BEFORE THE ENVIRONMENT COURT I MUA I TE KOOTI TAIAO O AOTEAROA

UNDER

AND

IN THE MATTER

BETWEEN

AND

AND

AND

AND

AND

AND

Decision No. [2020] NZEnvC O 2...0

the Resource Management Act 1991

of an application for ex parte interim

enforcement orders under s 320 of the Act

WHANGAREI DISTRICT COUNCIL

Applicant

(ENV-2020-AKL-000020)

SUSTAINABLE SOLVENTS GROUP

LIMITED

First Respondent

SUSTAINABLE SOLVENTS LIMITED

Second Respondent

BRIAN THOMAS SMITH

Third Respondent

SOLVENT SERVICES NZ LIMITED

Fourth Respondent

JOHN MANUS PRETORIUS

Fifth Respondent

AARON GEOFFREY BALDWIN

Sixth Respondent

Court: Environment Judge· D A Kirkpatrick sitting alone under sections 309(2) and 320 of the Act

Hearing: on the papers ~,.. __ ~~ s-V.L OF~li1 Date of Decision: 3 March 2020 ~-0"

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DECISION ON EX PARTE APPLICATION FOR INTERIM ENFORCEMENT ORDERS

ORDERS

1. These orders are made against the following Respondents jointly and severally:

i. Sustainable Solvents Group Limited.

ii. Sustainable Solvents Limited.

iii. Brian Thomas Smith.

iv. Solvent Services NZ Limited.

v. John Manus Pretorius.

vi. Aaron Geoffrey Baldwin.

2. Pursuant toss 320(1) and 314(1)(a)(i) and (ii) of the RMA, the Respondents,

jointly and severally, are immediately required to cease bringing any

solvents, chemicals or contaminated water constituting hazardous

substances (hazardous substances) ~on to the property at 77 Allis Bloy

Place, Ruakaka being Lot 5 on Deposited Plan 436718 as contained in

Record of Title 536419 (the property).

3. Pursuant to ss 320(1) and 314(1)(b)(ii) and 314(1)(c) of the RMA, the

Respondents, jointly and severally, are required within ten (10) working

days to identify to the Whangarei District Council (the Council) and engage

one or more suitably qualified and reputable persons to:

i. undertake a risk assessment prior to undertaking any of the works

required by these orders; and

ii. undertake representative sampling to determine the exact type and

nature of the hazardous substances currently stored on the property;

and

iii. provide to the Council a full inventory of all hazardous substances

currently stored on the property; and

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iv. ensure that all hazardous substances that are situated on the Property

are securely stored by:

a. securing and otherwise making stable all containers and drums;

b. decanting all liquids constituting hazardous substances currently

in old, damaged, rusty or leaking drums and containers into

secure and appropriate drums and containers; and

c. sealing all such containers and drums.

4. Pursuant toss 320(1) and 314(1)(a)(ii) of the RMA, the Respondents, jointly

and severally, are required within ten (10) working days to cease the

storage of solvents, chemicals and all hazardous substances outside of the

containment bund at the Property and move all hazardous substances which

are outside the containment bund onto an impermeable surface with appropriate

containment.

Terms and conditions

5. Pursuant to s 314(3) of the RMA, the Respondents, jointly and severally, are

required to adhere to the following terms and conditions:

Service

(a) The orders apply to the personal representatives, successors and

assigns of each Respondent to the same extent as it applies to that

Respondent.

6. The orders shall take effect from when they are served on each

Respondent.

Consent

7. Pursuant to s 315(2) RMA, if the Respondents or any of them fails to

comply with these orders, or if Sustainable Solvents Group Limited as

the owner of the property requests it to do so, then the Whangarei District

Council has the consent of the Environment Court to comply with the

orders on the Respondents' behalf and, for this purpose, to enter upon

the property and sell or otherwise dispose of any materials salvaged in

complying with these orders and after allowing for any monies received,

if any, recover the costs and expenses of doing so as a debt due from

the Respondents or any of them.

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Costs

8. Costs are reserved.

REASONS

Introduction

[1] On 2 March 2020 the Whangarei District Council applied ex parte for interim

enforcement orders against several parties in respect of a solvent recycling plant on

grounds including that it is operating outside the terms and conditions of its resource

consent and in a manner that poses significant risks to the environment.

[2] The application was supported by four affidavits:

i) Lee Thomas Bailey, a senior advisor on hazardous substances as the

Environmental Protection Authority (EPA), sworn 24 February 2020;

ii) Murray Allan McDonald, a manager of resource consents at the Whangarei

District Council, affirmed 24 February 2020;

iii) Colin Thomas Dall, the group manager of regulatory services at the Northland

Regional Council, affirmed 25 February 2020; and

iv) Ronald Neil Dobbs, an enforcement officer of the Whangarei District Council

under the Hazardous Substances and New Organisms Act 1996, sworn 25

February 2020.

[3] The application was accompanied by an application for enforcement orders, the

corresponding notices of application for both sets of orders and a memorandum of

counsel for the Council, G J Mathias, dated 26 February 2020.

Background

[4] The land to which the application relates is located at 77 Allis Bloy Place, Marsden

Point, Whangarei and is legally described as Lot 5 DP 436718 'and contained in Record

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of Title 536419 (the site). The first respondent, Sustainable Solvents Group Limited

(SSGL) is the registered proprietor. The third respondent, Brian Thomas Smith, is the

sole director of SSGL and owns half its shares. The second respondent, Sustainable

Solvents Limited (SSL) is the operator of the solvent recycling plant and Mr Smith is the

sole director and shareholder of that company.

[5] On 9 June 2008 the Council granted a resource consent to Sustainable Waste

Management Limited to store up to 50,000 litres of solvents and chemicals in conjunction

with the operation of a plant designed to recycle solvents on Lot 2 DP 20672 at Marsden

Point Road, Ruakaka. The owner of that land at the time was JD & RM Keith Trustees

Limited. Lot 2 DP 20672 was subsequently subdivided and the area to which the

resource consent applied became Lot 5 DP 436718 with an address of 77 Allis Bley

Place. That lot was transferred to SSGL on 28 September 2011.

[6] There does not appear to have been any specific transfer of the resource consent

from Sustainable Waste Management Ltd to any of the respondents, but there need not

be. Section 134 RMA provides that land use consents attach to the land to which they

relate and may be enjoyed by the owners and occupiers of the land for the time being,

unless the consent expressly provides otherwise.

[7] Separate consents were granted by the Northland Regional Council (NRC) to

Sustainable Waste Management Ltd for discharges to air associated with composting of

green waste and other organic material in March 2005 and for discharges to air arising

from the recycling of solvents in March 2008. These two discharge permits were

transferred to SSL under s 137 RMA on 4 May 2011. The air discharge permit for

recycling solvents expired on 30 May 2018 but an application to replace it was made on

23 September 2017 and so it remains in effect pursuant to s 124 RMA. The application

for a new air discharge permit is on hold under s 92 RMA.

[8] No resource consents have been granted by the NRC to any of the respondents

in respect of discharges onto land or into water.

[9] In December 2014 the NRC began investigating the site in response to

complaints that hazardous waste was being disposed of. NRC found that part of the site

was contaminated and that Mr Smith was aware of that contamination. On 8 January

2015 Worksafe New Zealand issued a compliance order to SSL requiring that no further

hazardous substances be brought onto the site. On 17 January 2015 NRC engaged

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consultants to investigate the site. That investigation found land and groundwater

contamination by solvents and industrial chemical waste on the site and on adjacent

land.

[1 OJ The fourth respondent, Solvent Services NZ Limited (SSNZL) was incorporated

in March 2015. The fifth and sixth respondents, John Manus Pretorius and Aaron

Geoffrey Baldwin respectively, are the directors and equal shareholders of that company.

[11 I On 1 April 2015 SSNZL, SSL and SSGL entered in to a business lease and

purchase option agreement whereby SSNZL would provide operations and management

staff to undertake the business operations previously undertaken by SSL and the parties

would work towards the eventual acquisition by SSNZL of the assets of SSL and related

entities and the remediation of the site.

[12) As a result of prosecutions initiated by NRC, on 27 January 2017 SSGL, SSL and

Mr Smith were convicted of offences under s 338(1 )(a) RMA in respect of contraventions

of S 15(1)(b) and (d) RMA relating to discharges of contaminants onto or into land in

circumstances which may result in that contaminant (or any other contaminant

emanating as a result of natural processes from that contaminant) entering water and

from any industrial or trade premises onto or into land. Their sentences included the

making of an enforcement order under s 339(5) RMA dated 2 February 2017 which

required them, among other things:

(a) To pay to the NRC the nett proceeds of the sales of the property owned by

SSGL and of SSL's business, up to a maximum of $214,146.11, to NRC for

the estimated costs of an Environmental Site Assessment Works Programme

and the fees of NRC's consultants in preparing that programme;

(b) To deal with all of the solvent wastes and containers by redistilling the waste

on-site or disposing of the waste to an approved facility or both by 31

December 2017; and

(c) To provide written reports to NRC by 1 May 2017, 1 August 2017 and 1

November 2017 on the steps taken to comply with the order to redistill or

dispose of the waste.

[13) The sales of the property and the business never occurred.

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[14] On 19 May 2017 NRC inspected the site and found hazardous substances stored

on unsealed land, no secondary containment and a pump located outside the bunded

stormwater collection sump with indications that untreated contaminated stormwater had

been pumped onto land outside the bunded area. NRC issued an abatement notice to

SSGL and Mr Smith on 25 May 2017 requiring them by 27 May 2017, among other

things, to cease storage of wastes, hazardous substances and chemicals on any

permeable surface and on impermeable surfaces not having secondary containment and

not to permit any additional wastes, hazardous substances or chemicals onto the site

until complying storage was provided.

[15] A further inspection of 15 June 2018 showed there to be approximately 1,000,000

litres of solvents and chemicals at the site, with waste still stored on unsealed ground or

with no secondary containment, contrary to the abatement notice. The Council, NRC,

Worksafe and the EPA all expressed their concerns to all six respondents. Worksafe

brokered a mediation in September 2018 at which a settlement agreement was reached.

SSGL, SSL, SSNZL and the Council were among the parties to the agreement. For the

purposes of this decision, relevant parts of the agreement include:

i) A recital that approximately 1.1 million litres of solvents and other waste

materials were held on the site in breach of health and safety, resource

management and regulatory consents;

ii) Agreement that SSNZL was liable to remove 500,000 litres of solvents from

the site within ten to twelve months of the date of the agreement and that

SSGL was liable for the removal of 600,000 of solvents within 18 months of

the date of the agreement;

iii) Agreement that SSNZL and SSGL would be liable, half each, for the removal

of contaminated waste water on site within three months of the date of the

agreement.

[16] The removal of solvents and contaminated wastewater was not achieved. Some

material may have been removed, but the amount remaining is still far in excess of the

amount permitted. Further, the conditions in which the material is kept on the site falls

far below any appropriate standard. Photographs attached to the affidavits of the

witnesses clearly show a site in a poor state. Mr Bailey in his affidavit presented a risk

assessment report dated January 2020 which concludes that flammable liquids and

ecotoxic substances are being stored on the site, including on unsealed ground outside

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the site's bunded areas and that these present risks to groundwater and to local

infrastructure and public health in the event of a fire.

[17] It appears that the fourth, fifth and sixth respondents are no longer present in any

way. Mr Mathias told me that the Council has had no contact with them since they left

the site in September 2019. Mr Mathias also told me that there is little if any activity

presently at the site.

[18] Mr Smith has been in contact with Mr Dall who annexed to his affidavit a copy of

an e-mail message sent on 2 February 2020. In that message Mr Smith said that because

of SSNZL's failure to complete their obligations under the settlement agreement, he was

unable to honour his part of the agreement. Mr Smith also acknowledged that the site

was in a very dangerous situation given the height of water in the bund, that he had been

informed that court action would be taken against him and that he had no funds to defend

himself or to complete the clean-up.

[19] Attached to that e-mail message was a three-page letter and a copy of the

settlement agreement dated 28 September 2018. In the letter, Mr Smith refers to a

number of things which generally indicate that he blames SSNZL and its directors for the

present situation.

Orders Sought

[20] The orders sought by the Council are, in summary, to require the respondents:

i) To cease the storage of hazardous substances in excess of 50,000 litres on

the property;

ii) To engage a suitably qualified and reputable person:

(1) to undertake a risk assessment prior to any works;

(2) to undertake sampling of the hazardous substances to determine their

exact type and nature;

(3) provide an inventory of all hazardous substances to the Council;

(4) to ensure that all hazardous substances on the property are securely

stored; and

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iii) to cease storing hazardous substances outside of the containment bund on

the property.

Grounds for Orders

[21] The interim enforcement orders are sought on the following bases as set out in

the application and the supporting memorandum:

i) The use of the site contravenes Rule 42.3.2 of the Whangarei District Plan

relating to the storage of hazardous substances in breach of s 9(3)(c) RMA;

ii) The use of the site is not in accordance with the resource consent granted by

Whangarei District Council permitting the storage of up to 50,000 litres of

solvents and chemicals in conjunction with the operation of a plant designed

to recycle solvents;

iii) The use of the site results in discharges of contaminants from industrial or

trade premises into water and onto land in circumstances which may result in

that contaminant (or any other contaminant emanating as a result of natural

processes from that contaminant) entering water without lawful authority in

breach of s 15(1)(b) and (d) RMA;

iv) The first, second and third respondents are in breach of the enforcement

order dated 2 February 2017;

v) The use of the site is or is likely to be noxious, dangerous, offensive, or

objectionable to such an extent that it has or is likely to have an adverse effect

on the environment;

vi) Action is required by the respondents to do something necessary to require

compliance with the resource consent, the rules of the district plan and the

RMA and to avoid, remedy, or mitigate any actual or likely adverse effect on

the environment caused by or on behalf of that person.

Evidence in Support

[22] The Council relies on the affidavit evidence listed at [2] above. The background

as summarised above is drawn from these affidavits.

[23] The evidence is notable as being given by officers of three separate agencies.

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The evidence supports the grounds for the application. I find the evidence to be .

consistent and credible.

[24] While the e-mail message and attached letter from Mr Smith are hearsay

statements, they· are not inadmissible for that reason alone. This Court has a broad

power to receive any evidence that it considers appropriate under s 276 RMA. While this

Court is not bound by the rules of law that apply to judicial proceedings (s 276(2) RMA),

in this case I am satisfied in terms of ss 17 and 18 Evidence Act 2006 that I can be

reasonably assured that the statements are reliable and that undue delay would be

caused if Mr Smith were required to be a witness. I have taken that evidence into

consideration on that basis.

Making an interim enforcement order

[25] This Court's authority to make an interim enforcement order is conferred by

s 320 of the Act, which states:

320 Interim enforcement order

(1) Except as provided in this section, the provisions of sections 314 to 319

apply to the application for, and determination of, an interim enforcement

order.

(2) If an Environment Judge or a District Court Judge considers it necessary

to do so, the Judge may make an interim enforcement order-

(a) without requiring service of notice in accordance with section 317;

and

(b) without holding a hearing.

(3) Before making an interim enforcement order, the Environment Judge or

the District Court Judge shall consider-

(4)

(a) what the effect of not making the order would be on the

environment; and

(b) whether the applicant has given an appropriate undertaking as to

damages; and

(c) whether the Judge should hear the applicant or any person against

whom the interim order is sought; and

(d) such other matters as the Judge thinks fit.

The Judge shall direct the applicant or another person to serve a copy of

the interim enforcement order on the person against whom the order is

made; and the order shall take effect from when it is served or such later

date as the order directs.

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(5) A person against whom an interim enforcement order has been made

and who was not heard by a Judge before the order was made, may

apply, as soon as practicable after the service of the order, to an

Environment Judge or a District Court Judge to change or cancel the

order; and, after hearing from the person against whom the interim

enforcement order was made, the applicant, and any other person the

Judge thinks fit, the Environment Judge or the District Court Judge may

confirm, change, or cancel the interim enforcement order.

(6) An interim enforcement order stays in force until an application for an

enforcement order under section 316 is determined, or until cancelled by

an Environment Judge or a District Court Judge under subsection (5), or

cancelled by the Environment Court under section 321.

Grounds for making an interim order ex parte

[26] Under s 320(2) RMA, an application for an interim enforcement order may be

made without notice to the person against whom it is sought (which is what ex parte

means) and without holding a hearing. These provisions reflect the possibility that the

need for action to deal with a contravention of the RMA may be so urgent that the usual

requirements for notice and a hearing could result in greater environmental damage. The

issue is whether such risk outweighs the general desirability of adherence to the usual

procedure of a court and the principles of natural justice, including in particular hearing

both sides to a case before making an order affecting the rights and interests of a party.

[27] To guide the exercise of this significant discretionary power, it is useful to remind

oneself of the fundamental principles. It is a significant matter to ask a Court to make an

order against a person who knows nothing about it until they are served with it. If an

applicant proceeds without notice to the other party, the Court will expect the application

to fully disclose, in the affidavits and in the memorandum of counsel, all relevant aspects

of the case including any that might be to the disadvantage of the applicant or otherwise

might count against the grant of the application. This is a duty of candour attaching to

the applicant and also to counsel presenting the application. Counsel's duty is as an

officer of the Court and therefore prevails over the usual duty to their client.

[28] In considering an application for an interim order, whether on notice or not, the

issue is whether there is a sufficient basis on which to make an order before there has

been a full hearing, including the opportunity to test the evidence through cross­

examination. Section 320(3) RMA sets out specific matters that must be taken into

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account by the Court as well as such other matters as the Judge thinks fit. That broad

provision must be employed on a principled basis and the Environment Court has

adopted, in general, the approach of the civil courts of New Zealand to the granting of

interim injunctions: the Court will normally require the applicant to demonstrate that they

have at least an arguable case on a serious question, that the balance of convenience

is in favour of making the order sought rather than not making it, and that the overall

interests of justice require an order to be made.1

[29] In his memorandum accompanying the application, counsel for the Council

summarised the Council's case in support of the application. I have found that summary

helpful in my analysis. I am satisfied that there is a threat to the environment that requires

urgent attention. Further, counsel submitted that the orders sought were limited to

stopping the activity, taking stock of what is on the site and doing what is necessary to

stabilise the solvents and other chemicals to protect the environment pending a full

assessment, in the context of the application for permanent enforcement orders of what

should be done to remedy the existing situation. I am also satisfied that the orders sought

would not prejudice any consideration of any such remedial steps.

Review of Application and Judicial Conference

[30] On receipt of the application on 2 March 2020 I reviewed the papers. At 9 am on

3 March 2020 I convened a judicial telephone conference with Mr Mathias. I did so for

two principal purposes:

i) To confirm what recent communication, if any, the Council or he had with any

of the respondents; and

ii) To clarify whether the orders sought were limited to maintaining the status

quo and investigating the situation or went further in requiring immediate

action to remedy the situation.

[31] As a result, the Council filed an amended application in which some of the orders

sought were limited to maintenance of the status quo.

1 Berhampore Residents Assn Inc v Wellington City Counc/1 (1992) 1 NZRMA 41; Gulf District Plan Assn Inc v Arraw Properties Ltd Decision No. A 129/02; Friends of Sherwood v Auckland Council [2018] NZEnvC 178.

J

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Evaluation

[32] I am satisfied that it is necessary to make interim enforcement orders. I accept

the evidence as sufficient to . demonstrate a strong arguable case that the solvent

recycling plant is operating well beyond the scope of its resource consent and in a

manner that contravenes the District Plan and the RMA. In light of this evidence it is

appropriate to make orders that will prevent further non-compliance, limit the risks

associated with the hazardous and contaminated materials and at least contain the

extent of adverse effects on the environment resulting from contraventions of the Act.

The orders sought respond directly to the enforcement issues which are apparent from

the evidence and are generally framed in appropriate terms.

[33] The one amendment I will make to the orders sought is to reword the first order

so that it prevents further hazardous substances from being brought onto the property.

In my view, an order requiring the respondents to cease the storage of hazardous

substances in excess of 50,000 litres could be read as requiring the excess to be

removed immediately. On the evidence, this could be a very large volume of hazardous

substances and should not be attempted until the risk assessment and sampling have

been done and the inventory provided to the Council.

[34] I consider that all six respondents should be subject to the orders. The evidence

shows that all three companies bear at least some responsibility for what has occurred

or not occurred on the site in recent years. It is appropriate for the directors and

shareholders also to be subject to the same orders so that the people who control and

own the companies are accountable in the same way.

[35] The orders should be made against the respondents jointly and severally. It does

not appear from the evidence that there is any significant disparity in their responsibility.

It does appear that there may be disputes among the respondents as to who should be

blamed for the present situation. It should not fall to the Council, in attempting to deal

with the adverse effects of what the respondents have done or not done also to have to

try and apportion liability among the respondents.

[36] There do not appear to be any countervailing circumstances in the evidence to

set against such contraventions of the Act.

[37] I accept the evidence of potential or future adverse effects should interim orders

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not be made. Considered against the effects of making interim orders, I find that the

balance is clearly in favour of avoiding, remedying or mitigating such effects by making

the orders sought.

[38] In relation to the giving of an undertaking as to damages, counsel for the Council

submits that it is reasonably well settled2 that an undertaking as to damages may not be

necessary where the applicant is:

(a) protecting public, rather than private, interests;

(b) a consent authority performing a regulatory role; or

(c) unquestionabl~ financially capable of meeting any award of damages.

[39] I accept the submission that all three of those grounds are applicable in this case.

I do not consider that the Council is required to provide an undertaking as to damages.

[40] In relation to whether it was necessary for the respondents to be served with

notice of the application or for a hearing to be held, I am satisfied that proceeding on an

ex parte basis is appropriate in the circumstances of this case. The collapse of the

settlement agreement and the evidence that SSNZL and its directors are no longer doing

anything to address the problems with the site is a strong ground for not waiting to hear

from them. Mr Smith's communications with Mr Dall strongly indicate that little if anything

would be gained from hearing from Mr Smith or his companies.

[41] If any respondent does wish to address the Court and seek a change to or

cancellation of the orders, then under s 320(5) RMA they have the right to be heard.

[42] Under s 320(3)(d) RMA I have considered the Council's request that the Court

give consent under s 315(2) RMA to the Council complying with the orders on behalf of

the respondents. The guidance available o.n the exercise of the power in s 315 is

relatively modest. Two principles are reasonably clear:

i) It is generally not appropriate to assume that a respondent will not comply

with an enforcement order, meaning that consent under s 315 would ordinarily

Relying on: Dunedin City Council v Saddle Views Estate Ltd [2015] NZEnvC 24 at [15]; Palmerston North City Council v Golf City Developments Ltd [2014] NZEnvC 264 at [11]; Waikato Regional Council v Cox A045/98 (EnvCt); Auckland Council v Chen Hong Co Ltd [2016] NZEnvC 171 at [9-10]; and Auckland Council v Mao [2016] NZEnvC 188 at [13].

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be withheld until there is evidence of a failure to comply;3 and

ii) Contemporaneous anticipatory consent can be appropriate in certain

circumstances, such as where there have been difficulties with compliance,

effectively displacing the presumption of compliance4 or in cases where there

is an urgent need for implementation of the enforcement orders.

[43] The evidence indicates significant previous compliance problems as well as an

urgent need for the site to be brought under control. The balance is clearly tipped in

favour of giving such anticipatory consent. In order to afford the respondents an

opportunity to take control themselves or to raise any issue about the orders, I will provide

a period of ten working days in which the respondents or any of them may do so. If,

however, they or any of them indicate sooner than that that they are not able to comply

with the orders (and in particular if Mr Smith so indicates), then the Council may intervene

immediately.

[44] For those reasons, within the discretion conferred by s 319 RMA and in

consideration of all the relevant matters set out in ss 314 - 320 RMA, under s 320 RMA

I make the interim enforcement orders set out at the beginning of this decision against

the respondents and give consent to the Whangarei District Council under s 315 RMA in

respect of those orders.

[45] As required by s 320(4), I direct the Council to serve the respondents and direct

that the orders shall take effect from when they are served.

[46] Costs are reserved.

For the Court:

D A Kirkpatrick Environment Judge

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4 Auckland Regional Council v Dorn Decision A76/92 (PT). Hamilton City Council v McQuade Decision A121/2001 (EnvCt); Whangarei District Council v Montreal W94/92 (PT); Waitakere City Council v Gordon A13/93 (PT).