Friday, March 29, 2024

Lack of maintenance plan proves costly

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A failure to have a maintenance plan for an old travelling irrigator has resulted in fines and costs totalling more than $50,000 being imposed on a farm company and its manager following an effluent discharge. Glenholme Farms owned a farm at Nukuhou. In March 2006, Bay of Plenty Regional Council issued a resource consent authorising the company to discharge untreated dairy effluent to pasture through a travelling irrigator pumping from a pond. The resource consent was subject to conditions, one of which required Glenholme to ensure discharged effluent did not enter any drain or natural watercourse, either directly or by overland flow. The travelling irrigator used on the property was about 20 years old and had worked well for most of that time, even though it was not maintained regularly. In about September 2010, the irrigator suffered a mechanical failure and was given an overhaul. The director and farm manager, Alexander Atkinson, thought the reason for the breakdown was unusual and the work done on the irrigator would mean the problem was unlikely to recur. However, on November 4, 2010, a council officer undertook a random inspection of the farm and found a large amount of effluent ponding near the travelling irrigator. The effluent had poured through a shallow channel, over a small embankment and into a drain.
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Atkinson had planned to use the irrigator in Paddock 26 on November 3 and 4 and on November 3 had inspected it in that location because he was aware that Paddock 26 was susceptible to ponding from irrigation and that spreading in that area was risky.

The irrigator started work about two hours before the council officer arrived on November 4 and subsequently stalled. Effluent was discharged and then ponded and flowed through a farm drain into a tributary of Nukuhou River, several hundred metres beyond the farm boundary. Water testing revealed a significant amount of effluent in the waterway.

At the time the irrigator stalled it could not be seen directly by any of the farm workers. Atkinson had viewed it from a distance several times that day and had seen it working but he didn’t become aware of the stalling and discharge until later. As soon as he realised what had happened, he and staff members closed 80m of the drain and pumped the liquid elsewhere, to be disposed of by tanker. Those actions were in accordance with a council direction and minimised the adverse effect of the discharge on the tributary.

Atkinson and Glenholme Farms were both charged with unlawfully discharging untreated dairy effluent into a drain. Following a defended hearing in Tauranga District Court in November 2011, both parties were convicted. Atkinson was fined $17,000 and Glenholme was fined $36,000. Both were ordered to pay court and solicitors’ costs, with 90% of the fines to be paid to the council.

Judge Smith concluded that the failure of irrigators was well attested to in prosecutions before the court and constant vigilance was required if the irrigator did not have safety controls. In the absence of a management plan for monitoring and detecting problems with the irrigator, ponding and overland flow was reasonably foreseeable.
In sentencing Glenholme and Atkinson, Judge Smith regarded “general deterrence” as the primary purpose of sentencing for offending involving irrigators in the Bay of Plenty region. After assessing the nature of the environment and the extent of the damage, he took a starting point of $45,000 for the fine, apportioning $30,000 to the company and $15,000 to Atkinson.

An uplift of 20% was applied for a previous conviction for an offence under the act, committed by the company at a time when Atkinson was involved in its management. A credit of 5% was then given for remorse, resulting in final fines figures of $17,000 for Atkinson and $36,000 for Glenholme.

In addition, Judge Smith made two enforcement orders, directing that a failsafe device and an alarm system were to be fitted and an effluent management plan prepared by a suitably qualified person was to be provided to the council.

Glenholme and Atkinson appealed to the High Court against their convictions and sentences. In the High Court, Justice Heath noted that the offence of discharging a contaminant was created by sections 15(1) and 338(1) of the Resource Management Act 1991. The penalty for the offence for a person was a maximum jail term of two years or a maximum fine of $300,000, while for a company the maximum fine was $600,000.

The judge also observed that the offence was one of “strict liability”, meaning legal liability applied without the requirement for any intention or carelessness in relation to the offence. The prosecution and defence both accepted that the elements of the offence under section 15 had been proved. The issue, accordingly, was whether the statutory defence under section 341 had been made out.

That section sets out a number of defences, including the event to which a prosecution relates being beyond the control of the defendant by reason of “natural disaster, mechanical failure, or sabotage”. For the defence to apply, the action or event must not reasonably have been foreseen by the defendant and the impact of the event must have been adequately mitigated or remedied by the defendant after it occurred.

The defence must be raised by a defendant giving written notice to the prosecutor within seven days after the service of a summons, or within such further time as the court allows. The notice must state that the defendant intends to rely on the statutory defence and must spell out the primary facts on which the defence is based. The notices were not provided in this case but Justice Heath said he would deal with the appeals as though they had been issued.

The lawyer for Glenholme and Atkinson argued that Judge Smith in the District Court had been wrong to decide that the statutory defence had not been made out. Justice Heath said the sole issue in the appeal was whether Glenholme and Atkinson had proved, on a balance of probabilities, the elements of the section 341(2)(b) defence.
Judge Smith held they had not because the discharge was not beyond the control of the defendants and could reasonably have been foreseen or provided for.

However, the lawyer for Glenholme and Mr Atkinson said Judge Smith had erred in failing to consider whether the specific mechanical failure that caused the discharge “could not reasonably have been foreseen or been provided against” by the two defendants.

In addition, the lawyer submitted that the penalties imposed were manifestly excessive, having regard to the mitigating factors identified by the District Court judge. He questioned whether the uplift applied for the previous offending was appropriate.

Justice Heath noted there was no other decision from the Court of Appeal or High Court to act as a precedent. The points raised were distinctly arguable and of some importance to territorial authorities.

The judge said section 341(2)(b)(i) focused on the event to which the prosecution related.

“The prosecution relates to the entry of the contaminant into a drain or natural waterway, contrary to the terms of the consent. Mechanical failure, of itself, is not an event giving rise to the prosecution, even though the relevant event might be caused by it. The possibility of an unlawful discharge into a drain or waterway was reasonably foreseeable. The fact that the equipment was over 20 years old was indicative of a need for a maintenance plan that included means of monitoring and detecting problems with the machine, to avoid mechanical problems that might cause a discharge.”

Justice Heath said the fact that an unusual problem had emerged two months earlier should have indicated a greater need for care to ensure the fault did not recur. The age of the equipment and the earlier fault were indicators that a “relevant event” in the form of an unlawful discharge caused by mechanical failure was reasonably foreseeable and could have been prevented by an appropriate maintenance plan.

For those reasons, Justice Heath held that Glenholme and Atkinson had not discharged the onus of proving the elements of the defence. The appeals against conviction were accordingly dismissed.

In relation to the appeals against sentence, Justice Heath said the fine of $36,000 imposed on Glenholme represented 6% of the maximum penalty of $600,000, while Atkinson’s fine equated to about 5.7% of the available maximum penalty.

“Viewed in that context, it is difficult to regard either sentence as manifestly excessive. An end sentence representing between 5-6% of available maximum penalties took account of all relevant mitigating factors: the relatively minor damage; the negligent (as opposed to deliberate) nature of the pollution; the degree of cooperation with the council in responding to what occurred and (taking the best position from their perspective) Glenholme’s and Atkinson’s ultimate acceptance of responsibility for what occurred, as evidence by the lack of opposition to the enforcement orders that were made.”

The appeals against sentence were accordingly also dismissed.

  • Last month Legal Briefs discussed court proceedings relating to two family farms near Martinborough. In September last year the High Court ordered that the farms be put up for sale after the two brothers failed to reach agreement on their future. On December 5 the farms were auctioned in Greytown. Alastair Jaspers successfully bid $3.1m for the 113ha farm known as The Cutting. Malcolm Jaspers bid for Tawaha, but lost to a dairy farming syndicate, which paid $5.6m for the 297ha property.

The judgment discussed in this case and others can be downloaded free from the website Judicial Decisions Online www.justice.govt.nz/jdo.

Glenholme Farms Ltd and Anor vs Bay of Plenty Regional Council(High Court, Tauranga, Justice Heath, November 9, 2012, CRI 2012-470-7 and 8).

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