Frankton and the Kawarau River outlet from Lake Wakatipu, in the area where raw sewage entered the river.

The Queenstown council has been fined $37,500 for discharging raw sewage into the protected Kawarau River and criticised for systems that allowed it to happen.

The prosecution was brought by the Otago Regional Council and heard by Environment Judge Brian Dwyer in the Queenstown District Court in December.

The judge's written decision said the Queenstown Lakes District Council pleaded guilty to discharging contaminants to land that then entered water.

It said a jetboat driver on the Kawarau River, near Frankton, smelt the sewage on February 20, 2017.

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He smelt it again the next day, investigated and found discoloured water entering the river.

"There were solids and paper particles floating in the water," the judge said.

The material was found to be entering the river through a blocked district council stormwater drain.

"It appears that the wastewater system had been deliberately designed and constructed by the district council so that any overflow of wastewater would go into the stormwater system," Judge Dwyer said.

About 43 cubic metres of material was discharged over about two days.

It was stopped within two hours of being discovered and a disinfection process was carried out, but wastewater residue and sludge remained on the riverbank until May, the judge said.

"[The] three-month delay on the part of the council in cleaning up . . . shows a very casual attitude to this incident."

The river is subject to a water conservation order and is required to be managed to "contact recreation standards". It is also part of a landscape greatly valued by tangata whenua.

The discharge of sewage into rivers was culturally offensive to Māori and the wider New Zealand public, Judge Dwyer said.

"This was a discharge into a highly sensitive environment from any number of perspectives."

There was a swimming hole 50 metres downstream from the discharge. Faecal coliforms there were 3.6 times higher than the guideline level and were a risk to swimmers and recreational users.

Judge Dwyer said he was particularly concerned that the system was deliberately engineered so that overflow from the sewerage pipes entered stormwater pipes.

"Council is now trying to eliminate these situations and has apparently put in substantial effort to improve its wastewater systems over the last three years," he said.

The system reflected past attitudes rather than the district council's current attitude, but was was considered a deliberate discharge as it was predictable.

The district council had received four past infringement notices for wastewater discharges, the judge said when setting a penalty of $37,500.

He said some portion of the fine could be paid to an environmental project or organisation in the Queenstown area, at the discretion of the regional council.