Resource Management Act 1991, ss 338-339 – distinction in fine levels between companies and individuals – relevance of prosecutor’s distinction in fine levels – global fine then apportionment required? – is the overall penalty too severe?
Walling v Waikato Regional Council [2023] NZHC 3437 per Downs J.
Near Wharepūhunga, Cazjal Farms Ltd owns a dairy farm that has had a troubled history with regulatory compliance. In 2016, an abatement notice was issued in relation to its operation. In 2017, Cazjal and a farm manager were convicted of effluent-related offending. In 2019, a formal warning was issued in relation to the farm’s operation and a manager convicted of effluent-related offending. In 2020, another formal warning was issued.
Between June 2021 and November 2021, Waikato Regional Council officers attended the farm on three occasions and found dairy effluent being discharged into the Matapara stream. The stream flows into the Pūniu River, which joins the Waipā River, which then flows into the Waikato river. There are four marae along the Pūniu river.
Cazjal and its director, John Walling, pleaded guilty to two representative charges under s 338 of the Resource Management Act 1991: one of unlawfully discharging effluent where it may enter water, and a second of breaching an abatement notice in relation to effluent.
The maximum penalty for these offences was two years’ imprisonment or a $300,000 fine (Walling) or a $600,000 fine (Cazjal).
Chief Environment Court judge David Kirkpatrick adopted the same starting point for a $100,000 fine for both Cazjal and Walling. The prosecuting council had suggested a much higher starting point for Cazjal than for Walling.
The final sentence imposed was a $96,000 fine on both Cazjal and Walling.
Walling appealed, contending that his fine was manifestly excessive. Cazjal did not appeal.
Applicable principles: Resource Management Act 1991, ss 338, 339 – does the Act contemplate a distinction in fine levels between companies and individuals? – relevance of prosecutor’s distinction in fine levels – should the judge have settled on global fine then apportioned it? – is the overall penalty too severe?
Held: Appeal is dismissed. The Act does not signal or mandate that an individual should receive a smaller fine than a company.
A judge is not bound by the parties’ submissions on penalty. The suggestion that the judge should have settled on a global fine, then apportioned it between Cazjal and Walling, is contrary to principle.
The overall penalty was not too severe. The discharges did enter water, the environmental effects were notable, and the affected waterways are significant for recreation, neighbours and iwi. Walling knew of the risks of managing farm effluent from earlier offending by Cazjal. It is important that fines in this context are sufficiently large to avoid pollution becoming a cost of doing business.
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