wanganui Regional Council v Fugle [2011] NZEnvC 314 and [2013] NZEnvC 19.

4 Fugle v R [2022] NZCA 124 at [2] – [6].

[16] Even though the guilty pleas of the two defendants were not entered at the earliest opportunity, the resolution of the cases combined two prosecutions and avoided the need for a jury trial. Therefore, counsel submitted a moderate discount of 20 per cent for an early guilty plea is appropriate.

ALHL

[17] Counsel submitted that the gravity of ALHL’s offending is similar to the Lane case considering how there were no efforts made to comply with the abatement notices 1108 and 1109. The duration of the offence is over a year.

[18] As for Mr Fugle, the change of plea may be given a discount of 20%.

Defendant’s submissions

[19] Counsel for the defendant submitted an appropriate starting point would be

$30,000 for Mr Fugle and $10,000 for ALHL.

[20] As mitigating factors, she noted that the period of offending and the area of land disturbance were less than what the Crown contended with no evidence of environmental harm to any waterway. The offending had ended in 13 months with the completion of the subdivision in early 2021. It was submitted that sentencing should only relate to matters at issue within the charging period and the Crown’s submission implied a more punitive sentence relying on events outside the 13 month charging period.

[21] Counsel submitted that Mr Fugle’s culpability was moderate as he was not acting in deliberate or reckless defiance of the One Plan. She argued that Mr Fugle’s actions were based on his reliance on the advice of his surveyor. She submitted that there was no basis on which to impute any commercial advantage to Mr Fugle. It was also noted that except for one officer of the regional council who unfortunately developed a tense relationship with Mr Fugle, the parties maintained good working relationships. There was no evidence of any adverse effects on the environment. The defendants applied for several consents and attempted to amend the erosion and

sediment control plans in accordance with the Regional Council’s requirements, which incurred considerable expense.

[22] For those reasons counsel submitted that no sentence uplift was justified.

[23] Counsel submitted that a full 25 per cent discount was appropriate for Mr Fugle’s early guilty plea and a further 5 per cent for his good character. She submitted that the alleged lack of cooperation by and prior enforcement action against Mr Fugle should be treated as the absence of a mitigating factor rather than as an aggravating factor. Similarly, counsel submitted that a discount of 25 per cent for an early guilty plea and another 5 per cent discount for lack of previous convictions were appropriate for ALHL.

[24] Counsel submitted that the Crown’s starting point of between $90,000 and

$100,000 for Mr Fugle and between $40,000 and $45,000 for ALHL are excessive and referred to the following cases in contrast:

(a) Waikato Regional Council v Erlon Limited5 where a starting point of $80,000 was adopted for four charges including one each of carrying out soil disturbance activities through the deposition of clay soil on land in a manner that contravened the Waikato Regional Plan;

• (b) Auckland Council v Brett Wallen Contracting Limited6 where a starting point of $45,000 was adopted for three charges involving digging out of a creek bed, placement of pipes in the bed and filling over the pipes and across the site. The starting point recognised the culpability of the defendant in undertaking the works without appropriate regard to the requirements of the Unitary Plan, particularly the requirement for the implementation of erosion and sediment control measures;
• (c) Dunedin City Council v South Sea Trust7 where a starting point of $25,000 was adopted for the earthworks without a resource consent of up to 30,000m3 over 2 years.
  

5 Waikato Regional Council v Erlon Limited [2020] NZDC 248083.

6 Auckland Council v Brett Wallen Contracting Limited [2020] NZDC 13655.

7 Dunedin City Council v South Sea Trust [2016] NZDC 1024.

(d) Auckland Council v Han Sun, Jie Ma and Brother Developments Limited8 where a starting point of $50,000 was adopted for two breaches of abatement notices and sediment discharges into a waterway.

Legal framework

[25] In sentencing an offender, the Court must follow the two-stage approach as set out in Moses v R,9 first identifying the starting point incorporating any aggravating and mitigating features of the offence, and then assessing and applying all aggravating and mitigating factors personal to the offender together with any discount for a guilty plea (calculated as a percentage of the starting point).

[26] All of the purposes and principles in ss 7 and 8 of the Sentencing Act 2002 must be borne in mind, as well as the purpose of the RMA to promote the sustainable management of natural and physical resources. Of particular relevance under the Sentencing Act 2002 are the purposes of accountability, promoting a sense of responsibility, denunciation and deterrence, and the principles relating to the gravity of the offending and the degree of culpability of the offender, the seriousness of the type of offence, the general desirability of consistency with appropriate sentencing levels and the effect of the offending in the community.

[27] When considering the starting point, Thurston v Manawatu-Wanganui Regional Council is the leading decision which provides a comprehensive summary of the applicable principles.10 Briefly, the RMA seeks not only to punish offenders but also to achieve economic and educational goals by imposing penalties which deter potential offenders and encourage environmental responsibility through making offending more costly than compliance. Relevant considerations include the nature of the environment affected, the extent of the damage, the deliberateness of the offence, the attitude of the defendant, the nature, size and wealth of their operations, the extent of efforts to comply with their obligations, remorse, profits realised and any previous relevant offending or evidence of good character.

8 Auckland Council v Han Sun, Jie Ma and Brother Developments Limited [2019] NZDC 22098.

9 Moses v R [2020] NZCA 296 at [45] – [47].

10 HC Palmerston North CRI-2009-454-24, 27 August 2010 at [39] – [66] and [100].

Evaluation

[28] In dealing with both defendants, I note that there are two separate offences: unconsented earthworks and non-compliance with abatement notices.

Unconsented earthworks

[29] Proof of harm caused to the environment is not an element of an offence under s 338 of the RMA. The purpose of controls on earthworks is to manage an activity which can have adverse effects. Contravention of such controls creates an otherwise avoidable risk of adverse effects. The environmental effects of the offending in this case are generic and unidentifiable. While evidence of harm is generally likely to be relevant to an assessment of the gravity of any offending or the culpability of the offender, other aspects of the offending or of the offender’s behaviour can be sufficient to provide an appropriate foundation for a penalty.

[30] I accept the Crown’s argument that there was an element of wilful blindness in this offending. Mr Fugle’s operation was subject to the rules in the One Plan. He was fully aware of the existence of those rules. Resource consents were required to continue earthworks for the subdivision in excess of the 2,500m2 permitted annually in the One Plan without a consent. Failing to extend the terms of the consents he had obtained or apply for fresh consents shows intentional non-compliance with the consenting system. This threatens its integrity, reducing the extent to which the Council can exercise integrated management of the resource. In these circumstances, breaching the One Plan rules and operating without a resource consent are serious aggravating factors.

[31] The argument that Mr Fugle’s understanding was based on his surveyor’s expert advice that the stockpile area did not fall within the calculation of land disturbance is unacceptable. Mr Fugle was advised multiple times by a report sent to him and by abatement notices that his operation was subject to the One Plan rules. He had also been told that there were insufficient sediment and erosion controls, but he chose to ignore those warnings. Mr Fugle argued that he did not seek an extension of the consent as he believed that the work was nearly completed, but over a year was

needed to complete the subdivision. In any event an extension should have been sought regardless of how much work was left to do.

[32] In all the circumstances, I consider Mr Fugle was at least highly careless to the point of acting recklessly in his approach to the works and to the need for environmental controls. As an experienced developer he should have known better and shown a higher level of care given the clear potential for adverse effects on the environment.

[33] I am required to take into account the general desirability of consistency with appropriate sentence levels in respect of similar offending. Having considered the starting points adopted in prior cases I conclude that he should be sentenced at a relatively high figure, comparable to the starting point in Gisborne District Council v AF Thompson Contracting Ltd. I therefore adopt a starting point of $90,000.

[34] I accept the submission that there should be a discount of 20 per cent in recognition of an early, but not the earliest, guilty plea.

Non-compliance with abatement notices

[35] While acknowledging that there was no evidence of actual harm to the environment from the breach of the abatement notices, I agree with the Crown that a key aggravating factor in relation to ALHL’s offending is that no efforts were made to comply with the abatement notice for over a year. Failing to comply with an abatement notice is in itself a challenge to the regulatory framework under the RMA and requires a sentence which emphasises deterring people from that offending.

[36] I consider an appropriate starting point is $40,000, which is identical to the starting point adopted in Lane.

[37] I will also allow a discount of 25 per cent in recognition of an early guilty plea and a further 5 per cent for no previous convictions of ALHL.

Sentence

[38] I convict Mr Fugle and sentence him to pay a fine of $72,000.

[39] I convict ALHL and sentence it to pay a fine of $28,000.

[40] I order each defendant to pay $113 as solicitor’s fee and $130 as court costs.

[41] As required under s 342 of the RMA, I direct that 90 per cent of the fines are to be paid to the Manawatu-Wanganui Regional Council as the local authority which commenced these prosecutions.

Judge D A Kirkpatrick

District Court Judge | Kaiwhakawā o te Kōti ā-Rohe

Date of authentication | Rā motuhēhēnga: 23 February 2024