Knowledge, permission and agency: New decision clarifies law on supervising offending under the RMA

Otago Regional Council v Simpson [2025] NZDC 20360

Background

This case concerns a successful application to dismiss charges on the basis that there was no case to answer, under section 147 of the Criminal Procedure Act 2011. Judge Steven delivered an oral decision on the application.

In April 2022, Mr Simpson (a director of the company responsible for the alleged offending) supervised an employee in clearing two waterways of debris that had resulted in flooding. Mr Simpson and his company were charged under section 13 of the Resource Management Act 1991 (RMA) on the basis that they had disturbed the bed of two tributaries of the Friston Stream when the disturbance was not expressly allowed by a national environmental standard, a rule in a regional plan or proposed plan, or a resource consent. Mr Simpson believed the waterways were farm drains, rather than a “river” for the purposes of section 13 of the RMA.

 

How the charges were framed

The Court expressed that it was not clear on what basis the prosecution argued that liability was “sheeted home” to Mr Simpson. The prosecution opened on the basis that Mr Simpson disturbed the stream or permitted the disturbance. However, the Court noted the charge was framed on the basis that Mr Simpson himself disturbed the stream, rather than permitted the disturbance.

The application was made on the basis that the evidence led by the Council was that someone else (a digger operator known only as “Steve”) actually carried out the excavation of the material in the two waterways. On that footing, the case against Mr Simpson for physically carrying out the excavation himself had to be discharged or dismissed.

 

The Court’s focus on director liability and knowledge

The Court raised with defence counsel the prospect that the Council could be sheeting home liability to Mr Simpson through section 340(3) of the RMA on the basis that Mr Simpson was a director of a company which was also charged with disturbing or permitting disturbance of the two identified tributaries. The Court also noted that section 340 was not identified in the charging document or in the prosecution’s opening submissions, but acknowledged this was not necessarily fatal to the prosecution, confirming the position that vicarious liability under section 340 is not a separate offence.

The Court stated that the offence was established under section 338 of the RMA, and section 340 operates in tandem with section 338 in supplementing and codifying the common law of vicarious liability. The prosecution confirmed during proceedings that it was arguing Mr Simpson had procured the offence, for example by overseeing the offending.

Under section 340(3) of the RMA, a director of a company can be guilty of the same offence as the company if:

1. the act or omission that constituted the offence took place with their authority, permission or consent; and
2. they knew, or could reasonably be expected to have known, that the offence was to be or was being committed, and failed to take all reasonable steps to prevent or stop it.

The Court found that the way the prosecution framed the case meant that cases relating to “permitting” offending were relevant. The Court referred to the Waikato Regional Council v Hillside Ltd (Crafar Farms) decision, which is often cited in relation to knowledge and agency.

The prosecution led evidence about Mr Simpson’s supervisory role However, crucially, a regional council officer had visited the property and stated that the relevant waterways were farm drains. In an evidential interview, when asked whether he would have acted differently if he knew they were waterways, Mr Simpson stated “I wouldn’t have touched it probably if I knew.”

The prosecution submitted the offending was a strict liability offence and, on that basis, knowledge as to whether the actual disturbance of the bed constituted an offence was not necessary. The Court did not accept that reasoning, citing Auckland Council v Wung Weng Jung, as follows:

“it is not sufficient to prove beyond reasonable doubt that a defendant must merely be aware of a lawful activity taking place, the prosecution must prove beyond reasonable doubt that the defendant was aware that the activity was or was about to exceed the limits for that activity and had failed to prevent it.”

On this basis, the Court concluded that because Mr Simpson did not know that it was the bed of a stream being disturbed, he did not know an offence was being committed by his employee and he did not have the requisite knowledge to be found guilty of the offence. The application to dismiss charges was granted.

 

Why this case matters

The decision highlights the importance of a thorough approach to establishing liability where the person who did not actually carry out works is being charged. When initiating a prosecution, it is crucial that the legal elements required to establish liability are clearly identified, and that the required elements are established by evidence.

Further, the case demonstrates an ongoing trend of courts looking more closely at knowledge and intention when establishing liability.