NORTHLAKE INVESTMENTS LIMITED v OTAGO REGIONAL COUNCIL [2022] NZCA 129 [12 April 2022]

NORTHLAKE INVESTMENTS LIMITED v OTAGO REGIONAL COUNCIL [2022] NZCA 129[12 April 2022]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA331/2020[2022] NZCA 129BETWEEN NORTHLAKE INVESTMENTS LIMITEDAppellantAND OTAGO REGIONAL COUNCILRespondentHearing: 13 October 2021Court: Cooper, Brown and Goddard JJCounsel: A F Pilditch QC for AppellantL J Taylor QC and N M Laws for RespondentJudgment: 12 April 2022 at 11.30 amJUDGMENT OF THE COURTThe appeal is dismissed.____________________________________________________________________REASONS OF THE COURT(Given by Brown J)Introduction[1] Substantial earthworks on the appellant's (Northlake's) subdivisiondevelopment near Wanaka had been largely completed, with most of the land topsoiledbut unvegetated, when heavy rainfall on 17 and 18 August 2017 caused flooding at thesite. Sediment escaped, eventually reaching the Clutha River more than a kilometreaway.[2] Northlake was charged under the Resource Management Act 1991 (the RMA)with discharging contaminants onto land in circumstances which might have resultedin their entering water, namely the Clutha River. Northlake was convicted in theDistrict Court1 and its appeal to the High Court was dismissed.2 It appeals pursuantto leave granted by this Court.3 The focus of Northlake's argument concerns theliability under the RMA of a developer who contracts out construction works and relieson expert advice.Statutory scheme[3] The purpose of the RMA is to promote the sustainable management of naturaland physical resources.4 Among the duties and restrictions in pt 3 of the Act, s 15relevantly provides:15 Discharge of contaminants into environment(1) No person may discharge any—(b) contaminant onto or into land in circumstances which mayresult in that contaminant (or any other contaminantemanating as a result of natural processes from thatcontaminant) entering water; orunless the discharge is expressly allowed by a national environmentalstandard or other regulations, a rule in a regional plan as well as a rulein a proposed regional plan for the same region (if there is one), or aresource consent.[4] The RMA definition of the verb "discharge" includes to emit, deposit or allowto escape.5 As this Court explained in McKnight v NZ Biogas Industries Ltd, theextension of the definition of discharge to allowing escape suggests something broader1 Otago Regional Council v Northlake Investments Ltd [2019] NZDC 11710 [District Courtjudgment].2 Northlake Investments Ltd v Otago Regional Council [2020] NZHC 1144 [High Court judgment].3 Northlake Investments Ltd v Otago Regional Council [2020] NZCA 567 [Leave judgment].4 Section 5.5 Section 2(1).than direct action by the person.6 The Court recognised that a discharge may be eitheractive or passive, stating:7We find no straining of language in saying that a person allows a contaminantto escape who fails to take the precautions that a reasonable prudent person inthe position would take to prevent that escape.[5] A contravention of s 15 of the RMA is rendered an offence by virtue of s 338which relevantly provides:338 Offence against this Act(1) Every person commits an offence against this Act who contravenes,or permits a contravention of, any of the following:(a) sections 9, 11, 12, 13, 14 and 15 (which impose duties andrestrictions in relation to land, subdivision, the coastal marinearea, the beds of certain rivers and lakes, water, anddischarges of contaminants):[6] With reference to proof of a contravention of s 15, s 341 provides:341 Strict liability and defences(1) In any prosecution for an offence of contravening or permitting acontravention of any of sections 9, 11, 12, 13, 14, and 15, it is notnecessary to prove that the defendant intended to commit the offence.(2) Subject to subsection (3), it is a defence to prosecution of the kindreferred to in subsection (1), if the defendant proves—(a) that—(i) the action or event to which the prosecution relateswas necessary for the purposes of saving or protectinglife or health, or preventing serious damage toproperty or avoiding an actual or likely adverse effecton the environment; and(ii) the conduct of the defendant was reasonable in thecircumstances; and(iii) the effects of the action or event were adequatelymitigated or remedied by the defendant after itoccurred; or6 McKnight v NZ Biogas Industries Ltd [1994] 2 NZLR 664 (CA) at 669.7 At 672.(b) that the action or event to which the prosecution relates wasdue to an event beyond the control of the defendant, includingnatural disaster, mechanical failure, or sabotage, and in eachcase—(i) the action or event could not reasonably have beenforeseen or been provided against by the defendant;and(ii) the effects of the action or event were adequatelymitigated or remedied by the defendant after itoccurred.(3) Except with the leave of the court, subsection (2) does not applyunless, within 7 days after the service of the summons or within suchfurther time as the court may allow, the defendant delivers to theprosecutor a written notice—(a) stating that he or she intends to rely on subsection (2); and(b) specifying the facts that support his or her reliance onsubsection (2).[7] In the course of its analysis of these provisions, this Court in Biogas observed:8Section 15(1) contemplates discharge by a person. The definition extends themeaning to include emit and allow to escape. The former suggests that ittherefore encompasses the consequence of activities carried out by a person— it would be absurd to suggest that it is confined to such contaminants as arepersonally emitted. Moreover the extension to allowing escape suggestssomething broader than direct action by the person.The discharging to which the section relates must also extend to activities towhich the statutory defences can have application. They extend to eventsgiving rise to discharge beyond the control of the defendant including naturaldisaster, mechanical failure and sabotage and which could not reasonably havebeen foreseen or been provided against.A person may discharge contaminant within s 15(1) though not intending todo so. That follows from s 341(1) which says that it is not necessary forintention to be proved. Any requirement that the person foresee, or be awareof, the discharge would not be consistent with the available defences. It isdifficult therefore to see room for any mental element in the act of discharge.Plainly however a person could not be said to discharge the contaminantunless there is a causal connection between the person and the discharge.Even this causative element, however, is to be considered in light of thestatutory defence available of proof that the offence was due to an eventbeyond the control of the defendant that could not reasonably have beenforeseen or been provided against.8 McKnight v NZ Biogas Industries Ltd, above n 6, at 669.[8] The Court referred to Lord Wilberforce's discussion of the term "causes" inAlphacell Ltd v Woodward:9In my opinion, "causing" here must be given a common sense meaning and Ideprecate the introduction of refinements, such as causa causans, effectivecause or novus actus. There may be difficulties where acts of third persons ornatural forces are concerned but I find the present case comparatively simple.The appellants abstract water, pass it through their works where it becomespolluted, conduct it to a settling tank communicating directly with the stream,into which the polluted water will inevitably overflow if the level rises overthe overflow point. They plan, however, to recycle the water by pumping itback from the settling tank into their works: if the pumps work properly thiswill happen and the level in the tank will remain below the overflow point. Itdid not happen on the relevant occasion due to some failure in the pumps.In my opinion, this is a clear case of causing the polluted water to enter thestream. The whole complex operation which might lead to this result was anoperation deliberately conducted by the appellants and I fail to see how adefect in one stage of it, even if we must assume that this happened withouttheir negligence, can enable them to say they did not cause the pollution. Inmy opinion, complication of this case by infusion of the concept of mens rea,and its exceptions, is unnecessary and undesirable.[9] With reference to that analysis this Court in Biogas concluded:10It is difficult to postulate a causative link between the person and the dischargeappropriate for s 15(1) any different from that. This means that because of itscontext the word discharge is to be construed as extending to cause todischarge. That accords with the natural and ordinary meaning of dischargeas engaging in an activity which results in the emission or discharge ofcontaminant. It is consistent with the policy of the provisions to preventcontamination of waterways.[10] Notwithstanding the fact that Northlake was charged directly withcontravention of s 15 under s 338, its appeal focuses to a significant degree on anothersection, namely s 340, which addresses the liability of principals for the acts of agents:340 Liability of principal for acts of agents(1) Where an offence is committed against this Act—(a) by any person acting as the agent (including any contractor)or employee of another person, that other person shall,without prejudice to the liability of the first-mentionedperson, be liable under this Act in the same manner and to the9 Alphacell Ltd v Woodward [1972] AC 824 (HL) at 834–835 which concerned the meaning of thephrase "if he causes or knowingly permits to enter a stream any poisonous, noxious or pollutingmatter" in s 2(1)(a) of the Rivers (Prevention of Pollution) Act 1951 (UK).10 McKnight v NZ Biogas Industries Ltd, above n 6, at 670.same extent as if he, she, or it had personally committed theoffence; or(2) Despite anything in subsection (1), if proceedings are brought underthat subsection, it is a good defence if—(a) the defendant proves,—(ii) in the case of a person other than a natural person,—(A) that neither the directors (if any) nor anyperson involved in the management of thedefendant knew, or could reasonably beexpected to have known, that the offence wasto be or was being committed; or(B) that the defendant took all reasonable steps toprevent the commission of the offence; and(b) the defendant proves that the defendant took all reasonablesteps to remedy any effects of the act or omission giving riseto the offence.[11] As this Court observed in Biogas:11A company therefore may commit the offence by doing* the prohibited act(a person is defined to include a body corporate), by permitting thecontravention or as principal or employer of the person or persons whoactually commit the offence.In that case, as in the instant appeal, the company was charged directly, not vicariously,with the prohibited act of discharging a contaminant.[12] In seeking leave to bring a second appeal, Northlake emphasised that inundertaking its development it had obtained and acted upon advice from experts, afactor which it claimed distinguished its case from Biogas. Northlake's broadcontention was that a defendant who reasonably relies on such expert advice cannotbe liable for a contravention of s 15.11 McKnight v NZ Biogas Industries Ltd, above n 6, at 668.* Actively or passively.[13] This proposition, together with the potential application of s 340, was reflectedin the following three issues identified in the judgment granting leave to appeal:12(a) Is a developer liable under s 15, as an active or passive discharger, ifit acted reasonably in engaging expert advice and in relying on it?(b) If a developer is relying on expert advice to address the risk ofdischarge, does the developer's liability potentially arise under ss 15or 340 or both?(c) Did Northlake act reasonably in engaging expert advice and in relyingon it?Factual backgroundNorthlake's property[14] Northlake owns a property at Aubrey Road near Wanaka comprising108 hectares in total which is contained in the Northlake Special Zone of theQueenstown Lakes District Council (QLDC) operative district plan. As Judge Dwyerin the District Court explained, a feature of the property relevant to the appeal is anatural flowpath (the flowpath) running through the southern portion of the land fromwest to east:13At its eastern end the flowpath (which had been re-routed through the Propertyas part of the subdivision works) terminates at Outlet Road at a point where itis piped underneath the road (which forms the eastern boundary of theProperty in this vicinity) and discharges on the other side of the road onto landowned by Exclusive Developments Limited (EDL). The flowpath then runsthrough the EDL land and an adjoining DoC reserve to the Clutha River.I understand the distance of the flowpath from Outlet Road to the Clutha Riverto be somewhere in the order of 1–1.5 kms.The subdivision development[15] In 2016 and 2017 Northlake sought and obtained resource consents14 fromQLDC allowing it to undertake a subdivision and bulk earthworks at the southern endof the property (the earthworks consents). A subdivision consent15 was granted on12 Leave judgment, above n 3, at [17].13 District Court judgment, above n 1, at [6].14 RM160186 granted on 9 May 2016 and RM161127 granted on 14 February 2017, referred tocollectively as the "earthworks consents".15 RM160509.29 September 2016 involving a total area of some 25 ha for a subdivision, including107 residential lots.[16] Both of the earthworks consent applications addressed the related issues of dustcontrol measures and sediment and erosion control measures. Those matters, as theDistrict Court Judge noted,16 are of considerable significance for the property becauseits sub-topsoil layer of earth largely comprises Loess/Loess Colluvium, a fine earthmaterial which is readily mobilised as dust in dry conditions or waterborne sedimentin wet conditions.[17] As the Judge explained:17In short the earthworks consents applications recognised that for dust andsediment management purposes, it was important that bulk earthworks werestaged to minimise the area of work which was open at any time and that aslots were developed they would be re-topsoiled and seeded/fertilised toestablish a stabilising vegetative cover. The methodology for undertakingthese works would be set out in a site management plan (SMP) which wouldbe submitted by the contractor.[18] A site management plan (SMP) in accordance with the requirements ofRM160186 was prepared by Northlake's construction contractor, Civil ConstructionLimited (CCL), and submitted by Northlake to QLDC for approval in early July 2016.The SMP approved on 14 July 2016 contained provisions concerning dust control,erosion control and vegetation. The Judge concluded that by 17 August 2017, the dateof the alleged offending, there would have been "open", in the sense of beingunvegetated, an area of topsoil and Loess Colluvium comprising at least 15–20 ha.18The July and August incidents[19] It appears that July and August 2017 were particularly wet months in theregion.19 As a result of the rainfall there was a discharge of sediment from the property16 District Court judgment, above n 1, at [9].17 At [10].18 At [18].19 The District Court Judge referred to the evidence of Mr Dent, a civil engineer with specialistexperience in storm water and flood management engineering, who gave evidence for Northlakethat the rainfall for those two months was 214 per cent and 144 per cent, respectively, of theaverage monthly rainfall, in a period of the year when there was very little drying due to cooltemperatures and short days: at [20].on 17 July 2017 via the Outlet Road culvert onto land owned by ExclusiveDevelopments Limited (EDL), immediately to the east. In light of this discharge,various amendments were made to the SMP, including temporary restrictions (boards)over outlet pipes and silt retention ponds, construction of silt fences on the EDL landand the installation of some temporary silt fences in stage 3 of the subdivision.[20] The rainfall giving rise to the charge occurred on 17 and 18 August 2017.As the Judge explained:20[31] The rain on 17 and 18 August picked up earth (silt and sediment) fromthe open areas on the Property and carried it into the flowpath and stormwatersystems established as part of the subdivision works. An admission of factsfiled in these proceedings contains the following statement:15 On 17 and 18 August 2017 there was a discharge of watercontaining sediments from the Northlake site. Near surfacesoils (to 15m) at the Northlake site were found in 2016 tocomprise loess and loess colluvium underlain by glacialoutwash and glacial till.16 The discharge travelled through the culvers in Reserve 1003,under Outlet Road, over the Hikuwai and DOC lands, and intothe Clutha River. In making this admission the defendantaccepts that some sediments from its site entered the CluthaRiver. It does not accept that all the sediment that entered theClutha River between 17–18 August 2017 came from theNorthlake site.It is the incident described in paras 15 and 16 of the admission of facts which formedthe basis of the charge against Northlake.The charge[21] The charge was framed as follows:Northlake Investments Limited together with Civil Construction Limiteddischarged contaminants (silts and sediments) onto land in circumstanceswhich might have resulted in those contaminants (or any other contaminantsemanating as a result of natural processes from those contaminants) enteringwater, namely water in the Clutha River, when the discharge was not expresslyallowed by a National Environmental Standard or other regulations, a rule ina Regional Plan as well as a rule in a Proposed Regional Plan for the sameregion (if there is one), or a resource consent.20 District Court judgment, above n 1 (footnotes omitted).Legislative reference: Sections 15(1)(b), 338(1)(a) and 339 of the ResourceManagement Act 1991 and Section 66 of the Crimes Act 1961.The District Court decision[22] Mr Dent, a civil engineer who possesses specialist experience in storm waterand flood management engineering, gave evidence for Northlake and wascross-examined on the subject of silt fences. Relying in part on the responses ofMr Dent during cross-examination, the Judge reached the view that the followingcombination of factors clearly pointed to there being problems, or at least potentialproblems, as at the end of July 2017 in respect of silt and sediment management onthe works area of the property:21• The subdivision works area of somewhere in the range 15–20 ha was open(in the sense of being unvegetated) and had been open for a period of twoto three months or so, notwithstanding the clear recognition in resourceconsent documents that the areas of open land had to be minimised andvegetation established as part of staged subdivision works.• The weather had been particularly wet during July.• Ground conditions in the works area were accordingly wet.• There had been a discharge of silt and sediment laden stormwater fromthe Property into the flowpath on the adjoining EDL land.• Some amendments to the SMP had been put in place.The Judge recorded that nothing in the evidence remotely suggested that the rainfallevents in July and August 2017 were within a range which might not reasonably havebeen foreseen, therefore precautions in relation to such events might need to be takenfrom time to time.22[23] Northlake argued that it took the reasonable precautions of a prudent developerto prevent the discharge. It maintained that the prosecution could not prove beyondreasonable doubt that Northlake, acting through its advisers, failed to investigate thepossibility of sediment discharge into the Clutha River and take appropriatepreventative measures.21 District Court judgment, above n 1, at [27]–[28].22 At [30].[24] The Judge concluded that Northlake was responsible both as an active andpassive discharger in contravention of s 15(1)(b).23 He was satisfied beyondreasonable doubt that Northlake had not in fact taken the reasonable precautions of aprudent developer to prevent the discharge of sediment from the property and that,having an awareness that sediment could discharge into the Clutha River, it had notinvestigated and taken proper preventative measures.24 While accepting that adeveloper might reasonably expect to rely on advice from its professional advisers andcontractors, the Judge did not consider that was the end of the matter, nor that itnecessarily shielded Northlake from liability.25[25] The Judge amended the charge by deleting the words "together with CivilConstruction Limited" and the reference to s 66 of the Crimes Act 1961. While findingthat both Northlake and CCL committed offences against s 15, the Judge consideredthey played different roles in the chain of causation and contributed to the dischargein different ways. Hence both were independently liable for what occurred.26The High Court decision[26] On appeal Northlake argued that the charges ought to have been brought unders 340 because Northlake's liability was essentially "vicarious" in nature. Northlakemaintained that it did not contribute to the physical events charged under s 15, whichwere entirely the province of CCL, and claimed to be entitled to a finding that bothlimbs of the defence in s 340 were established.[27] Clark J considered that, because at trial Northlake ran the defence that it tookall reasonable care, the formulation of the charge had little bearing on the outcome ofthe appeal. She said:27[30] A person, other than a person who actually (i.e physically) causes adischarge, may also cause a discharge through acts or omissions that indirectlycontribute to that discharge. This is captured by the language of s 340. Nomiscarriage arises from the fact that Northlake was treated as though it"personally committed" the offence of discharging sediment into the23 At [73].24 At [58].25 At [70].26 At [77].27 High Court judgment, above n 2 (footnotes omitted).Clutha River. Ultimately, the appeal turns on the Judge's evaluation of theevidence as to the steps Northlake took to prevent a discharge and thesufficiency of those steps, not the formulation of the charge.[28] The Judge considered that although QLDC did not provide guidance on thelevel of rainfall for which a developer must prepare, that did not mean that the trialJudge imposed a retrospective standard by entering a conviction, explaining:[45] Section 15 of the RMA is an independent obligation on a developerover and above any rules or guidance provided by a local council. Ultimately,the developer's obligation as consent holder is not to discharge anycontaminant into water. To avoid causing a discharge, a developer must takeall reasonable precautions as a prudent developer. The fact alone that adeveloper relied on its contractors to make relevant decisions does not alterthat obligation. In this case, as [the prosecutor] pointed out, the appellant,through its manager, was engaged with the contractors on the central questionof silt control and the site problems in that regard.[46] It was therefore open to the Judge to conclude the SMP was notadequately updated and that Northlake failed to take all reasonable steps toprevent the discharge.[29] The appeal was dismissed.The scope of the instant appeal[30] Section 240(2) of the Criminal Procedure Act 2011 (CPA) provides that thesecond appeal court must allow the appeal if satisfied that the appeal should be allowedon any of the grounds described in s 232(2) of the CPA, relevantly:(a) the Judge erred in the assessment of the evidence to such an extent thata miscarriage of justice has occurred;28 or(b) in any case a miscarriage of justice has occurred for any reason.29The second appeal court must dismiss the appeal in any other case.3028 Section 232(2)(b).29 Section 232(2)(c).30 Section 240(3). Section 232(2)(a) is not relevant for this appeal, as Northlake was convictedfollowing a Judge-alone trial.[31] Addressing the formulation of the issues in the leave judgment,31 Northlake'ssubmissions explained:The first two questions raise issues about the nature of RMA liability underss 338 and 340 for which there is confusion and uncertainty in the cases todate. These issues of law require clarification, before the third question canbe answered. These submissions will address the current state of the law, thefirst two questions collectively.[32] Northlake maintained that the first two questions correctly identified that whena contravention of s 15 is alleged, ss 338 and 340 involve distinct types of criminalliability. It mounted an attack on the contrary conclusion in Fulton Hogan Ltd vCanterbury Regional Council as being wrong in principle.32[33] However, as Mr Taylor QC for the respondent dryly observed, not only didNorthlake's submissions conflate issues (a) and (b), they also provided no directanswer to either of them. So far as the latter relating to s 340 is concerned, hesubmitted that it raised a purely academic question given the context of this appeal.To comprehend that submission it is necessary to briefly revisit the course of thelitigation.[34] Although Northlake was charged under s 338 for a contravention of s 15,Northlake invited the trial Judge to also consider its liability under s 340.Mr Pilditch QC's submissions in this Court explained the implications of invokings 340:The only elements the prosecution must prove is that the contraventionoccurred, and it was caused by the agent of the defendant (whether or not thedefendant causally contributed to the contravention or not). In the presentcase all that would have [been] required of the prosecution was to produce thecertificate of conviction of the co-defendant CCL and establish the agencyrelationship. Both facts were admitted by [Northlake]. [Northlake] was guiltyunless it could establish the statutory defence.(Footnote omitted.)31 Reproduced at [13] above.32 Fulton Hogan Ltd v Canterbury Regional Council [2019] NZHC 1767, [2019] NZRMA 642.Several other decisions touching on s 340 were also discussed in Northlake's submissions:Sandstone Dairy Ltd v Southland Regional Council HC Invercargill CRI 2007-425-000001,15 May 2007; Ruki v Bay of Plenty Regional Council [2020] NZHC 669; Bay of Plenty RegionalCouncil v Rerewhakaaitu Farm Ltd [2020] NZDC 22184; and Bay of Plenty Regional Council vCPB Contractors Pty Ltd [2021] NZDC 6000.[35] It transpired however that the reason for such apparent altruism was, as theJudge's decision recorded,33 Northlake's concern that the prosecution's omission toinvoke that provision had the consequence that Northlake was precluded from availingitself of the defence contained in s 340(2)(a)(ii),34 namely lack of knowledge of theoffence and the taking of all reasonable steps to prevent its commission.[36] One might wonder how Northlake's situation could be improved by theaddition of a further charge under a different provision (s 340) in order to avail itselfof a defence which is specific to that provision (s 340(2)(a)(ii)). The answer is to befound in Northlake's appellate strategy, which was to highlight what in its view wasthe comparative unfairness of its being required to face a charge of active dischargewithout the ability to defend such a charge by reliance on the reasonableness of itsconduct.[37] During an exchange with this Court, Mr Pilditch sought to contrast theapproaches to prosecutions under the different sections. He argued that there is areasonableness defence available if a defendant is charged under s 340 or with passivedischarge under s 338, yet not if the defendant is charged with active discharge unders 338. It was Mr Pilditch's view that it was not just and principled for the availabilityof the reasonableness defence to depend upon the framing of the charge by theprosecution, where there is no factual difference. He asked: how is it that if the prosecution say it is active you cannot rely on[reasonableness] but if it is allowing or they file it under s 340 you can?[38] The short answer to Mr Pilditch's cri de cœur is that the structure of the RMAoffence provisions and the narrowly-drawn scope of the statutory defences are as thelegislature has decreed. It is not possible, by the addition of a charge under s 340, tocross-pollinate charges under other provisions with defences that are specificallyconfined to s 340. Nor can an argument be mounted that there is some abuse of processon the part of a charging authority which elects not to invoke s 340 and, in Northlake'seyes, thereby deprives a defendant of the s 340(2) defence.33 District Court judgment, above n 1, at [79].34 See [10] above.[39] In our view the instant appeal does not engage s 340, either specifically or insome analogous way. We think it undesirable to be drawn into an obiter analysis ofthat provision and in so doing to engage with the attack mounted by Mr Pilditch onFulton Hogan Ltd v Canterbury Regional Council.35[40] Consequently we accept Mr Taylor's submission that issue (b) is academic inthe context of the instant appeal, where the charges were brought under ss 15 and 338only and embraced both active and passive discharge. We turn to address the otherissues, the first of which is framed as one of general principle while the latter is tiedto the particular circumstances of this case.Issue (a): Is a developer liable under s 15, as an active or passive discharger, if itacted reasonably in engaging expert advice and relying on it?[41] The rationale for this question was explained in the Leave judgment asfollows:36The Court in Biogas did not need to address whether a defendant is liableunder s 15 if they reasonably rely on expert advice. The present case, unlikeBiogas, involves a case where the defendant engaged expert advice. The issueis whether a defendant is liable under s 15, whether as an active or passivedischarger, if it acted reasonably in engaging expert advice and in relying onit. As this issue was not squarely addressed in the lower courts, we considerleave should be granted.[42] Mr Taylor was critical of the form of the question, submitting that the onlyanswer could be: it depends on the facts. Arguing that the question is too hypotheticaland hence incapable of a useful answer, he proposed the following alternativequestion:Whether, in light of the lower courts' findings of fact, it was open for them tofind that [Northlake] contravened s 15 (and committed an offence via s 338)RMA, even if [Northlake] reasonably engaged expert advisers and contractorsand followed their advice.[43] While we have some sympathy with that criticism, Mr Taylor's alternativequestion tends to merge the general proposition with the particular facts of this case.In our view the line between the two was better drawn by the form of two questions35 Fulton Hogan Ltd v Canterbury Regional Council, above n 33.36 Leave judgment, above n 3, at [16].which Mr Pilditch identified (albeit he proposed that they both be addressed in issue(c)), namely:(a) Whether a developer reasonably relying on experts could ever be guiltyof a s 15 contravention?(b) Whether Northlake, if it reasonably relied on experts, should have beenfound guilty of this s 15 contravention?The former neatly captures the essence of the original issue (a).[44] Mr Pilditch submitted that, when a developer engages third party experts todesign earthworks, implement those works and monitor them for RMA compliance,liability for a contravening discharge could only arise either under the passive limbidentified in Biogas or under s 340. Mr Pilditch argued that a developer like Northlakecannot be directly liable, because the "direct causes" of the discharge rest with a thirdparty whose actions are not attributable to the developer.37 Hence he contended thatin the instant case, if Northlake could be liable at all, it could only be either on thealternative passive basis of failing to take the precautions that a reasonable prudentdeveloper would take in these circumstances, or under s 340.38[45] Mr Taylor rejected that submission as contrary to the philosophy of the RMA,noting it was rejected by Judge Sheppard at first instance in Biogas where his Honoursaid:39It was the defendant which engaged the contractor to make the excavation. Itwas the defendant's project, and it cannot avoid responsibility by pointing tothe contractor engaged to provide a machine and operator to make theexcavation at [the defendant's] direction.[46] Mr Taylor submitted that Northlake's argument amounted to the propositionthat putting contracts in place for the completion of certain work shields a developerfrom RMA liability, effectively allowing a developer to delegate its obligations under37 Citing Cullen v R [2015] NZSC 73, [2015] 1 NZLR 715.38 The latter of which, as discussed above at [34]–[37], was in Mr Pilditch's view the "logical choice"in this case because of the contractor/agency relationship.39 McKnight v NZ Biogas Industries Ltd DC Auckland CRN-204-802-4849, 5 July 1993 at 9.the RMA by contracting with third parties. He contended that there was nothing inthe RMA which supports such a proposition, which is contrary to its purpose andinconsistent with its enforcement provisions.[47] It is helpful to distinguish between active and passive discharges although theymay of course be contemporaneous. In the case of an alleged active discharge, it isour view that the key issue is simply one of causation. If it is shown that a defendantis a cause of a discharge then, subject to the s 341 defences, the defendant willcontravene s 15(1) irrespective of whether there has been reasonable reliance by adeveloper on a third party contractor. As this Court observed in Biogas:40Once it is accepted that to discharge in s 15(1) includes to cause to bedischarged, the present case is indistinguishable from the Alphacell Ltd case.Just as in that case the failure of pumps to prevent overflow from settling tanksled to the discharge of polluted water into the river, so in this case the failureof the excavation to contain the bladder led to the contaminant flowing by wayof the drain into the stream.[48] Mr Pilditch viewed the ratio of Biogas as being that the defendant was liablethrough the actions of its managing director in personally directing the machineoperator (who was digging a hole) to also dig a trench and install a drain for water thatmight seep into the excavation. The excavation, which NZ Biogas Industries "directlycaused", failed and caused the discharge. Hence the defendant was guilty on orthodoxattribution principles.[49] However this Court went on to supplement the passage above in the followingway:41Even more directly in this case, on the findings of the Judge, the manner inwhich the bladder was installed by or under the supervision of the respondentultimately led to the discharge. The operations which the respondent was ina position to control caused the discharge.[50] The point which emerges is that the requisite causal link can exist absent apersonal direction of the kind in Biogas. As the Court said, the causal link betweenthe person charged and the discharge will be an issue of fact in every case.42 Given40 McKnight v NZ Biogas Industries Ltd, above n 6, at 672.41 At 672.42 At 671.Mr Pilditch's emphasis on "direct causes" it is timely to recall both Lord Wilberforce'sobservation that "causing" must be given a common sense meaning, without theintroduction of refinements such as causa causans, effective cause or novus actus,43and this Court's adoption of his reasons.44[51] We consider that if a causal link is demonstrated to exist between a defendantand a discharge, then the consequence of s 341 is that the defendant will be guilty ofan active discharge unless the defences in s 341 can be invoked.[52] Turning to the scenario of an alleged passive discharge, this Court in Biogasexplained:45We find no straining of language in saying that a person allows a contaminantto escape who fails to take the precautions that a reasonably prudent person inthe position would take to prevent that escape. The element of awareness inthe concept of allowing is broader than that adverted to in the Courts below.It is sufficient if there is awareness of facts from which a reasonable personwould recognise that escape could occur. In that case, failure to investigateand take appropriate preventive steps would amount to allowing an escapeshould it subsequently occur.[53] Again, the answer to the reformulated question, whether a developerreasonably relying on experts could ever be guilty of a s 15 contravention, will be factspecific. As Mr Pilditch observed in his argument on s 340, the prosecution has theonus of proving the failure to take such precautions. If a developer had engaged andappropriately acted upon relevant expert advice, the prosecution may well havedifficulty in discharging that onus. But, as Mr Taylor rightly said, it depends on thefacts.[54] Consequently, in respect of both active and passive discharges the answer tothe reformulated question must be yes. A developer reasonably relying on expertscould nevertheless be guilty of contravening s 15, depending on the particular facts ofthe case before the court.43 Alphacell Ltd v Woodward, above n 9, at 834.44 McKnight v NZ Biogas Industries Ltd, above n 6, at 672.45 At 672.Issue (c): Did Northlake act reasonably in engaging expert advice and relying onit?[55] Mr Pilditch maintained that this question correctly framed the central issuewhich should have been addressed in the lower courts. However the question ispredicated on a negative response to issue (a). It assumes that reasonable reliance onexpert advice is the sole determinant of liability in cases such as that of Northlake, aproposition we have rejected. In our view where as here the inquiry is whether amiscarriage of justice occurred, Mr Pilditch's reformulated second question is moreapt, namely whether Northlake, if it reasonably relied on experts, should have beenfound guilty of a s 15 contravention.46[56] Mr Pilditch reprised his theme that reasonable reliance on expert advicenecessarily defeats a prosecution under s 15(1). Contrasting the present case withBiogas, he submitted that any developer, like Northlake, that has engaged third partyexperts to conduct earthworks in a manner that prevents the discharge of sediment isprima facie acting reasonably and prudently. Whereas Biogas Industries failed at thefirst hurdle of seeking advice on matters that required expertise, Northlake did not.He went on to submit:But where a developer has prudently engaged appropriate experts, and isfollowing their expert's advice, the prosecution must prove that thedeveloper's reliance on experts was unreasonable or, putting matters anotherway, negate any reasonable possibility that the developer's reliance on expertswas reasonable in the circumstances. Without proof of that there is no proofof the causal nexus. Proving, beyond reasonable doubt, that a developershould not have relied on the advice of experts is a high hurdle because adeveloper should reasonably be able to engage and rely on expert advice.Therefore, if a developer has reasonably engaged appropriate experts,followed their advice, and it was reasonable to do so, it is difficult to see roomfor that developer to be guilty under the passive limb relying on [Biogas] andconventional strict liability principles.[57] Assuming for the purposes of analysis that it would be possible for a developerto have so little knowledge of and physical connection with a development thatresponsibility for a discharge could be successfully abrogated, the present case is notof that nature. As the trial Judge observed, Northlake was the owner of the property,it personally sought and obtained the resource consents allowing the bulk earthworks46 Set out at [43(ii)] above.on and subdivision of the property, and it was undertaking those bulk earthworksthrough its contractor but under the observation of its manager Mr Bretherton.[58] We see no error in the District Court Judge's conclusion in the followingterms:47[72] There can be no doubt that there was a causal connection between theactions of Northlake and the discharge. At the risk of being repetitive, it wasthe Property owner, developer and resource consent holder which contractedCCL to undertake the physical works which brought about the discharge. Itwas actively involved in oversight of the works. As consent holder it wasobliged to ensure that silt and sediment controls in accordance with an SMPwhich was fit for purpose were in place for the duration of the project. Inresponse to a series of questions from [the prosecutor] as to the need toimprove the sediment control system after the discharge Mr Brethertonacknowledged that "ultimately it was my responsibility". It was alsoresponsible to ensure that a fit for purpose SMP was in place through theduration of the project and it failed to meet that responsibility.[73] I consider that Northlake's failure in this regard was an operative oreffective factor in the chain of causation leading to this discharge andaccordingly it might be regarded as falling into the active discharger categoryidentified in URS and accordingly discharged the contaminant which enteredthe Clutha River. If I am wrong in that characterisation and Northlake isconsidered to be a passive discharger, it nevertheless allowed the discharge totake place because it failed to take the precautions a reasonably prudentdeveloper would have taken to avoid the discharge.(Footnote omitted.)[59] The conclusion that Northlake did not take the reasonable precautions of aprudent developer was based both on the need for revegetation and staging of thedevelopment, and on the inadequacy of the SMP in relation to sediment controls.The judgment of Clark J on appeal contains substantial extracts from thecross-examination of Mr Dent, Northlake's expert witness on water resourcesengineering.48 Her Honour concluded that Mr Dent's expert opinion supported theconclusion that it was necessary to prepare for two successive rainfall events of thescale that occurred in August 2017. She considered that a prudent developer woulddevise a SMP requiring sediment controls which provide that level of protection. Sheconsidered that Mr Dent's evidence about the "back-up" nature of the silt fences47 District Court judgment, above n 1.48 High Court judgment, above n 2, at [42]–[43].constructed after the July 2017 incident suggested that Northlake's sediment controlswere inadequate to prevent one heavy rainfall event, let alone two successive events.49[60] In addressing Mr Pilditch's submission that it was "illogical" to suppose that adischarge within a few metres of the Northlake site boundary in July 2017 should havealerted Northlake to an impending discharge into the Clutha River over one kilometreaway, the Judge stated:50[47] As I have said, it is not so much about whether Northlake shouldhave been alerted, but what this occurrence could be taken to suggest aboutthe state of the sediment controls in place at the time. As Mr Dent accepted,the further controls implemented afterwards amounted to "backup measures"and would do little to compensate for an inadequacy in the primary controlsystem. I do not consider the connection between the July 2017 discharge andthe August 2017 discharge to be illogical. Although the scale of the dischargein August was more serious, so were the not unforeseeable weather conditions.The July 2017 discharge was reasonably to be seen as evidence of theunderlying weakness of the sediment control system and the susceptibility ofthe systems that were in place to an event of the kind that occurred on 17 and18 August.[48] It is the failure of Northlake to insist on a stronger sediment controlsystem, in accordance with the expectations of expert opinion at the time(albeit Northlake says it was not informed of this by its own expert), thatprevents Northlake from demonstrating that a miscarriage of justice hasoccurred.[61] We do not consider that the conclusions of either Judge are impeached. Indeedon our review of the evidence we agree with them. It follows that we are not satisfiedthat either of the grounds in s 232(2)(b) or (c) of the CPA are established.Consequently we must dismiss the appeal.Result[62] The appeal is dismissed.Solicitors:Winton Group, Auckland for AppellantRoss Dowling Marquet Griffin, Dunedin for Respondent49 At [44].50 High Court judgment, above n 2.