It could stand as a textbook case of negative externalities, with those gaining the benefit seeking to have others carry the costs. Gisborne foresters want to deflect liability for damage caused by slash eroding watercourses and littering beaches following extreme rainfall four years ago. To date, attempts by Samnic Forest Management directors to avoid personal liability have had little support in the courts.
Torrential rain and flooding on the North Island east coast in 2021-2022 damaged roads and bridges as logging debris scoured out riverbanks and backed up against bridges.
This followed earlier instances of forestry slash being washed up on beaches at Tokomaru and Tolaga Bays nearly ten years earlier.
Gisborne District Council has been very critical of forestry management in general on the East Coast. Clean-up costs following poor logging practice fall on ratepayers. They bear the costs, but do not share in logging profits.
Gisborne District took legal action against Auckland-based Samnic Forest Management Ltd and Gisborne-based Forest Management Solutions Ltd for Resource Management Act offences in failing to properly contain slash, debris and sediment on its 940 hectare pine forest near Tolaga Bay. Collectively, the two companies were fined $126,000.
Separately, Gisborne District tool legal action in the Environment Court to recover costs of remedying flood damage.
Owner of the forested-land, Woodlett Investments Ltd, accepts liability, but claims Samnic Forest should be paying most of the cost. Samnic was responsible for managing the forest, it says.
Samnic Forest denies all liability. It has handed back management responsibility for the forest to Woodlett as the landowner; it is now Woodlett’s problem it says.
Samnic directors Gavin Fortune, Scott Funnell and Richard Hayes strongly dispute any personal liability.
They have appealed an Environment Court ruling holding them personally liable for clean-up costs.
As far back as 2017, they were served with resource management abatement notices requiring improvements to management of logging waste.
Currently, they are resisting an Environment Court order that they pay personally for the first stages necessary to make good damage incurred: a land remediation plan; requiring a risk assessment map and a risk assessment plan.
Woodlett Investments has lodged its proposed plan with Gisborne District.
The three Samnic directors say they need not do likewise: they no longer manage the forest, the ‘huge cost’ would cripple them financially and it is a breach of natural justice in that their company Samnic Forest Management has already been fined.
There was evidence that the required risk assessment plan would cost about $30,000.
Justice MacGillivray said the directors had provided no evidence of their supposedly strained financial position.
Ownership of Samnic Forest Management is concealed behind a nominee shareholding controlled by Dilkhush Harry, a director of Dinu Harry Chartered Accountants Ltd in Auckland.
Justice MacGillivray refused to place a hold on Environment Court enforcement orders.
These orders are being appealed, but are still enforceable pending the appeal outcome, he said.
No remediation work need start before this appeal is decided, he said. The extent of directors’ personal liability will then be clarified.
Gisborne District Council v. Samnic Forest Management Ltd – District Court (1.08.24) & re an appeal by Samnic Forest Management Ltd – High Court (9.09.25).
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