BURNS V BAY OF PLENTY REGIONAL COUNCIL HC TAU CRI-2009-470-16 [2009] NZHC 707 (16 June 2009)

IN THE HIGH COURT OF NEW ZEALAND
TAURANGA REGISTRY
                                                                  CRI-2009-470-16



                               JOHN PATRICK BURNS
                                     Appellant



                         
               v



                    BAY OF PLENTY REGIONAL COUNCIL
                                Respondent



Hearing:   
   16 June 2009
               (Heard at ROTORUA)

Appearances: Appellant in person
             Mr A A Hopkinson for Respondent

Judgment:      16 June 2009


                        (ORAL) JUDGMENT OF LANG J
                           [on appeal against sentence]




Solicitors:
Cooney Lees Morgan, Tauranga
Copy to:
Mr J P Burns, Te Kuiti




BURNS V BAY OF PLENTY REGIONAL COUNCIL HC TAU CRI-2009-470-16
16 June 2009
[1]    Mr Burns pleaded guilty in the District Court at Tauranga to three charges
laid under s 338(1)(a) of the Resource
Management Act 1991. All of the charges
related to a project in which Mr Burns reclaimed an area of foreshore seabed outside
a property
owned by his sister and her family at Hunter's Creek on Matakana Island.
The offending occurred between 1 December 2006 and 8 January
2008.


[2]    The maximum penalty in respect to each of the charges of which Mr Burns
pleaded guilty is a fine not exceeding $200,000,
or a term of imprisonment not
exceeding two years.


[3]    On 13 November 2008 Her Honour Judge Harland fined Mr Burns a total of
$7,000 and directed that 90 per cent of the fines were to be paid to the informant
Council. She also imposed Court costs of $130
and a solicitor's fee of $113 in
respect of each charge. Finally, the Judge made an order requiring Mr Burns to pay
the Council the
sum of $6,000 in respect of costs that it had incurred in investigating
the events that led to the charges.


[4]    It is the latter
order that has led to the present appeal. Mr Burns does not
argue that the fines totalling $7,000 were manifestly excessive.    
     He contends,
however, that when the order for costs is added to the equation, the total penalty that
the Judge imposed upon
him was manifestly excessive.


The issue


[5]    The issue on the appeal is really one of principle. For that reason I do not
propose
to outline the facts of the matter further than I have already done. The issue
is the extent to which, if at all, a sentencing Court
should take into account, when
imposing a fine for offending of this type, the fact that the Court is also directing the
defendant
to contribute towards the informant's investigation costs.


[6]    This is a matter of some importance, because the issue arises
in many
prosecutions brought by local authorities pursuant to the provisions of the Resource
Management Act 1991. It arises because
s 339(5) of the Act provides as follows:
       (5)     Where a person is convicted of an offence against section 338, the
    
          Court may, instead of or in addition to imposing a fine or a term of
               imprisonment, make any or all of the
orders specified in section 314.

[7]    Section 314 relates to the scope of enforcement orders and the relevant
provisions of that
section are as follows:

       (1)     An enforcement order is an order made under section 319 by the
               [Environment
Court] that may do any one or more of the following:

             ...

               (d)   Require a person to pay money to or
reimburse any other person
                     for any [actual and] reasonable costs and expenses which that
                  
  other person has incurred or is likely to incur in avoiding,
                     remedying, or mitigating any adverse effect [on
the
                     environment, where the person against whom the order is
                     sought] fails to comply with--

                     (i)     An order under any other paragraph of this subsection; or

                     (ii)    An abatement
notice; or

                     (iii)   A rule in a plan [or a proposed plan] or a resource
                             consent; or

                     (iv) 
  Any of that person's other obligations under this Act:

             ...

             (2) For the purposes of subsection (1)(d),
actual and reasonable costs
                 include the costs of investigation, supervision, and monitoring of the
            
    adverse effect on the environment, and the costs of any actions
                 required to avoid, remedy, or mitigate the adverse
effect.

[8]    The combined effect of s 339(5) and s 314 is that, when sentencing a
defendant on a charge brought under s 338 of
the Act, the Court may require the
defendant to reimburse the informant for certain costs that the informant has
incurred. Those
costs must relate to investigating and remedying, or mitigating, any
adverse effect on the environment arising out of the events
that have given rise to the
charge. An order requiring the defendant to make such a payment may be made
instead of, or in addition
to, the fine (or sentence of imprisonment) that the Court
imposes in respect of the charge.


[9]    For the purposes of the appeal
counsel for the respondent helpfully provided
me with a large number of cases decided by Judges of the Environment Court in this
area. I spent some time during the hearing traversing these with counsel in order to
ascertain whether a coherent pattern has emerged
regarding the way in which the
Environment Court has applied s 339(5). That exercise leads me to the conclusion
that a number of
broad propositions can be extracted from the authorities.               In
particular, Judges have often taken the amount of any
award of costs into account
when fixing the fine to be imposed on a defendant following a successful
prosecution. That is not, however,
always the case. I propose to illustrate this point
by way of several examples.


The authorities


[10]   Before I do so, I record
that perhaps the clearest statements of principle in
this context are to be found in the decision of His Honour Judge Whiting in
Auckland Regional Council v Haines House Removals Limited AK DC
CRN9044013674-5 11 August 2000. In discussing the extent to which
an award of
costs can be taken into account in setting the level of fine the Judge said:

       [69]     It is well settled that
the Court must take into account any orders it
       may make relating to reparation and/or costs in setting the level of any fine
       (see Machinery Movers v Kiwi Drilling). Indeed this was the principle that
       caused Justice Randerson to remit Interclean
back to the District Court. He
       said at page 14 paragraph 39:

               Because there was a clear relationship between
the disputed
               costs and the level of fines imposed, this matter is remitted to
               the District Court for
determination on the issue whether the
               fines should be increased as a result of this ruling.

       [70]    The reason
for taking account of any reparation paid or costs
       imposed in setting the fine, is to ensure that both fines and costs imposed
add
       up to what globally is an appropriate penalty in total. The Court is therefore
       required to assess what is an appropriate
penalty in total and then have
       regard to any award made by way of costs before imposing a fine. It is not a
       strict
mathematical exercise.

       [71]     In determining the overall appropriate global penalty the Court is
       required to take
account of numerous factors affecting such matters as: the
       nature of the offence; the circumstances of the offence; the circumstances
of
       the offender; and the circumstances of the victim. The limits of the Court's
       jurisdiction are constrained by the
offence in respect of which the offender
       has pleaded or is found guilty and by the maximum penalty prescribed by
       law.
There are further limitations such as: decisions on questions of law by
       superior courts; judgments of superior courts which lay down rules of
       practice affecting
the exercise of sentencing discretion; and guidelines
       judgment particularly from superior courts.
[11]   I respectfully agree
with these statements of principle.         In particular, I
consider that it is important for a sentencing Court to reach a decision
regarding the
appropriate global penalty before taking into account mitigating factors. Once those
are taken into account it will
often be appropriate to apportion the end penalty
between a fine and an award of costs. Any other approach runs the risk of imposing
an end penalty that is greater than that which the circumstances of the offending
would justify. Some of the authorities adopt such
an approach, but others do not.


[12]   In Northland Regional Council v United Carriers Ltd WHA DC
CRN04088500926 12 October 2005,
for example, the prosecuting authority had
incurred costs of $1,000 in investigating the incident that gave rise to the charge
upon
which the defendant was ultimately convicted. The Judge fined the defendant
$10,000 and directed that 90 per cent of that sum was
to be paid to the informant
pursuant to s 5. The Judge did not make any separate order in relation to the costs of
investigation.
Instead he said:

       I consider that the Regional Council will be adequately reimbursed for its
       costs in connection with
investigation and prosecution by receiving the 90%
       proceeds of the fine.

[13]   In some cases, however, the costs that the
Court imposes on the defendant
have not, overtly at least, been taken into account when setting the level of the fine to
be imposed.
By way of example, in Bay of Plenty Regional Council v Dimmock &
Ors DC TAU CRN07079500174 ­ 204 14 December 2007 the Judge adopted
a fine
of $20,000 as a starting point. After applying a discount to reflect a guilty plea, he
imposed a fine of $12,000 on the defendant
and directed that 90 per cent of the fine
was to be paid to the Council. In addition, the defendant was required to pay
ecological
assessment costs of $1,758.94.


[14]   In other cases the Court has clearly apportioned the global penalty between a
fine and an
order that costs be reimbursed. In Southland Regional Council v Egan
DC INV CRI-2008-25-2736 24 September 2008 the Judge accepted
that the
appropriate starting point was a fine of $10,000. The Council sought the sum of
$2,309.22 for investigation costs and the
Judge accepted that those should be taken
into account in setting the final fine. After taking into account a discount of 30 per
cent to reflect the defendant's guilty plea, the Judge concluded that "a fair and
appropriate outcome" was a fine of $5,000, with
90 per cent of that sum being paid
to the informant. In addition, the defendant was ordered to pay the investigation
costs of $2,309.22.


[15]   A similar approach was taken in Waitakere City Council v Poulton DC
WAIT CRI-2007090-9589 4 April 2008. In that case the
Judge had adopted a
starting point of a fine of $9,000. He also indicated that he proposed to award the
sum of $4,000 in costs to
the Council. He then said at [39]:

       ... I will treat that as coming off the total penalty (as it were) dollar-for-
      
dollar, so that having ordered costs of $4,000 there is a balance penalty of
       $5,000.

He then imposed a fine of $5,000.


[16]   Similarly, in Northland Regional Council v Tompkins DC WHA
CRN1027004002 11 December 2001 the Judge concluded that the total
penalty that
was appropriate was "something in the order of $17,000." He then imposed fines of
$7,500 on the two informations to
which the defendant had pleaded guilty. On top
of that he directed the defendant to pay the costs of the informant, thereby making
up
the balance of the $17,000 penalty that he considered to be appropriate.


[17]   Similarly,     in   Northland    Regional  
  Council     v   Kraus     DC       WHA
CRI1027003997 12 December 2001 the Judge concluded that an appropriate starting
point was a penalty of $25,000. He imposed that by directing the
defendant to pay a
fine of $22,000 together with investigation costs of $2,466 and Court costs and
solicitor's costs totalling $256.


[18]   This review suggests that sentencing courts have generally, but not always,
assessed the appropriate global penalty that
the case in question warrants. They have
also generally had regard to the quantum of any award of costs when fixing the level
of
fine to be imposed. Having said that, I do not criticise the outcome achieved in
cases where that approach has not been adopted.
It seems to me that in those cases
the costs that have been awarded have been of a relatively low amount. For that
reason the award
of costs has not made a significant difference to the ultimate
outcome.
[19]   I consider that the position is somewhat different,
however, in cases where
there is to be a significant award of costs. In such cases I think it is desirable for
sentencing courts
to explain the basis upon which they propose to impose a fine
and/or make an award of costs. This enables the parties to understand
the way in
which the sentence has been constructed. It also brings transparency to the process
from the perspective of an appellate
Court.


[20]   With these principles in mind, I propose to return to the approach that the
Judge adopted in the present case.


The present case


[21]   The Judge gave careful consideration to the issue of the appropriate starting
point. Counsel for the informant
had submitted that an appropriate starting point
was $20,000. He referred the Judge to the Dimmock case, in which a fine at that
level was the agreed starting point. Counsel for Mr Burns, on the other hand,
submitted that a starting point of a fine in the sum
of $10,000 was appropriate.


[22]   The Judge considered that the answer to this question lay at the mid-point of
the two competing
submissions.         She considered that Dimmock involved more
serious offending than that which Mr Burns had committed. It is clear
that the Judge
considered that the cases of Canterbury Regional Council v Cribb DC CHCH CRI-
2007-061-084 4 April 2008 and Waitakere
City Council v Poulton were the most
relevant authorities, because they involved culpability on the part of the defendant
that was
broadly similar to that of Mr Burns. In both of those cases the sentencing
court had adopted a starting point of a fine in the sum
of $15,000.


[23]   The Judge expressed her conclusion in relation to the issue of starting point
as follows:

       [20]    Bearing
in mind all of the matters to which I have referred, in my
       view a starting point of $15,000 is the appropriate one, which
takes into
       account the totality of the offending. I agree that the culpability of the
       defendant in this case is in
the medium range and fortunately the nature of
       the environment affected was such that it has been able to recover relatively
       promptly.
[24]   The Judge then reduced the starting point that she had selected by 30 per cent
to reflect the early guilty
pleas. She also deducted a further 20 per cent to reflect the
prompt remediation steps that Mr Burns had taken, the co-operation
that he had
given to the Council and his previous good character. The Judge's assessment was
that an end fine of $7,000 was appropriate.
She imposed that by apportioning the
fines between the three informations to which Mr Burns had pleaded guilty.


[25]   The Judge
dealt with the issue of costs in the last paragraph of the judgment
when she said:

       [23]     There are then the costs of compliance.
They are very real and are
       part of the actual costs that the Council have needed to incur to investigate
       this matter.
I have been helpfully provided with a schedule to the summary
       of facts which sets out the costs. They amount to $6,180.22.
I think that it is
       appropriate for the defendant to pay costs and I assess those in round terms
       to be $6,000. In respect of the information, which is CRN 08070501732,
the
       Council's costs of $6,000, will also be ordered to be paid.

Decision


[26]   It will be clear from what I have said
that the Judge dealt with the issue of the
fine and the award of costs separately. She did not, expressly in any event, come to
any
conclusion regarding the total penalty that was appropriate in the case. She did,
however, say that a starting point of $15,000 was
appropriate to take into account the
totality of the offending.


[27]   The approach that the Judge adopted leaves me in a degree
of difficulty. I am
left in a state of uncertainty regarding the extent to which, when fixing the level of
fine to be imposed upon
Mr Burns, she took into account the fact that she was also
going to require him to pay a significant sum by way of costs. The fact
that the
award was made at the very end of her decision, coupled with the lack of any prior
reference to the appropriate end penalty,
leaves me with a concern that she may not
have taken that factor into account.


[28]   I say this because the Judge rejected counsel
for the informant's submission
that the circumstances of the case were broadly comparable to those in Dimmock.
As I have already
indicated at [22], she considered that the circumstances in
Dimmock were more serious than those in the present case. The net result,
however,
is that the principal defendant in Dimmock received an end penalty that is effectively
the same as that which the Judge
imposed on Mr Burns.


[29]   In those circumstances I consider that the ultimate penalty that the Judge
imposed on Mr Burns can
properly be said to be manifestly excessive. Although the
Judge was not required as a matter of principle to reduce the fine on a
dollar-for-
dollar basis as has been done in some other cases, nevertheless I consider that the
award of costs needed to be taken
into account in a realistic manner when assessing
the fine that was to be imposed. That was particularly so given the fact that the
informant was seeking an award of costs that was nearly as large as the end fine that
the Judge considered to be appropriate to reflect
the totality of Mr Burns' offending.
Unless the award of costs was taken into account in a meaningful way, the end result
was a monetary
penalty that was almost 100 per cent greater than the fine that the
Judge considered appropriate.


[30]   For this reason I am satisfied
that the appeal should be allowed. The issue
that I need to determine is the extent to which the orders that the Judge made should
be varied. This is not necessarily a mathematical exercise, because it is possible that
the Judge may have taken the award of costs
into account to a limited extent when
setting the level of the fine. I say this because she gave Mr Burns a very large
discount from
the starting point that she had adopted. In addition, she reduced the
starting point by slightly more than the 50 per cent figure
that she indicated was
appropriate. Those matters suggest that she may have been cognisant of the fact that
she was about to order
Mr Burns to pay a significant sum by way of costs.


[31]   I therefore need to vary the sentence so as to reflect the principle
that the fine
needed to take into account the award of costs. At the same time I need to guard
against an approach that proceeds
on the basis that the Judge had no regard at all to
the award of costs.
Result


[32]     I consider that justice will be done in
the present case by allowing the appeal
and quashing the fines that the Judge imposed on Mr Burns. In their place I propose
to impose
fines totalling $3,000. Those fines will be applied in equal measure to the
three informations to which he pleaded guilty. In other
words, Mr Burns will be
fined $1,000 on each of the charges to which he pleaded guilty.


[33]     I leave intact, however, the Judge's
award of costs to the informant in the
sum of $6,000. I also leave intact the Court costs and solicitor's fees that the Judge
imposed. Finally, I direct that 90 per
cent of the fines is to be paid to the informant.




Lang J