Director of Public Prosecutions v Italiano
[2025] VCC 461
•16 April 2025
| IN THE COUNTY COURT OF VICTORIA AT MELBOURNE CRIMINAL DIVISION | Revised Not Restricted Suitable for Publication |
Case No. CR-21-00540;
CR-21-00539
| DIRECTOR OF PUBLIC PROSECUTIONS |
| v |
| ROBERT ITALIANO and SKM SERVICES PTY LTD |
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JUDGE: | KELLY | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 11 March 2025 | |
DATE OF SENTENCE: | 16 April 2025 | |
CASE MAY BE CITED AS: | DPP v Italiano & Anor | |
MEDIUM NEUTRAL CITATION: | [2025] VCC 461 | |
REASONS FOR SENTENCE
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Subject:CRIMINAL LAW
Catchwords: Pollution of the atmosphere — Aggravated pollution — Recycling plant — Director of the company — Two co-accused — Corporation in involuntary liquidation — Fire — Mandatory evacuation — Previous fires at the premises — Extremely hazardous air quality — Rolled-up charge — Plea of Guilty — Jury verdict — High objective gravity — Moral culpability — Distinguished from Hazelwood — Delay — Extra-curial punishment — Whether to impose conviction
Legislation Cited: Environment Protection Act 1970 (Vic); Corporations Act 2001 (Cth); Criminal Procedure Act 2009 (Vic); Sentencing Act 1991 (Vic); Planning and Environment Act 1987 (Vic).
Cases Cited:DPP v Robert Italiano & SKM Services Pty Ltd (Ruling No 1) [2023] VCC 187; DPP v Robert Italiano & SKM Services Pty Ltd (Ruling No 2) [2023] VCC 188; Henry Lowe (a pseudonym) v Director of Public Prosecutions [2023] VSCA 152; DPP v Robert Italiano & SKM Services Pty Ltd (Ruling No 3) [2024] VCC 816; R v Jones [2004] VSCA 68; DPP v Hazelwood Pacific Pty Ltd & Ors [2020] VSC 279.
Sentence: Robert Italiano: $140,000 fine with conviction;
SKM Services Pty Ltd: Total fine of $1,140,000 with conviction
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APPEARANCES: | Counsel | Solicitors |
| For the DPP | Mr C. Mandy SC Ms S. Locke | Office of Public Prosecutions |
| For the Accused (Robert Italiano) For the Accused (SKM Services Pty Ltd) | Ms S. Flynn KC Unrepresented | Croxford Milardovic and Associates Unrepresented |
HIS HONOUR:
Introduction
1Robert Italiano, you have pleaded guilty to one rolled-up charge of pollution of the atmosphere so as to make it noxious or offensive, harmful to health and detrimental to any beneficial use under s 41(1)(a), (b) and (e) of the Environment Protection Act 1970 (Vic) (‘EPA’). The maximum penalty for this offence is a financial fine of $380,568.00.
2SKM Services Pty Ltd (‘SKM’) has been found guilty by jury of one charge of aggravated pollution, one charge of pollution of the atmosphere so as to make it noxious or offensive, one charge of polluting the atmosphere so as to make it harmful to health and one charge of polluting the atmosphere so as to make it detrimental to any beneficial use. The maximum penalties for these are as follows:
(a) Aggravated pollution — $1,585,700.00
(b) Polluting the atmosphere so as to make it noxious or offensive — $380,568.00
(c) Polluting the atmosphere so as to make it harmful to health — $380,568.00
(d) Polluting the atmosphere so as to make it detrimental to any beneficial use — $380,568.00
Summary of offending
3At about 9am on 13 July 2017, a large fire broke out in a rubbish heap located between 42 and 110 Maffra Street, Coolaroo. The fire burned out of control for approximately 48 hours after the arrival of the initial fire response crews. It continued to burn for several days and was fully extinguished after 10 days.
4The fire generated dense smoke and ash, which spread to nearby suburbs. Residents in Dallas were evacuated and numerous witnesses reported feeling unwell. Many witnesses spoke of an acrid smell.
5At the time of the fire, SKM was the occupier of, and in control of the plant, processes and activities at 90 – 110 Maffra Street, Coolaroo. Robert Italiano, you were the sole director of SKM at the time of the offending.
Previous fire
6On 28 February 2017, a previous fire erupted at 90 – 110 Maffra Street. It significantly damaged Building 2, where the processing of recycled material occurred. A baler was destroyed. This reduced SKM’s capacity to process recycled material. In the following months, the volume of recycled material awaiting processing increased notwithstanding SKM’s reduced capacity to process such waste.
7By 13 July 2017, approximately 25,000 square metres of recyclable material was being stored in the open at 90 – 110 Maffra Street and at 80 and 82 Maffra Street, Coolaroo. The material comprised paper, plastics, scrap metal, glass and food scraps and was stacked in some areas up to four metres high in densely packed mounds.
8This waste overflowed into the holding yard of a neighbouring factory, Glass Recovery Services (‘GRS’). GRS was part of the same group of companies generally referred to as SKM Recycling. The overflow produced a comingling of the waste heap with crushed granulated glass containing decomposing organic food matter.
Containment of the July fire
9The Metropolitan Fire Brigade (‘MFB’) was notified at 8:44am on 13 July 2017. At 8:56am, it observed that the fire was spreading rapidly due to strong winds. The fire grew swiftly to approximately 60 metres by 80 metres and was assessed as being out of control. A state-wide emergency management response was triggered, involving the MFB, the Environment Protection Authority (‘the Authority’), Victoria Police, Ambulance Victoria, Hume City Council and the State Emergency Service (‘SES’).
10By 2:10am on 14 July 2017, the MFB had 35 fire trucks and 160 personnel at the scene.
11The Authority also deployed substantial resources to support efforts to contain the fire and to monitor the air quality.
12A community relief centre was established at the Broadmeadows Aquatic Leisure Centre. Several residents in Dallas were evacuated from their homes.
13Approximately 48 hours after the arrival of the first fire crews, the fire was declared under control. It continued to burn for several days, taking approximately 10 days to fully extinguish. The MFB attended the site until 11 August 2017.
SKM
14The SKM recycling business was established by Giuseppe Italiano in 1999 as a family enterprise. It underwent corporate restructuring in 2008. Its main business was incorporated as SKM Industries Pty Ltd (‘SKM Industries’). SKM held a contract with SKM Industries to provide labour for the processing of recyclable material and to maintain the plant and machinery owned by SKM Industries. SKM was subject to supervision and oversight from SKM Corporate Pty Ltd (‘SKM Corporate’) who employed various managers.
15Mr Italiano, you became director of SKM in mid-2012.
16Between 2010 and 2019, SKM recycled 2.5 million tonnes of recyclable material. At the time it was declared insolvent, SKM employed 300 people and paid a further 300 people through its supply chain.
Procedural history
17Mr Italiano, you were charged on 4 March 2019. You obtained legal representation from Seyfarth Shaw. SKM remained unrepresented for some time.
18On 21 August 2019, KordaMentha were appointed Receivers and Managers of SKM, and on 20 November 2019, PKF were appointed liquidators of SKM.
19The trial was listed to commence on 13 February 2023. On that day I heard pre-trial argument. I delivered two pre-trial Rulings on 17 February 2023.[1] Both were the subject of interlocutory appeals, one successful.[2]
[1] DPP v Robert Italiano & SKM Services Pty Ltd (Ruling No 1) [2023] VCC 187; DPP v Robert Italiano & SKM Services Pty Ltd (Ruling No 2) [2023] VCC 188.
[2] Henry Lowe (a pseudonym) v Director of Public Prosecutions; Director of Public Prosecutions v Henry Lowe(a pseudonym) [2023] VSCA 152.
20On 17 November 2023, Croxford Milardovic were retained to act on behalf of SKM. An affidavit from Mr Jason Stone, the registered liquidator and one of the authorised legal representatives of SKM, stated that funding had been received to respond to the charges brought against SKM. On the same day, Seyfarth Shaw ceased acting on your behalf, Mr Italiano.
21Another pre-trial hearing took place on 21 March 2024. A Ruling was sought in relation to whether leave was required pursuant to s 500(2) of the Corporations Act 2001 (Cth) (‘Corporations Act’) before a criminal prosecution could be commenced against SKM. My Ruling was delivered on 6 June 2024.[3] The trial had been fixed to commence on 15 April 2024 but was delayed by pre-trial argument.
[3] DPP v Robert Italiano & SKM Services Pty Ltd (Ruling No 3) [2024] VCC 816.
22Days before 18 November 2024, both parties indicated the matter would resolve to pleas of guilty.
23Mr Italiano, you pleaded guilty on 18 November 2024. SKM withdrew instructions from its lawyers and did not participate or appear at court thereafter. A mention was listed for 21 November 2024. On 20 November 2024, I received correspondence from Mr Mitchell Stewart from PKF on behalf of the liquidators that no authorised representative was available to attend the mention, and that SKM would not be represented at trial. In his email, Mr Stewart confirmed that SKM did not have any objections to the trial proceeding in its absence. On 25 November 2024, the prosecution invited the court to dispense with the requirement under s 215 of the Criminal Procedure Act 2009 (Vic) (‘CPA’) that the corporate accused be arraigned pursuant to s 214(2). They further invited the court to proceed with the trial in SKM’s absence under the same provision. I did so.
24SKM remained unrepresented at trial and was found guilty by jury of charges 1, 3, 4 and 5 on 2 December 2024.
25Mr Stewart in correspondence on 7 March 2025 confirmed SKM remained unrepresented and would not attend the plea hearing. The plea hearing took place on 11 March 2025.
26On 15 April 2025, Mr Stewart advised that no authorised representative was available to attend the sentence. I had regard to ss 214, 246 and 252 in Part 5 of the CPA in determining whether I had the power to sentence SKM in its absence. I determined that although s 214(2) allows the court to dispense with or vary any requirements imposed by Part 5 of the CPA, it was appropriate to have an authorised representative present at sentence.
27I made an order pursuant to s 246 of the CPA that an authorised representative of SKM appear at the sentence. I note a representative from PKF is here today.
Circumstances of offender — Robert Italiano
28Mr Italiano, you have two children, aged 11 and 15. You are currently unemployed. You have spent your entire working career in waste management and joined the family business after finishing school in 1991. Your father Giuseppe was the founder and director of SKM Corporate.
Defence Submissions
29Ms Flynn KC with Ms Dickens submitted on your behalf, Mr Italiano, that the court ought to impose a fine without conviction having regard to your capacity to pay, your good character, your lack of prior criminal history and the impact a conviction would have on your future.
30Ms Flynn referred me to a passage from Fox & Freiberg’s Sentencing: State and Federal Law in Victoria, which reads as follows:
The recording of a criminal conviction is a significant act of legal and social censure. It is a judicial act by which a person’s legal status is officially and, under present Victorian law, irretrievably altered. The alteration effected by a conviction is a diminution of the offender’s legal rights and capacities. These follow automatically from the fact of conviction and are not necessarily tied to the particular sanction that follows.[4]
[4] Richard Fox and Arie Freiberg, Sentencing: State and Federal Law in Victoria, (Oxford University Press, 2nd ed, 1999), [1.504].
Prosecution Submissions
31Mr Mandy SC with Ms Locke submitted on behalf of the prosecution that the court ought to impose a substantial fine with conviction for both the Director and the offending company. In your case, Mr Italiano, they cited the objective gravity of your offending and your culpability.
32Mr Mandy underscored your knowledge of the risk of fires occurring at the premises as an aggravating factor when regard is had to the increase in flammable material brought on to the site in the wake of the earlier fires, particularly the fire on 28 February 2017.
Rolled-up Charge
33Mr Italiano, you have pleaded guilty to a rolled-up charge. The Court of Appeal in R v Jones noted that sentencing for a rolled-up charge, unlike a representative charge, operates to the advantage of an offender by limiting the maximum penalty that can be imposed.[5]
[5] R v Jones [2004] VSCA 68 [12]-[13].
34The charge you have pleaded guilty to represents a compressing of the following three charges, namely:
(a) Pollution of the atmosphere so as to make it noxious or offensive;
(b) Pollution of the atmosphere so as to make it harmful to health; and
(c) Pollution of the atmosphere so as to make it detrimental to any beneficial use.
35Although I cannot impose a penalty beyond the maximum, I am entitled to consider the rolled-up nature of your charge in determining the quantum of the fine I am to impose and whether I ought to impose a conviction.
Gravity of Offending & Moral Culpability
Robert Italiano
36Ms Flynn argued that your offending is to be determined by assessing the harm created by the polluting event and not by analysing the preventative measures which could have been taken in the aftermath of previous fires at the Coolaroo site. She referred me to Justice Keogh's remarks in DPP v Hazelwood Pacific Pty Ltd (‘Hazelwood’),[6] where his Honour observes:
Offences against s 41 of the EP Act are outcome based, not risk based. The offence is to pollute the atmosphere. The culpability and degree of responsibility of the offenders is to be assessed against the outcome which occurred. The offenders are to be sentenced for polluting the atmosphere, not for the failure to take a step to reduce the risk of pollution where it is not established that failure caused the pollution.
[6] DPP v Hazelwood Pacific Pty Ltd & Ors [2020] VSC 279 (‘Hazelwood’).
37The last sentence of His Honour’s remarks excerpted above contemplates cases where, if a causal connection between an offender’s failures and the polluting event can be established, those failures would bear on an assessment of culpability. In Hazelwood, his Honour identified thirteen reasons why the offenders in that case did not cause the pollution generated by fires at the Hazelwood mine, principal amongst them extreme weather conditions, ferocious bushfires and arson beyond the control of those operating the mine. Here, by contrast, the fires at the Coolaroo site were a concomitant of SKM’s storage, handling and processing of comingled waste.
38Ms Flynn argued that the 13 July fire was produced by E Coli leaking from another industrial site into the accused’s Coolaroo site. There is some tension between that explanation and paragraph 9 of the summary of prosecution opening. Accepting for a moment that effluent from an unrelated plant triggered the 13 July fire, SKM was on notice that the storage, handling and processing of recyclable waste on its Coolaroo site produced fires which required containment. Although its ability to process waste was reduced after 28 February, it brought more waste onto its Coolaroo site, storing it in such a haphazard way that containment was rendered impossible. That elevates SKM’s responsibility for the offences against it.
39Pursuant to s 66B(1) of the EPA, where SKM has contravened, by an act or omission, any provision of the EPA, the Director is also guilty of the offence which relates to the contravention unless he proves that he was not in a position to influence the conduct of the corporation or used all due diligence to prevent the contravention, or the Corporation has a defence available to it under the EPA. Mr Mandy invoked s 66B to argue that you, Mr Italiano, are deemed liable for the acts or omissions of SKM. I note that the charge against you avers that you have committed an offence pursuant to s 66B(1) of the EPA. By this means, the prosecution says you are deemed liable for the acts or omissions of SKM and their acts or omissions can inform my assessment of your offending. You pleaded guilty to a charge laid pursuant to sections 66B and 41 of the EPA.
40Since the prosecution has accepted your plea to one rolled-up count of polluting the atmosphere and it has pursued a charge of Aggravated Pollution against SKM separately, I need to differentiate between your conduct as the sole director of SKM and its conduct in committing the offence of aggravated pollution. SKM has also been separately charged with three s 41 offences. It is practically impossible to differentiate between your pollution of the atmosphere, Mr Italiano and SKM’s. There is bound to be substantial overlap and I intend to reduce the fines that I would have imposed to acknowledge that fact.
41Ms Flynn argued that the evidence lead at trial is admissible only against SKM and cannot be used in determining the extent of your offending, Mr Italiano. I doubt that where s 66B(1) of the EPA is relied on to ground the criminal responsibility of a Director that his offending can be so quarantined, but there are several accounts in the depositions of the harm, potential harm, offensiveness to the senses and detriment to beneficial use engendered by the polluting event. I rely on them in determining the magnitude of your offending.
42I have summarised at paragraphs 65 to 73 below the relevant accounts of the impact of the airborne toxic event on the residents of Dallas, Coolaroo. Broadmeadows and neighbouring suburbs.
43Ms Flynn submitted that your moral culpability is at the lower end of the range, having regard to the following:
(a) the charge against you is outcome based and not risk based;
(b) It is not open to the court to find that you caused the pollution either by your actions or your failure to act;
(c) You had taken steps to reduce the amount of material at the Coolaroo site;
(d) Other causal factors contributing to the fire such as E.Coli in the water which had leaked from a disused Yarra Valley Water pipe creating a large pond of effluent; and
(e) There was no way for you to know that a fire existed as it only sparked when a front-end loader exposed it to oxygen, causing it to ignite.
44Ms Flynn noted that in 2017 there were no laws in Victoria regulating the proper storage of recyclable material.
45She argued that the court’s focus needs to be trained on the July fire, the extent and persistence of the pollution it generated, and the resultant exposure to harm, health, welfare and detriment to beneficial use. That, she argued, is the prism through which your offending needs to be viewed and not the wider lens of your stewardship of SKM in the previous months when numerous fires broke out at the Coolaroo site such that you were on notice of the potential for conflagration on a larger scale.
46Ms Flynn also sought to distinguish the fire the subject of this offending from the fire in Hazelwood, noting that the fire in Hazelwood burned for 45 days and came close to the town of Morwell. She submitted that the effect of the pollution in Hazelwood was vaster than the pollution in this case.
47Mr Mandy argued that the objective criminality of your offending and SKM’s is high. He argued that your Coolaroo plant operated very near homes, schools and small businesses. He pointed to the sweeping impact of the pollution on the community, the hospitalisations of residents and the evacuation of homes and businesses. He submitted that the 13 July fire consumed enormous resources from the MFB and other agencies over several days, including those required to remove the burnt debris from the site. Ms Flynn noted that Justice Keogh did not refer to resources deployed as a factor informing his sentence in Hazelwood. As previously observed, Hazelwood is distinguishable because that pollution was generated by bushfires and an instance of arson. It was not relevantly caused by the offenders.
48Mr Mandy pointed to the fires at the Coolaroo site on 20 February 2017, 28 February 2017, 4 June 2017, 9 July 2017 and 12 July 2017. He argued that the risk of an uncontainable polluting event was well-known to the company and its director. He argued that the decision to introduce greater volumes of flammable recyclable material to the site in the months before the 13 July fire is an aggravating feature of your offending, Mr Italiano, and is an aggravating feature of SKM’s offending. He submitted that the site’s reduced capacity to process recyclable material after the 28 February fire meant that the decision to store a greater volume of flammable material at the Coolaroo site after February reflected a cavalier indifference to an escalating risk of an uncontainable fire breaking out at the site.
49Ms Flynn told me that you had personally undertaken to mitigate risk after the January 2017 fire. She said that you travelled overseas to source a new plant although you were preoccupied with a large insurance claim which consumed much of your time. She argued that one alternative open to you was the dumping of excess recyclable material from the Coolaroo site into landfill, but your commitment to reclaiming and repurposing waste prevented you from adopting such a myopic and cynical strategy.
50Ms Flynn submitted that you were not aware that recyclable material at Coolaroo was being stored outdoors until a small fire on 4 June. She pointed to the efforts you took to divert material to other sites such as Laverton and Derrimut and she submitted that no new material had been brought to the Coolaroo site since 4 June 2017.
51That submission was disputed by the prosecution who produced a table demonstrating an uptick in waste material brought to the Coolaroo site between June and July 2017. Mr Mandy also relied on EPA Notices signed by you, Mr Italiano in that period. In oral submissions, he said that between 25 June and 12 July 2017, 5,242,952 tonnes were brought to Coolaroo and 3,472,000 tonnes were taken from the site. I note the prosecution then provided me a spreadsheet using kilograms as the unit of measurement.
52Based on the spreadsheet and table provided by Mr Mandy, I am satisfied that the total weight entering the Coolaroo site between 25 June 2017 and 12 July 2017 was 5,242,950kg, while the weight leaving the site was 3,472,230kg during the same period. This represents an additional 1,770,720kg in waste materials added to the Coolaroo site in that period.
53Ms Flynn responded by arguing that the spreadsheet provided by the prosecution did not record the weight of recyclable material taken to 82-88 Maffra Street, Coolaroo specifically. Instead, the spreadsheet records waste taken to the weighbridge at 94 Maffra Street, Coolaroo. She argued that the court could not find that further materials were brought onto 82-88 Maffra Street, Coolaroo after 4 June 2017. I note that there is no evidence of any other weighbridge in the vicinity.
54Mr Mandy argued that the data in the spreadsheet was provided by SKM to the Authority. He submitted that the prosecution is entitled to rely on the contents of this spreadsheet. He also referred to evidence, including photographs, that demonstrate further material was introduced to the site.
55I therefore accept the prosecution’s contention that higher volumes were stored at Coolaroo between 25 June and 12 July 2017 notwithstanding fires in January and February of that year. Ms Flynn’s submission relied principally on an interview with a front-end loader operator who said on 14 July 2017 that, “trucks stopped bringing in material month and a half ago.”[7] He worked for Haulaway Services as an on-site manager. He did not give evidence, did not provide a juratted statement and the notation attributed to him is ambiguous in the context of the other entries made at that page of the depositions. It may be a reference to the movements of Haulaway Services trucks merely. I remind myself that to find, as an aggravating feature of your offending Mr Italiano, that SKM increased the volume of recyclable material at the Coolaroo site in the months since the 28 February fire, I need to be satisfied beyond reasonable doubt. I am so satisfied.
[7] Depositions p 3225.
56Ms Flynn argued that once the fire had ignited, there was little you could do to contain it or to mitigate the damage it caused to the environment. She argued that there were trucks and foam available at Tullamarine Airport which could have been used by the MFB to contain the blaze. I have previously noted that 35 trucks and 160 personnel were dispatched to the site by the MFB to contain the blaze. There is no proper basis for criticising its response. By your plea, you have accepted responsibility for the pollution produced by the fire at your site. You cannot traverse that plea by traducing the MFB and suggesting that had it done more there would have been less pollution in the atmosphere.
Level of Pollution
57I now turn to the pollution in the atmosphere generated by the fire. In doing so, I have had regard to the evidence from the depositions alone and not what was adduced at trial.
58Nicholas Perkins of the Metropolitan Fire and Emergency Services Board deployed air monitoring equipment and took readings of the carbon monoxide and particulates.[8] He explained in his statement that an average of 250 micrograms per cubic metre (µg/m3) over a 24-hour period is considered extremely hazardous. Relocation of community is generally considered after 48 hours of an average of 250 µg/m3.
[8] Depositions p 31.
59Between 10:58am and 11:53am on 13 July 2017, the readings of the particulate indicated a concentration of approximately 4,000 µg/m3 in the business areas south of the fire. Mr Perkins determined that the occupants of these premises would be exposed to unsafe particulate levels and needed to be relocated by 1:00pm.
60At 12:00pm, readings were taken in nearby community areas. On Washington Street in Dallas the reading was 1,000 µg/m3, on King Street in Dallas the reading was 740 µg/m3, and on the corner of Avenel and Donald Streets in Dallas the reading was 400 µg/m3.
61At 2:30pm, the Coolaroo Hotel asked if they could reoccupy their premises. Further readings were taken at this location, which returned a particulate reading of 1,000 µg/m3. Samples were taken from nearby homes which returned readings of up to 2,500 µg/m3 inside dwellings and 5,500 µg/m3 outside the homes.
62Given the high levels of particulate, at 3:30pm Mr Perkins advised that the Dallas and Coolaroo communities should be voluntarily relocated. He predicted that the impact of smoke would be in the area for at least 16 hours.
63On 14 July 2025, the particulate concentration was less than 400 µg/m3 in most areas, which is still extremely hazardous.
Impact on witnesses
64Nine people provided statements to police about the impact of the fire and pollution on their lives.
65Hala Alaoui observed white particles from the fire floating to her house in Broadmeadows.[9] Ms Alaoui lived with her parents and three young children. She felt suffocated by the smoke, which she said smelt like burning plastic. Ms Alaoui’s mother was so affected that she spent a night in hospital on an IV drip and suffered from chest tightness and breathing problems. Ms Alaoui observed ash throughout her house.
[9] Depositions p 1.
66Melissa Ballinger lived with her husband and three children in Dallas.[10] She described the smoke smelling like burning hair or plastic. Her daughters suffered very bad asthma attacks from their exposure. Ms Ballinger stated that there was grey smoke covering her house and her family was evacuated from their home for three days. Upon their return, Ms Ballinger observed ash inside the kitchen and bedroom windows, and covering their cars.
[10] Depositions p 3.
67Niyazi Dogancay worked in Coolaroo and suffered a loss of income as a result of the fire.[11] He observed ash in the air and could smell burning plastic. He was told to evacuate his workplace and was unable to work for three days. Upon returning to work, he could still smell the smoke.
[11] Depositions p 8.
68Dallas resident John Fernandes lived with his parents and his pregnant fiancé. Mr Fernandes observed a large cloud of fog-like smoke that smelt like hair dye or hairdresser’s bleach.[12] He had trouble breathing both inside and outside the house. Ash covered his cars and several plants in his garden died.
[12] Depositions p 10.
69Colleen Kirwan was also evacuated from her home, along with her children and pets.[13] Ms Kirwan was told that it was safe to return home eleven days later and described that there were ash particles all over her front yard and a burning plastic smell inside her house for days. One of Ms Kirwan’s daughters has asthma and suffered due to the smoke and the smell.
[13] Depositions p 12.
70Ronald Lelieveld owned a business in Coolaroo called All About Scuba.[14] His business was badly affected by the fire for at least a couple of weeks. He was forced to evacuate his store and was unable to resume normal business for about a week. Mr Lelieveld incurred costs of servicing his high-end scuba diving equipment due to smoke damage.
[14] Depositions p 14.
71Dallas resident Castor Murillo lived with his pregnant wife and four children.[15] He smelt a toxic smell and noticed ash coming inside through his closed windows. He fell ill from the smoke and when he awoke, he vomited and felt tightness in his head and a burning in his chest. Mr Murillo’s family evacuated their house due to the smell and, upon returning two days later to retrieve some medication, he observed a lot of ash inside. It took him a day to steam clean the upholstery and bedding. Mr Murillo and his family stayed in a motel for several nights to escape the smoke.
[15] Depositions p 22.
72Remzi Ozdemir worked in Coolaroo and lived in Dallas.[16] She was evacuated from her home due to the fire. She also owns several shops in Dallas and stated that the smoke from the fire had damaged the air conditioners in these shops. The air conditioners needed to be replaced.
[16] Depositions p 27.
73Sarah Santilli lived in Dallas with her young daughter who has a lung condition.[17] She was alerted by neighbours and, upon returning home, noticed a disgusting smell and observed ash on the curtains and windowsills, which had penetrated the closed windows. She described the air inside the house as ‘thick and cloudy’. She and her daughter evacuated and returned five days later.
[17] Depositions p 29.
74Mr Italiano, the objective gravity of your offending is high. You are the sole Director of SKM and you knew the history of fires at the Coolaroo site. You were responsible for operational decisions such as how much waste was brought to your sites in Laverton, Derrimut and Coolaroo. The decision to increase the volume at Coolaroo was made when the site’s capacity to process recyclable waste had been deleteriously affected by the 28 February fire. That decision increased the likelihood of an uncontainable fire breaking out. Whether the 13 July fire was caused by E Coli leaking into your site or whether it was caused by the comingling of crushed granulated glass, organic food matter and recyclable waste, the quantity of waste at your site rendered containment impossible. The uncontained blaze at your site produced the pollution.
75Nearby residents suffered the exacerbation of respiratory illnesses, some were hospitalised. Massive resources were required to manage the consequences. Businesses were adversely impacted. Whilst the impact may not have been on a scale commensurate with Hazelwood, there the offenders did not cause the pollution. Here, you and SKM did. This fire was unmanageable because of the way waste was stored and permitted to comingle, its combustibility and its massive volume.
SKM
76Turning now to the objective gravity and moral culpability of SKM.
77Mr Mandy submitted that in assessing the moral culpability of SKM, I am obliged to consider the deeming provision in s 62C of the EPA:
62C Presumption that occupier caused the discharge etc,
If any segment or element of the environment is polluted as a result of a discharge, emission or deposit of any substance from or on any premises on which there is conducted any commercial or industrial undertaking, the occupier of the premises is deemed to have polluted that segment or element of the environment unless the occupier provides that the discharge, emission or deposit was unrelated to the commercial or industrial undertaking.
78SKM was unrepresented at trial and was found guilty of three counts of pollution of the atmosphere in addition to one charge of aggravated pollution pursuant to s 59E of the EPA:
59E Offence of aggravated pollution
A person who intentionally, recklessly or negligently pollutes the environment or intentionally, recklessly or negligently causes or permits an environmental hazard which results in —
(a) serious damage to the environment; or
(b) a serious threat to public health; or
(c) a substantial risk of serious damage to the environment; or
(d) a substantial risk of a serious threat to public health —
is guilty of an indictable offence.
79I am therefore obliged to consider the objective gravity of the offending in relation to the charge of aggravated pollution separately, relying on the evidence adduced at trial. Aggravated pollution is not defined in the EPA.
80The crime of Aggravated Pollution has three elements:
(1) That SKM caused or permitted an environmental hazard;
(2) That they did so negligently; and
(3) That their conduct resulted in a substantial risk of a serious threat to public health.
81I directed the jury that an environmental hazard is a state of danger to human beings or the environment, whether imminent or otherwise, resulting from the location, storage or handling of any substance having toxic, corrosive, flammable, explosive, infectious or otherwise dangerous characteristics. The prosecution case was put on the basis that SKM caused or permitted an environmental hazard by the way it handled and stored flammable recyclable materials. Hazard was defined as a state of danger, a risk. The prosecution undertook to prove that there was something about how SKM handled or stored flammable materials that posed a state of danger to people or the environment.
82I directed the jury that the element of negligence would be made out if SKM’s acts fell greatly short of the standard of care a reasonable person would have exercised and involved a substantial risk of causing or permitting an environmental hazard. The jury was obliged to compare SKM’s conduct with the standard of care a reasonable company in SKM’s position would have exercised in the circumstances. To prove this element, the prosecution was required to demonstrate that a reasonable person in SKM’s position would have realised that their conduct created a high risk of an environmental hazard and, compared to the standard of care a reasonable person would have taken to avoid creating or permitting an environmental hazard, SKM’s conduct fell short of that standard of care to a great extent. The jury was told that even the most careful person can make mistakes and that this element is not concerned with minor breaches of the expected standard of care.
83As to the third element, the jury was directed that there were two concepts they needed to consider. First, substantial risk which relates to the likelihood that something will go wrong. The prosecution was obliged to prove more than a minor risk or some risk. Secondly, serious threat to public health. This concerns what will happen if something goes wrong. The jury was obliged to consider how bad the consequences will be. The element is directed to hazards, not harms.
84The jury by its verdict accepted that SKM permitted an environmental hazard, that it did so negligently and that its conduct resulted in a substantial risk of a serious threat to public health.
85Martina Dennekamp, a senior epidemiologist at the Environment Protection Authority was called to give evidence at the trial about the public health effects of the fire. She said the likely health effects included aggravating existing respiratory problems, causing asthma in children and causing sore eyes and sore throats for people of otherwise good health. She explained that for the highly vulnerable population, the extremely poor air quality led to admissions to hospital emergency departments.
86Nicholas Perkins, a scientific adviser with the MFB was also called at trial. He had taken readings around the area of the fire to measure the pollution levels. He gave evidence that at the time of the fire, readings of over 250 micrograms per cubic metre were considered extremely hazardous. He said he obtained readings of 4000 micrograms per cubic meter in the business area south of the fire, 15 or 16 times the quantity considered extremely hazardous.
87Steven Attard, a firefighter and commander of the FRV gave evidence at trial about bales of material that were stored in one metre by one metre cubes, stacked on top of each other. He said they appeared to be made up of co-mingled waste, such as paper products, plastics and normal household waste. He attested that the workers on site had estimated the pile as being approximately 25,000 square metres in area.
88Viranga Abeywickrema, a regional manager of the Environment Protection Authority was called to give evidence at trial about his investigation and observations of the scene. He said having walked around the incident scene, he observed the waste piles to be around 4 meters high.
89I have already summarised the health and commercial impacts of the fire. I have also found that the pollution was produced by a massive fire at the Coolaroo site which was rendered uncontainable by the volume of stored material at that site and the method of storage. Mr Mandy argued in his closing address that the storage of recyclable waste at a height of 4 metres, with bales very close to one another and access to firefighting equipment choked off by mounds of waste caused the aggravated pollution. The jury by its verdict found that SKM had caused or permitted an environmental hazard, was negligent in doing so and that its conduct resulted in a substantial risk of a serious threat to public health.
90The objective gravity of SKM’s offending is at the upper mid-range. My basis for so finding is the foregoing coupled with the increase in volume of recyclable material brought to the Coolaroo site in the months after the 28 February fire when SKM’s capacity to process the material had declined due to the damage to its baler. Evidence was adduced at trial of the extremely hazardous levels of air pollution generated by the blaze. This evidence has informed my assessment of the objective gravity of this offence. I note that no finding of recklessness or intent was sought by the prosecution. The jury by its verdict found SKM negligent.
Prospects of Rehabilitation
91Mr Italiano, Ms Flynn submitted that you have excellent prospects of rehabilitation, noting that you have no prior convictions, and you have not come to the attention of the police in the period since this fire in 2017. You are entitled to draw on your prior good character.
Character References
92Five character references were provided to the Court on your behalf.
93Vincenzo Caruso has known you for over 30 years and he is the godfather to your son. He describes you as dedicated to your family, friends and community. He states that you are committed to the betterment of both yourself and those around you, and that you actively seek to improve yourself. He believes that you will learn from your offending and will continue to make meaningful contributions to the community. He did not elucidate what your contributions to date have been.
94Simon Schofield has known you since you were 15 years old. You are a loyal friend who makes time for everyone, and you are of “unwavering character”. He describes you as resilient, honest, and compassionate. He believes that you have already learned from your offending and will continue to make valuable contributions to the community. He did not explain what shape your contributions to date have taken, but you are set to keep making them.
95Michael Franks has known you for 12 years in both a professional and personal capacity. Professionally, he describes you as honest, level-headed, compassionate, and respectful. He worked with you and competed against you and says that you have never shown disregard for your obligations to the community, the EPA or the legal system. On a personal level, he views you as an “exceptional role model” and a great friend.
96Robin Settle is a lawyer who has known you for 12 years on both a professional and personal level. She describes you as being an honest, professional, diligent, and responsible person to deal with.
97Michael McClaren has known you for 13 years both professionally and personally. He describes you as a close friend, who is caring, honest and trustworthy. He says that you are an exceptional family man and that you are of great character.
98You have reasonable prospects of rehabilitation. In saying that, I note that you have not made any of the gestures of contrition made by the offenders in Hazelwood.
Guilty Plea
99The offending occurred in July 2017. You were not charged until March 2019. You pleaded guilty in November 2024, four and a half years after the charges were laid. The prosecution submitted that your plea of guilty has limited utilitarian value and is neither early nor reflective of remorse. Mr Mandy conceded that you have demonstrated an acceptance of responsibility for your offending. Ms Flynn conceded that yours is not an early plea but she maintained that pleading before trial is still significant.
100You have saved the court the time and expense of running a trial. You have pleaded to a rolled-up charge. You will be credited with the administrative saving of foregoing a trial.
101There is scant evidence of remorse, save for the vague representations of your referees.
Delay
102I acknowledge that there has been significant delay in finalising this matter.
103It was almost two years before you were charged. Nearly four years elapsed before pre-trial arguments were heard and another 21 months before your trial was listed and you pleaded guilty to this offending. Much of that delay is unexceptional. You applied for your charges to be remitted to the Magistrates’ Court. That application was refused. Nonetheless, I accept that almost two years elapsed between the offending and charges being laid and during that time you have experienced uncertainty and anxiety.
104You have not engaged in any offending since. You do not appear to have obtained employment elsewhere. I accept you attended somewhat to your rehabilitation since the offending. There is, however, a stark distinction between your response to your offending and the responses of the four corporate offenders in Hazelwood. They published a community notice acknowledging the efforts of the CFA, MFB and other agencies. They publicly apologised to the community of Morwell and thanked it for its patience. In contrast, you sought to malign the efforts of the MFB. The offenders in Hazelwood implemented a program known as “Revive Morwell”, distributing 6,700 gift cards. They contributed $100,000.00 to the La Trobe City Council’s community clean up initiative. They donated a further $550,000.00 to local community organisations and $500,000.00 per year in sponsorships. They acknowledged the impact of the mine fires on the local community. You have not.
Extra curial punishment
105Mr Italiano, Ms Flynn submitted that you have been subjected to extra-curial punishment, which should be acknowledged in reducing your penalty.
106It was submitted that you have suffered from negative publicity in the reporting of your offending, and that this has done irreparable damage to your personal and professional reputation. You have been unable to source work and you have had to borrow money from family members to support yourself and your children.
107I have not been provided with examples of the media reporting of this case and I have not been provided with any instances of jobs you have been denied due to adverse publicity. Accordingly, there is no foundation for reducing the penalty I am to impose due to reputational damage.
Conviction
108Pursuant to s 8 of the Sentencing Act 1991, a court must have regard to the following in exercising its discretion to record a conviction:[18]
(a) The nature of the offence; and
(b) The character and past history of the offender; and
(c) The impact of the recording of a conviction on the offender’s economic or social well-being or on his or her employment prospects.
[18] Sentencing Act 1991 (Vic) (’Sentencing Act’).
109Supplementary submissions were filed following the plea in which your counsel set out the impact a conviction would have on your ability to:
(a) Hold directorships;
(b) Hold a licence under the EPA;
(c) Obtain finance;
(d) Obtain insurance;
(e) Obtain planning permits;
(f) Travel overseas; and
(g) Obtain employment.
110The Crown filed further submissions in response. They submitted that any of the above potential impacts are either speculative or outweighed by the gravity of the offending.
111Mr Italiano, your offending was serious. The consequences of recording a conviction are hard to precisely predict. I note that s 206B(1)(b) of the Corporations Act relates to the making or participating in making, of decisions that affect the whole or a substantial part of the business of the corporation. That may apply to you. If so, the recording of a conviction against you may trigger the operation of s 206B(1) of the Corporations Act. The offence you have pleaded guilty to is one of polluting the environment. It is at least arguable that the regulatory offence to which you have pleaded guilty is not one contemplated by s 206B(1) of the Corporations Act. I cannot conclude that the recording of a conviction against you will trigger your disqualification from managing corporations.
112As to holding EPA licences, you become a prohibited person under the EPA if found guilty. You then need to demonstrate that you are a fit and proper person to obtain a licence. The recording of a conviction is not determinative.
113I do not accept that your ability to obtain finance will be relevantly affected by whether a conviction for a polluting offence is recorded. Liquidators have been appointed to SKM. That is likely to influence whether finance is extended to you much more than the recording of a conviction for an offence of polluting the environment.
114Again, it is impossible to determine that your capacity to obtain insurance will be adversely impacted by the recording of a conviction as opposed to SKM’s history of claims against insurers.
115There is insufficient material before me to conclude that your capacity to obtain planning permits will be prejudiced by the recording of a conviction for the offence of polluting the atmosphere. It has not been argued that the Planning and Environment Act 1987 (Vic) relevantly distinguishes between findings of guilt on the one hand and the recording of convictions on the other.
116I cannot conclude that your capacity to travel overseas will be adversely affected by the recording of a conviction. The prosecution contends that for most countries, including the United States, one must disclose all findings of guilt not merely whether a conviction has been recorded.
117You advised the court that you have not been looking for work in the last five years. You have been in waste management all your life. What impact the recording of a conviction will have on your prospects of securing employment can only be guessed at. I cannot conclude on the materials provided that the recording of a conviction will have an adverse impact on your ability to secure work.
118I do not accept that the recording of a conviction against you is unwarranted.
119Pursuant to s 8 of the Sentencing Act, in exercising my discretion, I am to have regard to the nature of the offence, the character and history of the offender and the impact of the recording of a conviction on your economic or social well-being or on your employment prospects. I have had regard to these matters in determining that the objective gravity warrants the imposition of a conviction and the likely collateral impact is not of such magnitude that such a disposition is disproportionate to the seriousness of your offending.
Sentencing Principles
120Pursuant to s 5 of the Sentencing Act, the purposes for which you are to be sentenced are:
(a) To punish you in a manner and to an extent which is just in all of the circumstances;
(b) To deter you or others from committing similar offences in future;
(c) To facilitate rehabilitation;
(d) To manifest the denunciation of your conduct;
(e) To protect the community; or
(f) A combination of two or more of these purposes.
121The EPA aims to protect the environment and to police those whose actions have adverse environmental impacts. Section 1K sets out some guiding principles in relation to the enforcement of the EPA:
1K Principle of enforcement
Enforcement of environmental requirements should be undertaken for the purpose of —
(a) better protecting the environment and its economic and social uses;
(b) ensuring that no commercial advantage is obtained by any person who fails to comply with environmental requirements;
(c) influencing the attitude and behaviour of persons whose actions may have adverse environmental impacts or who develop, invest in, purchase or use goods and services which may have adverse environmental impacts.
122I intend by these sentences to give effect to those principles.
Sentence — Robert Italiano
123Mr Italiano, please stand.
124On charge 1, Polluting the Atmosphere I convict you and fine you $140,000.00
125Pursuant to s 6AAA of the Sentencing Act, I declare that but for your plea of guilty I would have convicted you and fined you $260,000.00
Sentence — SKM
126On charge 1, Aggravated Pollution, SKM is convicted and fined $900,000.00.
127On charge 3, Polluting the Atmosphere, SKM is convicted and fined $80,000.00
128On charge 4, Polluting the Atmosphere, SKM is convicted and fined $80,000.00
129On charge 5, Polluting the Atmosphere, SKM is convicted and fined $80,000.00
130I grant a stay of 90 days for the payment of these fines.
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