Circelli v Mulhern's Waste Oil Removal Pty Ltd
[2010] SASC 116
•28 April 2010
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court)
CIRCELLI v MULHERN'S WASTE OIL REMOVAL PTY LTD
[2010] SASC 116
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Anderson and The Honourable Justice Layton)
28 April 2010
ENVIRONMENT AND PLANNING - POLLUTION - WASTE DISPOSAL - OFFENCES - PENALTY
Offences against s 79(2) and s 45(5) of the Environment Protection Act 1993 (SA) - respondent pleaded guilty to all ten counts - offences in two groups - reconsideration of penalty.
CRIMINAL LAW - SENTENCE - RELEVANT FACTORS - TOTALITY - GENERAL PRINCIPLES
Application for permission to appeal and appeal from judgment of single judge of this court - judge reduced penalties applied by ERDC judge - judge held that penalties were manifestly excessive and that double punishment had been applied - application granted - merits of the appeal considered - whether ERDC judge had regard to the totality principle - whether double punishment was applied by ERDC judge in respect of same offensive conduct - whether there was an error in the ERDC judge's exercise of discretion under s 18A of the Criminal Law (Sentencing) Act 1988 (SA) - whether penalties applied by ERDC judge were manifestly excessive - whether weight given to mitigating factors by ERDC judge was appropriate.
Held: appeal allowed - orders set aside - penalties imposed by judge of this court failed to reflect the seriousness of the offending and the need for general deterrence and were manifestly inadequate - judge's finding that ERDC judge doubly punished in respect of counts 1 and 9 upheld - penalty imposed by ERDC judge in respect of count 1 was manifestly excessive - judge of this court erred in finding double punishment in respect of counts 1 and 8 - in respect of counts 1, 8 and 9 a penalty of $155,000 fixed to reflect principles of specific and general deterrence - in respect of counts 2 to 7 and 10, penalties imposed by ERDC judge reinstated.
Environment Protection Act 1993 (SA) s 45(5) and s 79(2); Criminal Law (Sentencing) Act 1988 (SA) s 18A, referred to.
Circelli v Mulhern's Waste Oil Removal Pty Ltd [2009] SAERDC 17; Mulhern's Waste Oil Removal Pty Ltd v Circelli [2009] SASC 353; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; House v The King (1936) 55 CLR 499; Piva v Brinkworth (1992) 59 SASR 92, considered.
CIRCELLI v MULHERN'S WASTE OIL REMOVAL PTY LTD
[2010] SASC 116
DOYLE CJ: I agree with the orders proposed by Anderson J and with his reasons. There is nothing that I wish to add.
ANDERSON J:
Introduction
This is an application for permission to appeal from a decision of a single judge of this Court. That judge heard an appeal from a decision of a judge of the Environment Resources and Development Court (“the ERD Court”). I will refer to the judge of this court as the appeal judge, and I will refer to the judge of the ERD court as the ERD judge. The court decided to hear full argument from the parties on both the question of permission to appeal and the merits of the appeal, and reserved its decision on both. The question of permission to appeal was referred to this Court by a differently constituted court.
At the outset of the hearing there was also an application by the appellant for an extension of time for the lodging of the appeal. After hearing brief submissions from the appellant, the application for an extension of time was granted by the court.
The ERD judge imposed penalties for admitted offences and breaches by the respondent in relation to ten counts contained in an information and summons dated 31 October 2008. The appeal from the ERD judge complained that the penalties imposed were excessive.
The first of those counts was a minor indictable offence of polluting the environment and causing serious environmental harm contrary to s 79(2) of the Environment Protection Act 1993 (“the Act”). The balance of the counts were summary offences relating to breaches of certain conditions attached to the EPA licence issued to the respondent, contrary to s 45(5) of the Act. The offences all related to breaches by the respondent in respect of its premises at Largs North.
The appeal judge, after hearing the appeal from the decision of the ERD judge, substantially reduced the penalties imposed by the ERD judge. The questions for this Court are whether the appeal judge was right to interfere and substitute different penalties, and if so, whether the substituted penalties imposed by the judge correctly reflected the gravity of the offending.
Background
The appellant, Mr Circelli, is an employee of the Environment Protection Authority.
The respondent, Mulhern’s Waste Oil Removal Pty Ltd (“Mulherns”), carries on the business of collecting various waste oils, including used cooking oils, engine oils and transmission fluid, from various businesses for a fee. The waste oils are collected and transported using vacuum pump trucks.
The waste oil is transferred from the vacuum trucks to tanks at Mulherns premises for storage awaiting treatment. Mulherns’ Largs North site has a 6.8 mega litre capacity tank and four concrete “Manacon tanks”. Each Manacon tank has a capacity of approximately 20,000 litres.
Treated oil is then on-sold by Mulherns.
To carry on such a business, a proprietor must be licensed under the Act. Mulherns holds Licence 2994.
Licence 2994 states that Mulherns must “store any substances that are not contained in the 6.8 mega litre tank, and which have the potential to cause environmental harm, in accordance with the Environment Protection Act guideline entitled “Bunding and Spill Management” (per Condition 12). Mulherns is also required to mark each container of waste with a description of the nature of the waste contained inside (per Condition 11).
At some point in 2007 Mulherns ceased to comply with Environment Protection Act guideline “Bunding and Spill Management”. One of the four Manacon tanks was not bunded or marked while waste oil was stored in it.
On 26 July 2007 an incident occurred during which 10,000 litres of oil escaped from a Manacon tank. The oil spill spread on adjoining land. This oil was subsequently cleaned up with no permanent damage to the land. Mulherns paid for the clean-up. The incident was caused by vandals. Counts 1, 8 and 9 arise as a result of this incident.
In 2008, after the spill, Mr Robert Richardson, then employed as Operations General Manager, was employed as Mulherns’ general manager. Mr Richardson made a statement describing “the history and nature of Mulhern’s business … and information in regard to the company’s activities [and] details of the directors and staff”: see Mulhern’s Waste Oil Removal Pty Ltd v Circelli [2009] SASC 353 at [22]. The statement gave details of amounts paid by Mulherns for remedial work done post-spill. It also referred to guidelines and procedures put in place post-spill.
As earlier mentioned, Mulherns pleaded guilty to all 10 counts. Mr Richardson’s statement was tendered by consent to the ERD court at the time of sentencing.
The ten counts charged were as follows:
Count 1Causing serious environmental harm contrary to s 79(2) Environment Protection Act 1993.
Counts 2 – 4Breaches of condition 1 of EPA licence by receiving waste water.
Count 5Breach of condition 1 of EPA licence by receiving unauthorised waste.
Counts 6 – 7 Breaches of condition 1 of EPA licence by receiving slurry.
Count 8Breach of condition 11 of EPA licence by storing oil in an unmarked tank.
Count 9Breach of condition 12 of EPA licence by storing oil in an unbunded tank.
Count 10Breach of condition 17 of EPA licence by failing to ensure that an employee driver was aware of EPA licence conditions that related to his responsibilities as an employee of Mulherns.
As I have said, counts 1, 8 and 9 are related to the incident of the oil spill. Counts 2 to 7 and 10 are not related to the offending in counts 1, 8 and 9.
The ERD judge summarised the two groups of offences in her reasons as follows:
[66]Essentially the offences fall into two groups. The first group contains those offences, the charges of which arose out of an incident that occurred on the night of 26 July 3007, namely the environmental damage resulting from the discharge of waste oil from an unbunded and unmarked storage tank. These are the 1st, 8th and 9th offences.
[67]The second group of offences contains those arising out of the course of conduct whereby unauthorised waste liquids were brought onto, and stored at the Elder Road site, over a period of some 6-7 months. These are the 2nd, 3rd, 4th, 5th, 6th, 7th and 10th offences all of which are breaches of conditions of the EPA licence 2994.
The ERD judge fined Mulherns $150,000 for count 1, $36,000 for count 8 and $67,500 for count 9. This was after a 25% discount for the guilty plea. This made a total penalty for those counts of $253,500. The ERD judge then further reduced that penalty for totality to $200,000. Her Honour sentenced for the three offences pursuant to s 18A of the Criminal Law (Sentencing) Act 1988.
With respect to counts 2 to 7 and 10, Mulherns was fined $333,000. This was after at 25% discount for the guilty plea. This was then further reduced to $260,000 for totality. Again, s 18A was used.
This made a total penalty of $460,000.
On appeal, it was submitted by Mulherns that the penalty in respect of each offence was manifestly excessive; each penalty subtotal imposed in respect of the two groups of offending was excessive; the ERD sentencing judge applied “double punishment” in respect to counts 1, 8 and 9; that Mulherns’ actions in mitigation were not given adequate weight; and proper regard was not given to the principle of totality.
The appeal judge agreed that s 18A had been properly invoked by the ERD judge. The appeal judge reduced the penalties for counts 1, 8 and 9 to a total of $75,000. He also reduced the penalties for counts 2 to 7 and 10 to $70,000. This made a total penalty of $145,000.
Grounds of appeal
In this case, there were three grounds raised by the appellant in the notice of appeal as follows:
1.That the appeal judge erred in interfering with the penalty imposed because:
(a) it was an error to find that the ERD Judge applied “double punishment” with respect to counts 1, 8 and 9;
(b) the ERD judge did in fact properly apply the principles in the Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683, namely, that sentencing is a matter for the judge’s discretion, and that in exercising that discretion a judge should have regard to any lasting harm, “totality” and “even-handedness”;
(c) the appeal judge failed to or failed to adequately take into account Mr Richardson’s role as a matter relevant to general deterrence.
In the alternative it was argued that:
2.The appeal judge’s re-sentencing was flawed because:
(a) the appeal judge failed to recognise Mulherns’ responsibility to manage its business in compliance with its obligations under its EPA licence;
(b) (i) the appeal judge gave excessive mitigatory weight to Mulherns’ post-spill remedial and improvement expenditure;
(c) the appeal judge failed to give detailed reasons for the factual basis for re-sentencing and consequently failed to express how “double punishment” had been avoided in the re-sentencing
3.As a result the penalty reached was manifestly inadequate having regard to the offending conduct.
The appellant did not pursue another ground in the notice of appeal, namely, 2(b)(ii).
Arguments in this Court
Ground 1(a) Double Punishment
The appellant argued that the appeal judge misconstrued the ERD judge’s remarks and that there was no double punishment. It was argued that counts 1, 8 and 9 were intertwined. That made it necessary, it was argued, for the ERD judge to consider the context and gravity of count 1 with reference to counts 8 and 9. It was argued that in her remarks the ERD judge demonstrated a clear and careful separation of assessments for each count. It was argued that the structure of the reasons is an indicator that the ERD judge treated the offences separately. It was argued that count 1 relates to the harm caused and the deliberate creation of risk, which is very different to the mere placing of oil in an unbunded tank.
The respondent submitted that the conduct in respect of counts 1, 8 and 9 contained common elements and conceded that to look at the conduct of the separate counts in isolation was an impossible exercise. However, it was submitted that Mulherns had been punished more than once for essentially the same conduct. It was submitted that Mulherns’ culpability for count 1 was substantially subsumed by counts 8 and 9. It was further submitted that the ERD judge referred to the conduct the subject of count 9 when assessing the penalty for count 1. The same submission was made for counts 8 and 1, although it was conceded that this was less clear.
It was also submitted that the extent of the penalties indicates that the ERD judge considered the environmental harm caused when assessing counts 8 and 9 and the breaches of licence as a circumstance of aggravation when assessing count 1.
It was further submitted that if there was double punishment that then entitled the appeal judge to sentence afresh.
Analysis
The appeal judge decided that the ERD judge, had doubly punished the appellant for both counts 8 and 9 because they related to the same subject matter as count 1.
It is my view that the appeal judge was correct in saying there was double punishment in respect of counts 1 and 9 but not in respect of counts 1 and 8. The ERD judge dealt with count 1 at [20] of her reasons as follows:
[20]Mulherns had waste oil stored in a Manacon tank contrary to its licence. The tank was unmarked and unbunded. Given the absence of bunding, environmental damage was always likely if there was serious damage to the tank or interference with the outlet pipe regulatory mechanism.
The ERD judge also said at [24]:
[24]In summary, although the deliberate act which resulted in the pollution was not the defendant’s act, Mulherns was culpable in that it had deliberately placed waste oil in an unbunded tank.
Her Honour then imposed a fine which amounted to 40% of the maximum fine for count 1. The maximum was $500,000. She then made a reduction of 25% on account of the guilty plea, making a total of $150,000 for count 1.
In relation to count 8, the ERD judge stated that it was related to count 1. The offending was the failure to mark the tank appropriately so as to identify the nature of the waste stored in the tank. Her Honour concluded that it was deliberate and imposed a penalty of 40% of the maximum. The maximum for that offence was $150,000. After a reduction of 25% for the guilty plea the total was $36,000.
In my view, the ERD judge appropriately dealt with count 8 by dealing with it separately to count 1 and by imposing an appropriate penalty. There is no doubt that the ERD judge was clearly conscious of the facts and circumstances relating to the first offence, and in my view the respondent was appropriately punished in relation to count 8. I do not consider there was any double punishment as between counts 1 and 8.
In relation to count 9, the ERD judge noted that the offending related to a breach of a condition of the EPA licence held by the respondent, namely, storing waste oil in an unbunded tank. Again Her Honour related the offending to the circumstances of count 1. She then imposed a penalty of 75% of the maximum penalty, which for that offence was $120,000. After a reduction of 25% for the guilty plea the total for count 9 was $67,500. The ERD judge said at [57]:
[57]The maximum penalty is $120,000. The consequences were particularly serious, as is evident by the charge of offending identified herein as the first offence.
Her Honour imposed a large penalty for count 9 which amounted to 75% of the maximum. The question is whether, in so doing Her Honour has punished the respondent twice for the same offending, that is, by the respective fines for counts 1 and 9, namely, $150,000 and $67,500 respectively. It seems that in the second sentence of [57] Her Honour took into account the consequences of the same conduct which she had already considered in count 1.
Count 9 was a serious offence because of its nature and because of the consequences. It was appropriate to impose a fine amounting to 75% of the maximum.
Count 1 related to pollution of the environment causing serious environmental harm, which was the same serious harm for which the respondent was punished in count 9. It seems that the respondent has been punished twice for the same offending. In the circumstances, I consider a fine of $150,000 for count 1 to be excessive.
The analysis by the appeal judge at [18] and [19] of his reasons is similar to the views which I have expressed except that His Honour also includes count 8 in the doubling up. In my view there is no doubling up in respect of count 1 and count 8 but there is in respect of count 1 and count 9.
In my view the appropriate penalty for count 9 is 75% of the maximum fine. Because of the fact that the penalties are for the same offending, I would reduce the penalty for count 1 to 25% of the maximum. I make the necessary adjustments later in these reasons.
I would therefore allow the appeal insofar as it relates to doubling up as between count 1 and count 8 as there was no basis for interference. I would dismiss the appeal in respect of doubling up in relation to counts 1 and 9 as I have found the ERD judge did in fact doubly punish in respect of counts 1 and 9.
Ground 1(b) Principles of Camilleri’s Stock Feeds case
The appellant argued that the ERD Judge exercised her discretion properly, and property applied the principles in Camilleri’s Stock Feeds. It was argued that the ERD Judge gave appropriate weight to the mitigating factors, being the expenditure in cleaning up the oil spill, money spent on bringing premises up to the standard required by the code, and in some cases improvements, and putting in new procedures.
It was argued that in Camilleri’s Stock Feeds post-incident expenditure was but one factor to be taken into account in assessing the seriousness of the offence. These were deliberate decisions to offend, motivated by commercial interests. It was argued that this mitigating factor must not be elevated to a point where it is allowed to prevail over other considerations such as general deterrence.
It was submitted that Mulherns’ expenditure was necessary to bring Mulherns into compliance with its licence obligations. The appellant submitted that it was difficult to separate what part of the $900,000 post-spill expenditure had been spent on compliance and what related to improvements but argued that approximately $600,000 had been spent on the Wing Street site (not the subject of the offences) and only $300,000 at Largs North. It was pointed out that a separate licence is granted for each premises.
It was argued that such post-spill expenditure is relevant to specific deterrence, and not general deterrence, rehabilitation, and an intention to comply with legislation in future. It was submitted that the ERD judge emphasised various mitigating factors, and that even though others might emphasise other matters, because it was in the exercise of a discretion, it did not warrant interference with the penalties, in accordance with principles in House v The King (1936) 55 CLR 499.
The respondent submitted that the appeal judge was correct in giving significant weight to the mitigatory factors. Counsel pointed out that Mulherns had no prior record of environmental, or any other offending. It was submitted that the improvement expenditure and systemic reform went further than merely evincing an intention to comply with the EPA, and that the ERD judge was wrong in that finding. It was submitted that the expenditure exceeded the EPA’s requirements and demonstrated that breaches were unlikely to occur in future. Mr Richardson’s affidavit was referred to in which he described new training for employees and environmental improvement programs.
It was submitted that the extent of the ERD judge’s penalty showed a failure to give due weight to the mitigating factors. Counsel submitted that contrary to the appellant’s submission, the appeal judge did not elevate mitigating factors above other considerations such as general deterrence. It was submitted that the post-spill remedial expenditure showed contrition and insight into the offending.
Analysis
The appellant submitted, correctly in my view, that the decision in Camilleri’s Stock Feeds, in particular per Kirby P at 700-701, has been elevated beyond its significance in relation to this matter by the appeal judge in his reasons for interfering with the decision of the ERD judge.
The ERD judge did consider Camilleri’s Stock Feeds and took into account the expenditure on improvements and the general revamping of the system of work following the incidents in question. The appeal judge considered that Her Honour did not give proper weight to those aspects in accordance with the decision in Camilleri’s Stock Feeds.
In particular the appeal judge relied on comments made in the statement by Mr Richardson relating to the costs of the remedial work. The actual remedial work, which in part involved spreading sand over the land to clean up the spill, amounted to $180,000. Mr Richardson spoke of work on both sites, the site in question at Largs North and the Wing Street site. As mentioned earlier, approximately $300,000 was spent on the site in question post-spill.
The ERD judge in her remarks said at [4]-[6]:
[4]Mulherns has been in operation since 1979. It carries on business as a collector of waste oils. Generally the oils are collected from a customer’s premises using a vacuum pump truck and are then taken either to one of the defendant’s two premises or elsewhere for treatment. The customer pays a fee to Mulherns for the collection service. Mulherns on-sells treated used oil.
[5]The directors of Mulherns are husband and wife: Mr Michael Mulhern and Ms Carol Mulhern. There are 19 full-time and 1 part-time employees. In addition, Mulherns engage 3 franchisees/contractors full time. Sixteen vehicles are owned by Mulherns which are used to collect waste oil. Part of its business operations include the delivery of treated waste oils, to various purchasers in South Australia.
[6]Financially, Mulherns has been operating at a healthy profit over recent years, but claims that revenue has recently decreased as a result of the global financial crisis.
The ERD judge discussed the appointment of Mr Richardson and went on to say at [11]-[12]:
[11]I have no doubt, based upon Mr Richardson’s statement, that the offences were a “wake-up call” to Mulherns, to take some necessary drastic action, in the interests of complying with its obligations and minimising the risk to the environment, itself and others.
[12]However, I do not see the action and the significant expenses thereby incurred as mitigating factors when considering penalty, excepting that they evince an intention to comply with EPA licence obligations in the future. They indicate that Mulherns is now aware of its obligations and has been deterred from its previous casual approach to compliance with licence conditions and to minimising the risk of harm to itself and the environment.
The appeal judge is critical of the comments made by the ERD judge. He said at [29]:
[29]In my view, the observations of Kirby P in Camilleri have application to the circumstances arising in the present proceeding. The conduct of Mulherns, both in its cooperation with the EPA and in its extensive expenditure on the remediation of the site in addition to the further substantial expenditure at the direction of Mr Richardson, represents a significant mitigatory factor. Not only does this conduct demonstrate that Mulherns became aware of its obligations, it demonstrates Mulhern’s determination to put things right. The expenditure of approximately $900,000.00 involved much more than compliance with EPA requirements. It was evidence from which the Court could infer that there was no need for any further personal deterrence and that Mulherns was determined to act responsibly and to expend the necessary moneys to ensure a secure site in the future. It is to be accepted that the Judge made reference to these matters, but it is clear from the tenor of her remarks that she did not treat them as significant factors in mitigation in the way described by Kirby P in Camilleri.
The appeal judge was of the view that the court could infer from the evidence of expenditure of $900,000 that there was no need for any further personal deterrence. The appeal judge acknowledged that the ERD judge referred to those matters, but concluded from her reasons that she did not treat them as significant in the way described by Kirby P in Camilleri’s Stock Feeds.
It is my view that there is an over-emphasis by the appeal judge on the amount spent as showing no need for any further personal deterrence. Of the $900,000 referred to only $300,000 was attributable to this site and $180,000 of that was the cost of spreading sand to remedy the effects caused by the respondent’s offending. The ERD judge was of the view that most of the expenditure was necessary to enable the respondent to comply with its licence.
I can find no error in what the ERD judge says about the decision in Camilleri’s Stock Feeds and how she applied it. On the other hand it is my view that the appeal judge has wrongly taken into account all of the expenditure, both on the relevant site and on another site, in reaching his conclusion that there was no need for any further personal deterrence.
I would allow the appeal on this ground. I will deal now with the appeal judge’s reasons and his lack of discussion as to the significance of general deterrence in fixing the penalty for offences such as these.
Ground 1(c) General deterrence
The appellant argued that the appeal judge gave no consideration to the need for general deterrence in focussing on personal deterrence only. The appeal judge at [38] did approve [39]-[42] of the ERD judge’s remarks where the need for general deterrence was discussed. However, at the conclusion of [38], the appeal judge stated that the ERD judge did not have proper regard to Mr Richardson’s statement and overlooked mitigating factors. It was argued that general deterrence is to be regarded as paramount in the enforcement of licensing regimes. Piva v Brinkworth (1992) 59 SASR 92 was cited in support of that proposition. It was argued that Michael Mulhern, a director of Mulherns, took a personal role in the offending conduct. It was argued that the ERD judge correctly recognised the need for general deterrence in cases like this, where deliberate breaching conduct has occurred.
The respondent argued that, at [38] of his reasons, the appeal judge stated that the ERD judge was right in saying that “A message has to be sent to the community of environmental licence holders, in the interests of general deterrence…”. It was submitted that [38] showed that the appeal judge had in his mind the central reasons why general deterrence was important when he agreed with the ERD judge’s observations. It was submitted that the reason why the appeal judge focussed on specific or personal deterrence was because that is where the errors in the ERD judge’s reasons lie.
Analysis
It is my view that in re-sentencing the appeal judge did not properly reflect on the statement by the ERD judge which is set out in his reasons. The appeal judge said at [38] that the judge took a very serious view of this group of offending and was right to do so. His Honour then set out paragraphs [39]-[42] of the ERD judge’s reasons:
[39]As I have already said, it is a privilege to hold a licence under the Environment Protection Act. That privilege carries with it certain obligations, in the interests of the protection of the environment. It is expected that those obligations, namely the conditions of the licence, be adhered to. In the interests of the community and the protection of the environment, it is vitally important that those conditions be adhered to by a licence holder. A deliberate transgression of a condition of a licence merits a significant penalty.
[40]In this case, it is difficult to see any mitigating circumstances. The pit was dug by the person at the highest level of the company and persons, subject to direction by the company director, were instructed to collect the liquid waste and to deposit it into the pit. Periodically, the sludge was removed from the pit and taken elsewhere. The facts again show a cavalier attitude on the part of Mulherns towards its obligations.
[41]Although I appreciate that Mulherns now has a more effective management regime in place than appears to have existed over the period of the offences, the Company must be shown that offending does not pay, and deterred from engaging in unlawful activity.
[42]A message has to be sent to the community of environmental licence holders, in the interests of general deterrence, that deliberate breaches of condition are serious offences against the community. The general community is also entitled to know that conditions imposed on an environmental authorisation will be enforced and that breaches have consequences.
Footnotes omitted
As can be seen, the last paragraph of the ERD judge’s comments in which she mentions general deterrence has received a general endorsement from the appeal judge by virtue of his comment at [38]. However, other than saying that the ERD judge was right to do so, the appeal judge then revisits the question of personal deterrence at [39] of his reasons, adding to what he said earlier at [29]. His Honour’s reasons indicate that personal deterrence and the mitigating factors relating to the remedial work were at the forefront of his re-sentencing considerations, and that insufficient regard was had to general deterrence.
I would allow the appeal on this ground.
Ground 2(a)
The appellant argued that the appeal judge’s finding of a “need” to store waste oil unlawfully at [7] of his reasons was an error because Mulherns had an obligation under its licence to store whatever volume of waste oil it chose to collect in accordance with its licence conditions. It was argued that such collection and storing was under its control. It was argued that the appeal judge’s chosen wording was more than a passing contextual reference and was not corrected at any point in his reasons.
The respondent submitted that the appeal judge’s use of the word “need” at [7] was merely a description of the events as they unfolded. It was submitted the appeal judge did not take that into account in mitigation of the offence.
Analysis
In my view the complaint made by the appellant regarding the use by the appeal judge of the word “need” is not supportable. It was argued that this involves an error in the appeal judge’s approach. I do not regard it as such. It was merely an expression to show that the bunded tanks were full and therefore a decision was made to use an unbunded tank. In my view it could not have been intended to mean that, because it was a matter of need, it was therefore out of the control of the respondent, as contended by the appellant. I would reject the appeal based on this ground.
Ground 2(b)(i) Post-spill remediation
The appellant argued that the appeal judge gave excessive weight to Mulherns’ expenditure post-spill. It was argued that the expenditure was merely to bring Mulherns into compliance with its licence and that it ought not to gain credit for that. It was alternatively argued that the expenditure was merely in line with Mulherns’ general environmental duty.
The respondent submitted that the weight given was a matter for the appeal judge’s discretion and that he was correct. It was submitted that the appeal judge’s reasons did not indicate a view that the remediation did away with the need for general deterrence. It was submitted that Mulherns’ remedial expenditure was an important matter for the same reasons as in ground 1(b) and that it went directly to the harm caused. It was submitted that remedial action was an important matter under the Criminal Law (Sentencing) Act 1988 and particularly important in environmental offending. It was submitted that the appeal judge’s approach was in contrast with the ERD judge’s approach that the absence of harm was not “particularly relevant” to the breach of condition.
Analysis
I have dealt with these considerations in my reasons at [49]-[58] and [61]-[62]. As I have said, I consider that the ERD judge did give appropriate mitigating weight to the respondent’s post-incident remediation for the reasons already expressed. I would therefore allow the appeal on this ground.
Ground 2(c)
The appellant argued that inadequate reasons for the re-sentencing were given by the appeal judge. It was argued that no explanation was given for how the appeal judge avoided “double punishment” or how the principle of totality was applied. It was argued that the appeal judge did not reveal the method used to recalculate the penalties and as such no review of the method could be undertaken.
The respondent submitted the appeal judge’s approach was appropriate given that he had on the one hand identified errors in the ERD judge’s approach and on the other hand had endorsed her remarks at [38] of his reasons. It was submitted that a restatement of the matters taken into account by the ERD judge was unnecessary. It was submitted that the appeal judge gave effect to the principle of totality and in doing so avoided the risk of “double punishment”.
Analysis
In my view the appeal judge has indicated sufficiently why he has reduced the penalties and his reasoning is available, albeit brief on some aspects. I consider there is no merit in this ground of appeal.
Ground 3
The appellant argued that the $75,000 fine for counts 1, 8 and 9 was manifestly inadequate. This was because of the deliberate nature of the breaches, the number of offences, the totality of the offending, the commercial motive (and benefit), the personal involvement of the director and the need for general deterrence. $75,000 represented just over a tenth of the combined maximum penalties for counts 1, 8 and 9. It was argued that the magnitude of the penalties reflects an intention on the part of Parliament that severe penalties can and should be imposed for such offences.
The respondent submitted that the penalties were well within the permissible range, given the appeal judge exercised the sentencing discretion afresh. It was submitted that the penalty imposed by the appeal judge reflected the need for general deterrence. It was accepted that the case fell within the definition of “serious environmental harm” and that the offending was serious. It was submitted, however, that with respect to the oil spill there was no ongoing harm and that although Mulherns created the risk, the harm was done by third party interveners. It was stressed that Mulherns was a first offender and had a good record of waste disposal for 30 years. It was submitted that the appellant’s approach of comparing the penalty against the maxima of a number of offences was erroneous. It was submitted that the sentence was a substantial penalty which reflected the relevant sentencing considerations.
In relation to counts 2-7 and 10, it was submitted that with respect to the storage of inert waste water there was no harm, or any material potential for harm, the income received was small, and the period of offending was confined. Counsel conceded that they were serious offences but there were relevant mitigatory matters. I can see no valid basis for any criticism of the way Her Honour dealt with these counts.
Analysis
For the reasons I have set out elsewhere, it is my view that the penalties imposed by the appeal judge were manifestly inadequate. In particular, the penalties failed to reflect the seriousness of the offending and the need for the penalties to act as a general deterrent to others.
The ERD judge correctly, with the one exception of count 1, applied appropriate penalties. These were serious environmental breaches. The ERD judge is a judge presiding in a specialist jurisdiction dealing with similar matters on a regular basis. Her Honour has not erred in the exercise of her sentencing discretion apart from her consideration of count 1, in respect of which I consider the penalty excessive.
It follows that the appeal judge has imposed penalties which do not reflect the gravity of the offending and therefore are manifestly inadequate.
It is my view that the penalties imposed by the appeal judge of $70,000 and $75,000 respectively do not properly taken into account the nature of the offending, the fact that it was deliberate offending, the commercial considerations of balancing an increased profit against compliance with the conditions of licence, and finally the need to send a message not only to the respondent but to anyone who might be of like mind in breaching these important environmental standards.
Conclusion
I would grant permission to appeal.
I would then allow the appeal.
I would set aside the orders made in this court on 20 November 2009. I would allow the appeal against penalty in respect of counts 1, 8 and 9.
In relation to counts 1, 8 and 9, because of my view that the ERD judge has doubled up in her sentences for count 1 and count 9, I would make an adjustment for count 1 and impose a penalty of 25% of the maximum, which means a reduction to $125,000. The total for counts 1, 8 and 9 then becomes $197,250. I would then make reductions similar to those made by the ERD judge and round off the figure to $155,000. I would then substitute that penalty.
I would dismiss the appeal to the appeal judge in respect of counts 2 to 7 and 10.
I would hear the parties on the costs of the appeal, both to the appeal judge and to the Full Court.
LAYTON J: I would grant permission to appeal and allow the appeal. I agree with the penalties proposed by Anderson J and with his reasons.
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