The man told the council he was just using the digger to remove leftover construction materials, but the council's investigation found he was trying to make a pond.
Reminiscent of popular New Zealand children's story The Little Yellow Digger, he then brought in further heavy machines and equipment to try to free the digger.
The council said this only added to the damage he had already done to the environment.
Council investigations manager Patrick Lynch said wetland needed to be looked after so the diverse bird, plant and fish life could be protected.
"Human activity is the biggest threat to any wetland and people simply cannot go in there with 20 tonne diggers destroying habitats."
In 2013 a farmer received a formal warning for digging a duck pond north of Waitakaruru.