The Marie Stream was muddied and laden with sediment after an earthworks discharge in April 2017, much to the dismay of residents who reported it to the Nelson City Council.

Contractors developing a large Nelson retirement village have been fined $90,000 for "gross pollution" of a stream.

At an Environment Court hearing in Nelson, Judge Brian Dwyer said sediment from earthworks discharged into Maire Stream meant the population of indigenous banded kokopu had sharply declined and may not recover.

He described the contractors' management of sediment from the Tasman Heights site as "appalling".

"It's common ground this offending involved gross pollution of an important habitat of banded kokopu," he said.

The species of whitebait, along with longfin eels, previously had a significant habitat in the Tahunanui stream.

Directors for KB Quarries and KB Contracting and Quarries earlier pleaded guilty to charges brought under the Resource Management Act which related to three specific instances where sediment-laden water was discharged from two earthworks treatment ponds into the stream.

READ MORE:

*Earthworks send sediment up the creek

*Earthworks lay foundations for $125m retirement village in Nelson's Port Hills

*World record duckling brood makes a splash in Nelson creek

The companies, which share registered offices in Christchurch, were managing earthworks to develop a 15.9 hectare retirement village development.

At sentencing on Thursday, Judge Dwyer said there were other suspected instances outlined in a summary of facts which indicated the agreed discharges on which the charges were based were the "tip of the iceberg".

He said there had been obvious ongoing site management failures.

Nelson City Council It's not known if a banded kokopu whitebait habitat in a Nelson stream will recover after pollution from earthworks.

It was hard to determine which sediment discharges had caused what damage and what the long-term effects would be.

"What we do know is this, a stream which was found to be an important habitat for banded kokopu in 2012 and 2014 is no longer, and may or may not recover, and the sediment laden waters were observed well down the stream in close proximity to the [Waimea] estuary," Judge Dwyer said.

He rejected the defendants' submissions, made by lawyer Brian Nathan, that some of the sediment could have come from another source.

"Nothing in the material put in front of me establishes with any degree of credibility, on the balance of probability or otherwise, there is some other source of the sediment that has got into Maire Stream other than the defendants' ponds."

He found the offending to be serious and the protection of indigenous fauna of "national importance".

"The offending was the culmination of an ongoing situation of appalling management of sedimentation discharges by the defendants which commenced within only weeks of resource management being granted,"

Nathan said the offending hadn't been deliberate and the defendants tried to address matters brought to their attention by Nelson City Council officers along the way.

The defendants had sought expert advice on sediment management. It hadn't been a situation where they'd been "running amok", and there had been times when the site had been compliant.

"I accept that it's still the defendants' problem if the experts haven't got it right, but the reason I make that submission is it's still significantly better than the defendant who has, in a reckless manner, driven their digger into a paddock to clear out a stream with no expert advice," Nathan said.

MARION VAN DIJK/STUFF Earthworks for the Coast View Retirement Village began in 2016, but were halted when run-off made its way into the Maire Stream. It resumed when works became compliant.

On behalf of the council, lawyer Antoinette Besier said prosecution had been a "last resort" and officers had tried to achieve compliance through correspondence before charges were laid.

The judge accepted that while the offending wasn't deliberate, the degree of carelessness was so high it made the difference between accidental and deliberate discharges "almost meaningless".

The defendants acknowledged the development of the site happened at a much faster pace than was appropriate for their stormwater controls.

"This was a large development on a challenging site," Judge Dwyer said.

"That meant the developers had to take particular care to see that things were done properly. They failed to meet that obligation."

He said the issue of deterrence was important, and profits should not come at the expense of the environment.