TRENT v CANTERBURY REGIONAL COUNCIL [2021] NZCA 123

TRENT v CANTERBURY REGIONAL COUNCIL [2021] NZCA 123 [21 April 2021]IN THE COURT OF APPEAL OF NEW ZEALANDI TE KŌTI PĪRA O AOTEAROACA257/2020[2021] NZCA 123BETWEEN RUSSELL WILLIAM TRENTApplicantAND CANTERBURY REGIONAL COUNCILRespondentHearing: 17 March 2021Court: French, Ellis and Muir JJCounsel: T J Mackenzie and A L Hollingworth for ApplicantT J McGuigan and V M Sugrue for RespondentJudgment: 21 April 2021 at 9 amJUDGMENT OF THE COURTThe application for leave to bring a second appeal is declined.____________________________________________________________________REASONS OF THE COURT(Given by French J)[1] Mr Trent and his employer Emergent Cold Ltd1 both pleaded guilty to a chargeof discharging a contaminant onto land in circumstances that might result in thecontaminant entering water in breach of s 15(1)(b) of the Resource ManagementAct 1991. Judge Dwyer imposed a fine of $145,350 on the company and a fine of$97,000 on Mr Trent.21 At the time of the offending, the company was known as Polarcold Ltd.2 Canterbury Regional Council v Emergent Cold Ltd [2019] NZDC 23930 [Sentencing notes].[2] Mr Trent appealed his sentence to the High Court. The appeal was dismissedby Nation J.3[3] Dissatisfied with that outcome, Mr Trent now wishes to appeal to this Court.Because such an appeal would be a second appeal, leave is required.4[4] The focus of the proposed appeal is the significance (if any) that should beattributed to the fact that under the Resource Management Act there is a differencebetween the maximum monetary penalty to which companies and individuals arerespectively liable for committing the offence of discharging a contaminant.For companies, the maximum fine is $600,000. For individuals, it is $300,000.5BackgroundThe facts of the offending[5] The company operates a temperature-controlled warehousing and coldstorage business. Mr Trent is employed as its South Island Engineering Manager.He was a long serving and highly regarded employee.[6] On 3 April 2018, the company instructed Mr Trent to purge some vintagecompressors of ammonia vapours to enable their safe removal to a motor museum.[7] Mr Trent undertook this task using a purging tank that was situated in closeproximity to a gutter. The gutter directed water into the Christchurch City Council'sstorm water system. The purging process took five hours during which time Mr Trentattempted to control the smell of ammonia by adding more water to the tank to topit up. As a result, there was an overflow from the tank of ammonia or ammoniacontaminated water. There was no secondary containment system around the base ofthe purging tank to contain any spillage. There was also a small leak in the purgingline going to the tank which Mr Trent said he fixed.3 Trent v Canterbury Regional Council (Christchurch) [2020] NZHC 767 [High Court judgment].4 Criminal Procedure Act 2011, s 237.5 Resource Management Act 1991, s 339(1).[8] Section 15(1)(b) of the Resource Management Act relevantly provides thatno person may discharge any containment onto land in circumstances which mayresult in the contaminant entering water. The only exceptions are if the discharge isexpressly allowed by a national environmental standard or other regulations, a rule ina regional plan or proposed regional plan for the same region, or a resource consent.None of those exceptions applied. Under Rule 5.89 of the Canterbury Land and WaterRegional Plan, discharging hazardous waste to land where it may enter water is adiscretionary activity and requires a resource consent. The company did not have aresource consent. The over-flow flowed across the ground and into the gutter.Mr Trent estimated the volume of the overflow as being in the order of 200 to400 litres although the Canterbury Regional Council contended it was significantlyhigher than that.[9] Later that same day, a nearby resident contacted Fire and Emergency NZ toreport a very strong ammonia smell. Fire and Emergency attended the site and spoketo Mr Trent who advised that there was no issue, just the usual venting.[10] However, once in the City Council's storm water system, the contaminatedwater flowed into the Kaputone Creek, resulting in an almost complete fish kill alongfive kilometres of the creek. A total of 1779 dead fish were recovered, most of themeels including a very significant number of longfin eels which are classified by theDepartment of Conservation as an at risk species and in decline.[11] The incident also had a significant cultural impact on local iwi as detailed in amana whenua report provided to the sentencing Judge. The creek is a long treasuredwāhi taonga of the iwi. It was part of an extensive network of wetlands and streamsand was an important food gathering place for Māori. Eels were a particularlyimportant food source. The report also advised that iwi are currently involved withthe City Council in a project to raise the degraded ecological values of these waters.The iwi expressed its particular anger and distress at seeing all the effort and resourcesthat had been put into protecting the longfin eel going to waste.[12] Both the company and Mr Trent were charged with a breach of s 15(1)(b) ofthe Resource Management Act; the company on the basis that as Mr Trent's employerit was vicariously liable for his actions. The company accepted full responsibility forthe offending and through counsel at the sentencing said it had not provided Mr Trentwith adequate instructions or equipment to undertake the job which he had been given.The sentencing in the District Court[13] After considering four comparator cases,6 the Judge identified the followingfactors as being particularly relevant to his decision:7• The direct and devastating effect of the discharge on aquatic life inthe creek;• The extent of that effect over a distance of five kilometres or so;• The fact that species recovery is likely to take a lengthy period of time,at least insofar as eels are concerned;• The cultural significance of the waterways damaged by the offending andthe affront to tangata whenua;• The unsatisfactory manner in which the Defendants dealt with anobviously highly toxic material;• The failure to have any bunding to contain spills from the purge tank whichwas situated in close proximity to the Council storm water drain, which anyspill would obviously enter.[14] The Judge then noted there was a need to set penalties for offending of this sortwhich encourage the safe storage and handling of dangerous and toxic materials anddeter unsafe practices. He found there to be significant shortcomings and a highdegree of culpability on the part of the company and "regrettably to some lesser extenton the part of Mr Trent."8[15] Having regard to all of those matters, the Judge considered the appropriatestarting point for the company was a fine of $180,000.9 As regards Mr Trent, the Judge6 Taranaki Regional Council v Ravensdown Fertiliser Co-operative Ltd DC New Plymouth CRI-2011-043-2426, 15 December 2011; Nelson City Council v KB Contracting and Quarries Ltd[2018] NZDC 11153; Canterbury Regional Council v Canterbury Greenwaste Processors Ltd DCChristchurch CRI-2012-009-9820, 24 April 2013; and Auckland Council v Jenners WorldwideFreight Ltd DC Auckland CRI-2014-092-257, 4 February 2015.7 Sentencing notes, above n 2, at [14].8 At [16].9 At [17].said the appropriate starting point was a fine of $120,000, noting in two importantpassages:10That, of course, is 66% of the starting point I have adopted for Emergent andreflects its acceptance of ultimate responsibility rather than any principle thatcompanies should ipso facto be fined more than individuals. One hundred andtwenty thousand dollars is a significant amount itself and recognises that therewere real failings on your part as the man on the spot who was supervising thepurging operation. The need for close management of that operation shouldhave been apparent in light of the proximity of the Council drain ifnothing else. The purging operation was undertaken over a period of aboutfive hours during which time there had been a strong ammonia smell and itwas apparent that an overflow was occurring.I accept that you did not turn your mind to precisely where the overflow mightultimately end up once it had got into the Council storm water system andI also accept that you did not really turn your mind to the very toxic nature ofthe discharge. I further accept that Emergent did not adequately instruct orsupervise you in that regard. That is why I have chosen a lower starting pointfor you than I have for Emergent.[16] The Judge then reduced the respective starting points on account of previousgood character – both being first offenders – and also on account of their guilty pleas.The discounts applied resulted in the amount of the fine imposed on the companybeing $145,350 and on Mr Trent $97,000.11 Both defendants were also ordered topay costs.The High Court appeal[17] In the High Court, Mr Trent advanced three grounds of appeal.12[18] The first of these was that the sentencing Judge had erred by failing to take intoaccount the difference between the maximum monetary penalty for corporateoffenders and individuals.13 The second was that the level of the fine imposed onMr Trent was out of kilter with other cases.14 The third ground was that the sentencingJudge had erred in distinguishing a 2011 case on the grounds there had beenconsiderable upward movement in sentencing levels since that case was decided.1510 At [18]–[19].11 Sentencing notes, above n 2, at [20]–[22].12 High Court judgment, above n 3.13 High Court judgment, above n 3, at [24].14 At [56].15 At [91].[19] All three grounds were rejected by Nation J who found there had been no errorin the District Court's sentencing methodology and that the sentence was within rangeand not manifestly excessive.16The application for leave to appeal to this Court[20] In order to obtain leave to appeal, Mr Trent must satisfy us of one of two things:either that the proposed appeal involves a matter of general or public importance orthat a miscarriage of justice may have occurred or may occur unless the appealis heard.17[21] The focus of the proposed appeal is (as it was in the High Court) that thesentencing Judge was required to take the differing maximum penalties into account.[22] Mr Trent's counsel Mr Mackenzie accepted that the sentencing Judge had beencognisant of the difference in the maximum penalties but disputed the finding in theHigh Court that it had been taken into account. In Mr Mackenzie's submission,the Judge should have given the difference some weight by incorporating the lowermaximum penalty applying to Mr Trent into the latter's starting point. Instead,the Judge wrongly anchored the starting point purely off the company's maximum finewhen that was a maximum fine that was twice as high as what Mr Trent faced.[23] According to Mr Mackenzie, the practical effect of the Judge's approach is thatthe sentence for Mr Trent does not reflect his lower culpability vis-à-vis the companythat the Judge was trying to reflect. The company's starting point of $180,000 was30 per cent of the maximum penalty applying to it. In contrast, the starting pointadopted for Mr Trent was 41.66 per cent of the maximum penalty applying to him.The result was a sentence that reflected a third higher culpability, rather than the thirdless culpability that the Judge had intended.[24] Mr Mackenzie further contended there are currently inconsistent approaches tothe consideration of maximum penalties for dual sentencings of individuals and16 At [105].17 Criminal Procedure Act, s 253(3).companies in the lower courts. The issue was therefore not just confined to this casebut one of general and public importance warranting resolution by an appellate court.[25] In support of the leave application, Mr Mackenzie also contended an appealwas necessary to avoid the risk of a miscarriage of justice. If the different maximumpenalty had been taken into account, it would have meant a significantly lower finefor Mr Trent. As it was, the starting point the sentencing Judge adopted was and stillis 50 per cent higher than any adopted in relation to an individual offender in anyother case.Analysis[26] Mr Mackenzie said all that could be said on behalf of Mr Trent. However, weare not persuaded that this case meets the threshold required to grant leave.[27] In our view, there is no tenable basis for an argument that where a companyand an individual are being sentenced in respect of the same offending, the startingpoint must always equate in a proportionate way to the difference in themaximum penalties. In this case where the culpability of the offenders was not equal,that approach would have meant the Judge was obliged to adopt a methodologyinvolving first a relative culpability calculation that was then multiplied against aproportionate maximum penalty to reach a starting point.[28] We say there is no tenable basis for such an argument for the following reasons.[29] First, it is a long established and fundamental principle that sentencing is anexercise in discretion.18 It is most emphatically not and never has been a mathematicalexercise of the sort suggested on behalf of Mr Trent.[30] Secondly, the argument rests on a flawed premise, namely the existence of anobligation to take the difference in maximum penalties into account in setting a startingpoint for individual offenders.18 Zhang v R [2019] NZCA 507, [2019] 3 NZLR 648 at [120]; and Orchard v R [2019] NZCA 529at [28].[31] When asked by us to identify the source of an obligation to take the differenceinto account, Mr Mackenzie relied on s 8(b) of the Sentencing Act 2002. Section 8(b)states that a sentencing judge must take into account the seriousness of the type ofoffence in comparison with other types of offences, as indicated by the maximumpenalties prescribed for the offences.[32] However, s 8 is clearly addressed to the issue of a comparison of maximumpenalties as between different offences. It does not purport to address the issue ofdifferent maximum penalties as between corporate and individual offenders who havecommitted not different offences but the same offence.[33] The third reason we consider the argument is misconceived is that it overlooksthat the maximum penalty for individual offenders for the offence in question is not inany event a fine of $300,000 but rather a term of imprisonment of two years.The company for obvious reasons is not liable to any custodial sentence.A comparison of fine levels is not a comparison of maximum penalties.[34] A fourth difficulty with the argument is that it assumes the reason for the highermonetary penalty for companies is that Parliament regarded companies as beinggenerally twice as culpable as individual offenders or that offending by companies wasinherently generally twice as serious.[35] However, in our view, the correct position is as stated by Mander J in thedecision of Waslander v Southland Regional Council:19[53] Similarly, comparison with the greater maximum penalty available forcorporate defendants does not assist Mr Waslander's argument.Corporate defendants will usually be associated with larger commercialenterprises, although often it will simply be a matter of circumstance as to howthe individual dairy farmer has organised or structured his dairy operation.The higher penalty for corporate defendants reflects both the need for theCourt to be able to impose meaningful penalties that will carry the necessarypunitive and deterrent effect on large commercial organisations and theabsence of any alternative non-monetary sentences such as imprisonmentwhich are available when natural persons appear before the Court for this typeof offending. I do not consider the level of fine imposed in the present casebreached any policy which sits behind the higher penalty levels for corporate19 Waslander v Southland Regional Council [2017] NZHC 2699.defendants in terms of a percentage of the maximum penalty, as wascontended for by Mr van der Wal.[36] Contrary to a submission made by Mr Mackenzie,20 the view expressed inWaslander is strongly supported by the legislative materials which led to the enactmentof the Resource Management (Simplifying and Streamlining) Amendment Act 2009.Prior to that amendment, the legislation did not distinguish between companies andindividual offenders in relation to fines. The maximum fine for both was $200,000.[37] The recurring theme in the legislative materials is that the existing fine levelsespecially for companies were considered too low to be an effective deterrent.21 To getthe balance right the fine levels needed to increase and there needed to be a distinctiondrawn between individual offenders and corporate entities.22 The latter had a greatercommercial incentive to offend and without a very significant increase in the monetarypenalty, the more cost-effective course for commercial entities was to break the lawand then pay up. To put it another way, the risk of offending on economic groundswas greater in the case of companies. As of course generally speaking is their capacityto pay a fine.23[38] Also contrary to a submission made by Mr Mackenzie, we do not considerthere is any conflict between what Mander J said in the passage quoted above and whathas been said in two other High Court cases Stumpmaster v Worksafe New Zealand24and Sowman v Marlborough District Council.25[39] Of those two cases, the first in time was Stumpmaster. The Court in that caseundertook a review of culpability bands in light of the Health and Safety inEmployment Act 1992 being replaced by the Health and Safety at Work Act 2015.26Unlike the amending legislation at issue in the case before us, the new Act not only20 Mr Mackenzie submitted — incorrectly in our view — that little insight was to be gained on thepenalty increase from the legislative materials.21 (19 February 2009) 652 NZPD 1485;(8 September 2009) 657 NZPD 6133; and Ministry for theEnvironment "Departmental Report on the Resource Management (Simplifying and StreamliningAmendment Bill)" [Departmental Report] at 403–406.22 (8 September 2009) 657 NZPD 6133.23 Departmental Report, above n 22, at 403.24 Stumpmaster v Worksafe New Zealand [2018] NZHC 2020, [2018] 3 NZLR 881.25 Sowman v Marlborough District Council [2020] NZHC 1014, [2020] NZRMA 452.26 Stumpmaster, above n 24, at [1].increased penalties but importantly also introduced new classes of duty holders andexpressly identified those who owed the primary duty of care.27 In our view, thedecision is not contrary to the proposition articulated in Waslander about the limitedrelevance of different maximum penalties under the Resource Management Act andhas no bearing on this case.[40] Sowman — the second High Court decision relied on by Mr Trent — was acase under the Resource Management Act. Also, like the present case it involved abreach of s 15(1)(b). But that is where the similarities end. In Sowman, the employingcompany had been discharged without conviction28 and the individual offender hadbeen fined $18,000.29 The latter unsuccessfully appealed on the grounds he too shouldhave been discharged without conviction.30[41] What Mr Mackenzie submits demonstrates inconsistency with Waslander isone sentence in the Sowman judgment. The sentence comes at the end of a paragraphdiscussing sentencing bands that had been developed for dairy effluent cases. In theparagraph, the High Court Judge (Cooke J), responded to a submission that thesentencing Judge had placed Mr Sowman in the wrong sentencing band. Cooke J saidthere were two reasons that suggested the bands should no longer be followed.First, they had been developed 13 years ago and secondly, they predated the 2009amendment increasing the level of fines. He pointed out that the increase suggestedthere should be an overall increase in the levels of the financial maximums in eachband and, in the sentence emphasised by Mr Mackenzie, added it also suggested thepenalties should generally be higher for corporates than individuals in each band.31[42] However, Cooke J did not refer to Waslander. Nor did he in any way attemptto re-evaluate the bands. And significantly for present purposes he also expresslyacknowledged in a later section of the judgment that differences between corporateand individual responsibility was a consideration that "may make matters morecomplicated than the three bands".3227 At [17].28 Sowman, above n 25, at [17].29 At [25].30 At [74]–[78].31 Sowman, above n 25, at [65].32 At [68].[43] We consider it is a stretch to suggest that one tentative comment subsequentlyqualified in a later section of the same judgment can mean the High Court authoritiesare in conflict.[44] All of this leads us inexorably to the conclusion that this case does not raise aquestion of general or public importance which should be submitted for determinationto this Court. We agree with Nation J that the difference in the maximum monetarypenalties does not require a sentencing Judge to necessarily arrive at a monetarystarting point which reflects that difference. In making that statement and the furtherpoint that the difference while of limited relevance in this case might be relevant inanother case depending on the circumstances, the Judge was reflecting established andwell understood sentencing principles.33[45] Turning then to the issue of a possible miscarriage of justice.[46] Nation J's conclusion that the fine imposed on Mr Trent was within the rangeof sentences reasonably available to the sentencing Judge was reached after anextensive analysis of the caselaw.34 In some of the cases, the conduct of the individualoffender was undoubtedly more blameworthy than Mr Trent but on the other hand theconsequences of his wrongdoing were for the most part far more significant. There isgrowing public concern about the quality of our waterways and the discharge ofcontaminants into them, something the sentencing Judge was also entitled to take intoaccount. We are not persuaded that a second appeal is warranted on the basis of amiscarriage of justice.Outcome[47] The application for leave to bring a second appeal is declined.33 High Court judgment, above n 3, at [53].34 The decisions traversed by Nation J were: Taranaki Regional Council v Ravensdown FertiliserCo-operative Ltd, above n 6; Sowman, above n 25; Southland Regional Council v Egginton [2015]NZDC 14393; Canterbury Regional Council v Canterbury Greenwaste Processors Ltd, above n 6;Nelson City Council v KB Contracting and Quarries Ltd, above n 6; and Auckland Council vJenners Worldwide Freight Ltd, above n 6.Solicitors:Wynn Williams, Christchurch for Respondent