Environment Protection Authority v Central Coast Council

[2024] NSWLEC 141

Land and Environment Court

New South Wales

Medium Neutral Citation:

Environment Protection Authority v Central Coast Council [2024] NSWLEC 141

Hearing dates:

18, 19 November 2024

Date of orders:

20 December 2024

Decision date:

20 December 2024

Jurisdiction:

Class 5

Before:

Pain J

Decision:

See below in [110].

Catchwords:

CRIMINAL – sentencing for breach of condition of environment protection licence – early guilty plea – failure to maintain rising main in proper and efficient manner – relevance of financial crisis of amalgamated council and appointment of administrator to objective seriousness of offence considered – extent of environmental harm – application of s 10, s 10A of Criminal (Sentencing Procedure) Act 1999 not appropriate – mitigating circumstances considered – order for restoration project made – penalty imposed – publication order made

CRIMINAL – sentencing for water pollution offence arising from operation of sewerage system – early guilty plea

Legislation Cited:

Crimes (Sentencing Procedure) Act1999 (NSW), ss 3A, 10, 10A, 21A, 22, 23

Criminal Procedure Act 1986 (NSW), s 257B

Fines Act 1996 (NSW), ss 6, 122

Local Government Act 1993 (NSW), ss 220, 355, 438I, 438M, 731

Protection of the Environment Operations Act1997 (NSW), ss 3, 64, 116, 120, 122, 169, 241, 244, 248, 250, 251, Sch 6

Cases Cited:

Application by Attorney General (No 3 of 2002) (2004) 61 NSWLR 305; [2004] NSWCCA 303

Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357

Bartter Enterprises Pty Ltd v Environment Protection Authority [2022] NSWCCA 43

Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234; [2006] NSWLEC 34

Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683

Chief Executive, Office of Environment and Heritage v Boyle [2019] NSWLEC 54

Chief Executive, Office of Environment and Heritage v Kyluk Pty Ltd (No 4) (2014) 212 LGERA 1; [2014] NSWLEC 74

Director-General of the Department of Environment and Climate Change v Rae (2009) 168 LGERA 121; [2009] NSWLEC 137

Environment Protection Authority v Barnes [2006] NSWCCA 246

Environment Protection Authority v Charlotte Pass Snow Resort Pty Ltd (No 3) [2022] NSWLEC 136

Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 66

Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 178

Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26

Environment Protection Authority v Hawkesbury City Council [2017] NSWLEC 39

Environment Protection Authority v Sydney Water Corporation (No 2) [2023] NSWLEC 2

Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80

Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100

Environment Protection Authority v Sydney Water Corporation [2020] NSWLEC 153

Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 4

Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 17

Environment Protection Authority v Sydney Water Corporation [2023] NSWLEC 68

Environment Protection Authority v Sydney Water Corporation [2024] NSWLEC 130

Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242

Hili v R; Jones v R (2010) 242 CLR 520; [2010] HCA 45

Hoare v R (1989) 167 CLR 348; [1989] HCA 33

Hoffenberg v District Court of New South Wales [2010] NSWCA 142

Johnson v R (2004) 78 ALJR 616; [2004] HCA 15

Markarian v R (2005) 228 CLR 357; [2005] HCA 25

Muldrock v R (2011) 244 CLR 120; [2011] HCA 39

Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66

R v De Simoni (1981) 147 CLR 383; [1981] HCA 31

R v Nguyen [2002] NSWCCA 183

R v Olbrich (1999) 199 CLR 270; [1999] HCA 54

R v Paris [2001] NSWCCA 83

R v Ruha (2010) 198 A Crim R 430; [2010] QCA 10

R v Sharma (2002) 54 NSWLR 300; [2002] NSWCCA 142

R v Storey [1998] 1 VR 359

R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCA 309

R v Visconti [1982] 2 NSWLR 104

Secretary, Department of Planning and Environment v BoggabriCoal Pty Ltd [2014] NSWLEC 154

Veen v R (1979) 143 CLR 458; [1979] HCA 7

Veen v R (No 2) (1988) 164 CLR 465; [1988] HCA 14

Texts Cited:

Judicial Commission of New South Wales Sentencing Bench Book (SBB 60, November 24)

Category:

Sentence

Parties:

Environment Protection Authority (Prosecutor)
Central Coast Council (Defendant)

Representation:

Counsel:
A Brown (Prosecutor)
M Fraser (Defendant)

Solicitors:
Environment Protection Authority (Prosecutor)
Moray & Agnew (Defendant)

File Number(s):

2024/000134236
2024/000134237

JUDGMENT ON SENTENCE

Further amended statement of agreed facts

Mr McPeake’s evidence

Council’s evidence

Affidavit of Mr Farmer dated 14 November 2024

Mr Drury’s evidence

Oral evidence

Ms Galea’s evidence

Purposes of sentencing

Objective circumstances

Nature of the offences

State of mind/reasons for offences

Reasons for the offences/culpability

Role of administrator

Financial crisis 2020

Maximum penalty

Protection of the Environment Operations Act 1997 (NSW) factors

(a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, s 241(1)(a)

(b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, s 241(1)(b)

(c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, s 241(1)(c)

(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, s 241(1)(d)

(e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee, s 241(1)(e)

Finding on objective seriousness of the offences

Application of s 10, s 10A of CSP Act not warranted

Subjective factors

Guilty plea, ss 21A(3)(k), 22

Contrition and remorse, s 21A(3)(i)

Assistance to law enforcement authorities, ss 21A(3)(m), 23

Unlikely to re-offend, s 21A(3)(g)

Other sentencing considerations

General/specific deterrence

Retribution and denunciation

Even handedness/proportionality

Totality

Capacity to pay fine

Penalty

Section 250(1)(c) order made

Publication order

Costs

Moiety

Orders

JUDGMENT ON SENTENCE

1. The Defendant Central Coast Council (the Council) is charged with two offences arising from the same event of the escape of untreated sewage from the West Gosford Major Sewer Rising Main (WGMJ Rising Main) into Narara Creek, a tributary of Brisbane Water estuary. One offence arises under s 64(1) of the Protection of the Environment Operations Act1997 (NSW) (the POEO Act) in that, as the holder of an environment protection licence, condition O2.1 of maintaining a rising main pipe in a proper and efficient condition was not complied with. A charge of water pollution under s 120(1) also arises from the same event. The event which occurred from about 13 April 2023 to 15 April 2023 resulted in the discharge of approximately 1,834,000 litres of untreated sewage from the WGMJ Rising Main (the 2023 incident). The Council has pleaded guilty to committing the two offences.

2. As provided by s 220 of the Local Government Act 1993 (NSW) (LG Act) the Council as a body politic of the State has the legal capacity of an individual and is therefore capable of being charged. In pleading guilty to both offences the Council has admitted the essential elements of both offences. The offences are ones of strict liability so that mens rea is not an element of the offence. The offences can be considered together. The Prosecutor the Environment Protection Authority (EPA) must establish beyond reasonable doubt any matter not otherwise agreed for the purpose of sentencing, R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at [27] (Gleeson CJ, Gaudron, Hayne and Callinan JJ) citing R v Storey [1998] 1 VR 359 at 369 (Winneke P, Brooking and Hayne JJA and Southwell AJA).

Further amended statement of agreed facts

3. The parties agreed the further amended statement of agreed facts (FASOAF) as follows (footnotes excluded):

2. The offences each occurred between about 13 April 2023 to 15 April 2023 and arise from an incident whereby a 150mm long by 50mm wide hole in the 600mm (diameter) ductile iron cement lined section of the WGMJ Rising Main, at about chainage 850m, resulted in untreated sewage discharging from the WGMJ Rising Main into the environment and Narara Creek, a tributary of the Brisbane Water Estuary (the 2023 Incident).

…

The Environment Protection Licence

4. The Council is the holder of Environment Protection Licence No. 1802 (the Licence) issued under the POEO Act, first issued on 1 August 2000.

5. The Licence authorises the Council to undertake the scheduled activity of “sewage treatment” at the Central Coast Council South Sewage Treatment System, located at Doyle Street, Kincumber NSW 2251, the Kincumber and Woy Woy Sewage Treatment Plants (STPs), and the sewerage reticulation systems associated with these STPs.

6. The scheduled activity of “sewage treatment” means:

“the operation of sewage treatment systems (including the treatment works, pumping stations, sewage overflow structures and the reticulation system) that involve the discharge or likely discharge of wastes or by-products to land or waters.”

7. For the purposes of the Licence, at all relevant times, the premises was described in Condition A2.1 of the Licence as the Central Coast Council South Sewage Treatment System, Doyle Street, Kincumber NSW 2251, including the Kincumber STP in Kincumber NSW 2251 and the Woy Woy STP in Woy Woy NSW 2256, and their associated sewage reticulation systems (Premises).

8. Condition A2.2 of the EPL provides that the Premises to which the Licence applies also includes “the reticulation system owned and operated by the licensee that is associated with the sewage treatment plant(s) identified in condition A2.1.”

9. “Plant” is defined in the Dictionary to the POEO Act as “any plant, equipment, apparatus, device, machine or mechanism, and includes any vessel, dredge, unit of rolling stock or crane, but does not include a motor vehicle.”

10. The objectives of the Licence as stated in Condition A1.2 are to:

a) prevent as far as practicable sewage overflows and sewage treatment plant bypasses;

b) require proper and efficient management of the system to minimise harm to the environment and public health; and

c) require practical measures to be taken to protect the environment and public health from sewage overflows and sewage treatment plant effluent.

11. At all relevant times, Condition O2.1 of the Licence stated:

O2 Maintenance of plant and equipment

O2.1 All plant and equipment installed at the premises or used in connection with the licensed activity:

a) must be maintained in a proper and efficient condition; and

b) must be operated in a proper and efficient manner.

Note: The requirements of O2.1 apply to the whole of the premises, including the reticulation system.

12. “Waters” is defined in the Dictionary of the POEO Act to include: “(a) any river, stream, lake, lagoon, swamp, wetlands, unconfined surface water, natural or artificial watercourse, dam or tidal waters (including the sea)”

13. Narara Creek is a tributary flowing into Brisbane Water estuary.

The WGMJ Sewer Pump Station

14. The Council’s sewage treatment systems operate by collecting wastewater from the local areas they service, which is then directed into various sewage treatment plants, including the Kincumber and Woy Woy STPs. To reach an STP, sewage is pumped through sewage pumping stations, known as an SPS.

15. Pumped sewage transfer systems are used to transfer sewage from a lower collection point to a higher destination. The pipework leaving an SPS and delivering sewage to a higher destination is known as a sewer rising main.

16. The West Gosford Major Sewer Pump Station located at 224 Manns Road, West Gosford NSW 2250 (the WGMJ Pump Station) forms part of the “sewage reticulation system” the subject of Condition A2.2.

17. At all relevant times the Council was responsible for the management, operation, inspection, maintenance and repair of the WGMJ Pump Station.

Other Sewage Pump Stations Contributing to the WGMJ Rising Main

18. In addition to the WGMJ Pump Station, the following sewage pump stations also contribute to the WGMJ Rising Main and form part of the “sewage reticulation system” the subject of Condition A2.2:

Sewer Pump Stations	Location
SPS KA01	Casey Crescent, Kariong NSW 2250
SPS KA02	Central Coast Highway, Gosford NSW 2250
SPS KA03	Dean Place, Kariong NSW 2250
SPS KA04	Brittany Crescent, Kariong NSW 2250
SPS KA05	Mowbray Place, Kariong NSW 2250
SPS SI02	Old Pacific Highway, Somersby NSW 2250
SPS SI03	Kangoo Rd, Sombersby NSW 2250
SPS SI04	Somersby Falls Rd, Somersby NSW 2250
SPS SWTP	Myoora Rd, Somersby NSW 2250
SPS WG02	Manns Rd, West Gosford NSW 2250
SPS WG03	Kulara Avenue, West Gosford NSW 2250
SPS WG04	Kurrawa Avenue, Point Clare NSW 2250
SPS WG05A	Noonan Point Avenue, Point Clare NSW 2259
SPS WG05B	Victory Parade, Tascott NSW 2256
SPS WG06	Glenrock Parade, Tascott NSW 2256
SPS WG07	Brisbane Water Drive, Koolewong NSW 2256
SPS WG08	Brisbane Water Drive, Koolewong NSW 2256
SPS WG09	Brisbane Water Drive, Koolewong NSW 2256
SPS WG10	Lara Street, Koolewong NSW 2256
SPS WG11	Manns Road, West Gosford NSW 2250
SPS WG12	Tathra Street, West Gosford NSW 2250
SPS WG13	Dell Road, West Gosford NSW 2250
SPS WG15	Birru Road, Gosford NSW 2250
SPS WG17V	Racecourse Road, West Gosford NSW 2250

The WGM Rising Main:

19. The Council’s “sewage reticulation system” as regulated by the Licence includes the WGMJ Rising Main.

20. The WGMJ Rising Main is approximately 3,232m in length, beginning at the WGMJ Pump Station at 224 Manns Road, West Gosford NSW 2250. It then crosses Narara Creek via an aqueduct, runs parallel to Narara Creek, through a golf course and terminates at the Springfield Sewer Tunnel. The total elevation of the pipeline from the lowest point to the highest point is 11.4m.

21. The WGMJ Rising main is a 750mm (nominal internal diameter) mild steel cement lined pipe from chainage 0m to 116.9m.

22. The WGMJ Rising Main then transitions to a 600mm (nominal internal diameter) ductile iron cement lined pipe from the buried section east of the aqueduct crossing over Narara Creek, and for the remainder of the pipeline from chainage 116.9m up to its termination at the Springfield Sewer Tunnel. This section of pipeline comprises of a cement internal lining, ductile iron primary pipework material, and a plastic external lining.

23. At all relevant times, the Council was responsible for the management, operation, inspection, maintenance and repairs of the WGMJ Rising Main.

24. The WGMJ Rising Main was constructed in approximately 1985-1986 by NSW Public Works Department. There have been no upgrades or modifications made to the WGMJ Rising Main since its construction.

25. The Council was not responsible for the location, route, design or construction of the WGMJ Rising Main.

26. The purpose of the WGMJ Rising Main is to transfer sewage from the WGMJ Pump Station and the Kariong Carrier Main (and including the upstream sewage pumping stations as listed in [18] above contributing to these sources) to the Springfield Sewer Tunnel.

27. The WGMJ Rising Main is considered a critical asset within the Council’s sewage system.

28. A significant part of the WGMJ Rising Main is located within 100m of Narara Creek. NSW soil mapping data shows that acid sulphate soils are present in the vicinity of Narara Creek. Acid sulphate soils increase the risk of external corrosion of metal pipes by increasing the solubility of metals in soil.

29. The WGMJ Rising Main is likely subject to high external corrosion rates due to the flow of groundwater in combination with the occurrence of acid sulphate soils in these areas.

Key Components of the Council’s Sewage Treatment System

30. The key components of the Council’s sewage treatment system of relevance to these proceedings are summarised below:

a). WGMJ Pump Station: The WGMJ Sewer Pump Station pumps sewage under pressure into the WGMJ Rising Main. Sewage flows into the WGMJ Rising Main are also received from the Kariong Carrier bypass of the WGMJ Pump Station.

b). WGMJ Rising Main: The WGMJ Rising Main transfers sewage under pressure from the WGMJ Pump Station and sewage under gravity drainage from the Kariong Carrier Main to the Springfield Sewer Tunnel, and eventually to the Kincumber STP.

c). Kariong Carrier Main: The Kariong Carrier Main flows from the Kariong Plateau down towards the WGMJ Rising Main. During normal operation, the Kariong Carrier Main flows around the WGMJ Pump Station and connects directly into the WGMJ Rising Main. Flows in the WGMJ Rising Main from both the WGMJ Pump Station (pumped) and the Kariong Carrier Main (gravity) flow into the Springfield Sewer Tunnel and into Kincumber STP.

d). Kariong Carrier Main Bypass: The Kariong Carrier Main Bypass allows for sewage flows to discharge into the WGMJ Pump Station, rather than directly into the WGMJ Rising Main.

e). West Gosford Catchment: Sewage catchment area for the WGMJ Pump Station.

f). Springfield Sewer Tunnel: The Springfield Sewer Tunnel transfers sewage to the Kincumber STP.

g). Kincumber STP: Flows in the WGMJ Rising Main from both the WGMJ Pump Station (pumped) and the Kariong Carrier Main (gravity) flow into the head of the Springfield Sewer Tunnel and into Kincumber STP.

h). Discharge Point 1: The only permitted Discharge Point for Discharge to Waters pursuant to the Licence is “Discharge Point 1” located north of Winney Bay NSW.

Figure 1: WGMJ Rising Main and adjacent systems

The Enforceable Undertaking following a rising main failure in Wamberal in January 2019

31. Between 24 January 2019 and 29 January 2019, a hole in a sewer rising main at or near 893 The Entrance Road, Wamberal NSW 2260 caused approximately 2,200,000 litres of raw sewage to discharge into Forresters Creek and Wamberal Lagoon.

32. The EPA entered into an enforceable undertaking with the Council pursuant to s 253A of the POEO Act on 15 January 2020 in relation to the abovementioned incident (the 2019 EU).

33. The Council made a commitment in the 2019 EU to complete a Pressure Mains Criticality Analysis project (PMCA) by 31 December 2020. The Council committed to the following actions as part of the PMCA project:

a) to assess and assign a risk criticality score to each water and sewer main section in the Council’s sewer network;

b) to use the risk criticality scores to prioritise proactive sewer main inspections to assess the condition of the sewer mains; and

c) to use the results of the inspection program to identify isolated sewer mains that require regular inspection regimes and additional monitoring via the Council’s Supervisory and Data Acquisition (SCADA) system to reduce the likelihood of failures.

The failure of the WGMJ Rising Main in 2020

34. Between approximately 11:15pm on 26 February 2020 and 12:20pm on 25 March 2020, being a period of approximately 31 days and 1 hour, an estimated volume of 8,000,000 litres of untreated sewage discharged from a hole in the WGMJ Rising Main and into the environment, including Narara Creek (the 2020 Incident).

35. Council became aware of the 2020 Incident when a member of the public reported sewage flowing into Narara Creek behind 10 Racecourse Road, West Gosford on 23 March 2020 at 10:45am. Council subsequently identified the start date of the incident by observing a retrospective drop in pressure on 26 February 2020 on its SCADA system.

36. A photograph of the hole the subject of the 2020 Incident showed the polyethylene sleeve wrapped around that section of the pipeline to be in poor condition.

37. On or about 30 March 2020, in accordance with s 148 of the Protection of the Environment Operations Act 1997 (POEO Act), the Council notified the EPA and relevant authorities of the 2020 incident as potentially having caused or threatened material harm to the environment.

38. The cause of the 2020 Incident was identified as being corrosion of the 600mm plastic lined section of the WGMJ Rising Main.

39. WSP is an independent multi-disciplinary wastewater engineering consultancy with expertise in sewerage management infrastructure. They provide advisory services and engineering solutions for regulatory standards compliance, the protection and enhancement of the environments and the promotion of sustainable development.

40. Mr Jamie Loader, the Council’s Director of Water and Sewer, agreed that WSP had been requested by Council to prepare a condition assessment of the West Gosford Major Sewer Rising Main and he accepted that WSP had come to the conclusion that the sleeve around the ‘West Gosford Major’ was in poor condition in March 2020. In his record of interview, Mr Loader stated the following:

Q 175 Okay. So based on the photos, WSP have come to the conclusion that the sleeve around the West Gosford Major was in a poor condition.

A Yes that’s what it says, yes.

Q 176. That’s right. So my understanding is council were repairing that particular break?

A Yes.

Q 177. So council staff would have been there at the time of the break?

A Yes.

Q 178. Council would have been in a proximity to view the break?

A Yes.

Q 179. So I guess I’ll just again, does council consider they were aware of the condition of that sleeve at the time of the 2020 break?

A Yes.

Q 180. Okay. Does council consider that they would have been aware of the poor condition of the sleeve at the 2020 break?

A Yes.

41. In response to a request for information about the 2020 Incident, including any actions that Council had since taken to prevent or mitigate against a recurrence, the Council advised the EPA as follows:

“High level alarm added into SCADA for WGMJ. The alarm will be triggered for a drop in pressure equivalent to that indicative of a potential break.

CCC are currently undertaking a Pressure Main Criticality Analysis of sewer rising mains that assigns risk to all rising main segments. This will assist in determining which sections of pipe should be included in our proactive condition assessment program. It is envisaged that this program will significantly improve Council’s ability to detect breaks in isolated main”.

42. The Council did not conduct any physical preventative maintenance work on the WGMJ Rising Main following the 2020 Incident.

The Council’s Pressure Main Criticality Analysis project

43. Following the 2020 Incident, WSP, an independent contractor engaged by the Council, prepared the following documents supporting the Council’s PMCA project contemplated by the 2019 EU:

a) Intervention Plan – Basic Intervention Framework, dated 26 June 2020 (the WSP Intervention Plan). The purposes of the WSP Intervention Plan were to recommend a basic framework to assist with decisions regarding when and how to intervene during the asset life of sewer pressure pipelines, and to categorise different types of interventions that are used to manage the risk profile of the pressure pipeline portfolios;

b) Pipe Performance Report – Likelihood of Failure – Sewer, dated 22 July 2020 (the WSP Pipe Performance Report). The purposes of the report were to identify the likely factors that correlate to actual sewer pressure pipe failures. WSP concluded in the report that acid sulphate soil does not indicate any increase in failure rate, on the basis that the highest failure rates were observed in pipes located outside of acid sulphate soil areas. WSP’s recommendation was that acid sulphate soil is not used as a cohort for assigning expected remaining life in the next project stage.

Included with the WSP Pipe Performance Report were three additional documents each dated 10 July 2020 and respectively titled Sewer Mains Pressure CoF Final, Sewer Pressure Mains LoF Final and Sewer Pressure Mains RoF Final;

c) Pressure Main Criticality Analysis – Final Report, dated 1 September 2020 (the WSP PMCA Final Report). This report set out the project methodology to assign scores for likelihood of pipe failure (LoF), consequence of pipe failure (CoF) and the resulting risk of failure (RoF), with the scores to then be assigned to each pressure main in the Council’s water supply and sewer network.

Included with the WSP PMCA Final Report were three Microsoft Excel spreadsheets respectively titled sPressureSewerMain_CoF_V1.2, sPressureSewerMain_LoF_V1.2 and sPressureSewerMain_Risk_v1.2.

44. The purpose of engaging WSP to carry out the Pressure Main Criticality Analysis was to bring expertise to bear on the task which the Council did not possess.

The Initial Risk Rating for the WGMJ Rising Main under the PMCA

45. As part of the PMCA, each pipeline the subject of the analysis was assigned a LoF score and a CoF score. These scores were then multiplied to calculate an “overall failure risk” (RoF) score.

46. The initial LoF score for the WGMJ Rising Main was 1, and was calculated based on the following criteria:

1. Field condition assessment – This criterion is based on the actual condition of an asset, as verified by testing and/or inspection. Information regarding the field condition of the WGMJ Rising Main was not input into the LoF calculation for the initial risk score because no condition assessment had been undertaken as at that time;

2. Failure history – This criterion is based on previous recorded failures of the asset. The LoF score for the WGMJ Rising Main did not take into account any recorded failures despite the fact that 2020 Incident occurred prior to the PMCA being finalised;

3. Derived Condition – This criterion is based on age of the asset, pipe material, pipe diameter and maximum operating pressure.

47. The LoF spreadsheet for each sewer pipe asset the subject of the PMCA incorporated an acid sulphate soil risk. The WGMJ Rising Main was assessed as subject to a high acid sulphate soil risk for the sections of the pipeline laid in proximity to Narara Creek. However, WSP did not include acid sulphate soil risk as an input to the LoF calculation, despite the fact that acid sulphate soil significantly increases the risk of external corrosion of metal pipes.

48. The Council’s experts preparing the PMCA:

a) did not consider acid sulphate soils a high risk factor and in the absence of any greater expertise within the Council the assessment was not questioned by Council’s officers at the time; and

b) did not include the 2020 incident in the PMCA as it had not yet occurred at the time the PMCA supporting data for inclusion in the report was generated.

49. The initial CoF score for the WGMJ Rising Main was 5, and was calculated based on consideration of the following criteria:

1. Financial – repair cost and damage to property;

2. Social – including consideration of loss of service, public health and safety, and reputational damage;

3. Environment – based on assessment of pollution damage.

50. The outcome of the PMCA resulted in the WGMJ Rising Main being assigned an overall risk score of 5 and being placed into the “low risk” category as at 1 September 2020 based on the following scores:

a) LoF: 1

b) CoF: 5

c) Overall risk score [RoF score]: 5

51. The low risk category specified that validation of pipe specific input data within the framework should occur before the pipe is promoted for condition assessment or renewal. This category is described relevantly in the WSP Intervention Plan as follows:

“3.7 Do Nothing

Where the pipe failure risk is low there is little financial justification to pursue interventions such as condition assessment or renewal. In this case the recommendation is to do nothing…

For pipes with a medium or high consequence of failure, little intervention is expected during the first portion of their asset lives. The point of first intervention is a function of failure risk and will generally occur earlier for pipes that have a very high consequence of failure”.

The Council’s Updated Risk Rating for the WGMJ Rising Main in 2021

52. On 19 May 2021 the EPA wrote to the Council to request it confirm the WGMJ Rising Main’s score in the PMCA.

53. The Council advised the EPA on 10 June 2021 that the WGMJ Rising Main had obtained the following scores in the PMCA:

a) CoF score: 5/5

b) LoF score: 1/5

c) Overall risk score [RoF score]: 5/25

54. As at 10 June 2021, the WGMJ Rising Main was still assigned an overall risk score of low, and assigned to the “Do Nothing/Validate Asset Data” asset category.

55. The Council provided the following explanation as to how the risk score for the WGMJ Rising Main had been calculated:

“the risk score was calculated by assessing sewer rising main sections for LoF and CoF, which combined resulted in the overall RoF of each pipe segment… the LoF methodology is derived by an estimation of the pipe remaining useful life considering age, material and acid sulphate soil risk, adjusted where there are recorded failure records. The CoF methodology combines 15 data sources to identify the financial, social and environmental consequences of pipe failure.”

56. On 4 August 2021, the EPA wrote to the Council expressing concern at the low risk rating assigned to the WGMJ Rising Main in light of the 2020 Incident, and noting that functionality improvements advised to have been made to the SCADA system are post event notification improvements, not measures to prevent the recurrence of further pipe breakages and significant environmental impacts.

57. On 9 September 2021, the Council wrote to the EPA advising that the WGMJ Rising Main had been re-classified as high risk, with intervention recommendations including an initial condition assessment under its PMCA framework. The Council’s response advised of the following updated risk scores for the WGMJ Rising Main:

a) CoF: 5/5

b) LoF: 3/5

c) Overall risk score [RoF score]: 15/25

58. The Council further advised the EPA that it had, as at 9 September 2021, engaged a specialised consultant to carry out a condition assessment of the WGMJ Rising Main and that funding for partial main replacement had been included within the Council’s Independent Pricing and Regulatory Tribunal (IPART) submission. As at that date, the Council had not engaged any contractor to carry out a condition assessment in respect of the WGMJ Rising Main.

59. On 11 February 2022, the Council issued a purchase order to engage WSP to undertake a condition assessment of the WGMJ Rising Main.

60. While the purchase order engaging WSP to undertake a condition assessment of the WGMJ Rising Main had a required completion date of 27 October 2022, the assessment was not completed until July 2023.

61. The time taken was adversely affected by staff shortages in Council available to plan and deliver asset management programs. This included a lack of staff to oversee contracts, including the PMCA and condition assessment contracts.

The failure of the WGMJ Rising Main in 2023 the subject of these proceedings

62. On 6 March 2023, the SCADA alarm threshold for the WGMJ Rising Main triggered. By 8 March 2023 the Council’s technicians had investigated the alarm but had been unable to identify the cause of the trigger.

63. The SCADA alarm threshold triggered again on 8 March 2023 and the Council arranged for further investigations to be conducted. The Council’s civil crew walked the easement of the WGMJ Rising Main on 17 March 2023 but did not identify evidence of leaks, nor detect any odour.

64. At about 12:44pm on 13 April 2023, the Council received a report from a member of the public, Mr Lewis Windle, regarding an overflow of sewage in the vicinity of Narara Creek.

65. At approximately 3:22pm on 13 April 2023, the EPA’s Environment Line received a call from Council staff member Ms Joanne Mack self-reporting a sewer main break into Narara Creek from 10 Racecourse Rd, West Gosford NSW, with an unknown volume and considered significant.

66. Between approximately 12:44pm on 13 April 2023 and 2:05pm on 15 April 2023, being a period of approximately 2 days, 3 hours and 20 minutes, an estimated volume of 1,834,000 litres of raw sewage discharged from a 150mm by 50mm sized hole in the WGMJ Rising Main and into the environment (including Narara Creek) (the 2023 Incident).

67. The 2023 Incident occurred in the vicinity of 10 Racecourse Road, West Gosford NSW 2250, in an area adjacent to mangroves. More specifically, the 2023 Incident occurred at about chainage 850m from the WGMJ Pump Station. The depth below ground of the WGMJ Rising Main at the location of the 2023 Incident was approximately 1-2m.

68. The location of the hole in the WGMJ Rising Main subject of the 2023 Incident was approximately 90m in distance downstream from the hole the subject of the 2020 Incident.

69. The diameter of the WGMJ Rising Main at the location of the 2023 Incident was 600mm (nominal internal diameter) and the composition of the pipeline was ductile iron cement lined.

The cause of the 2023 Incident

70. The sewage overflow from the WGMJ Rising Main that occurred in the course of the 2023 Incident was caused by external corrosion of the WGMJ Rising Main pipe wall (as was the case in respect of the 2020 Incident).

71. More specifically, corrosion of the WGMJ Rising Main leading to the 2023 Incident was likely to be a combination of the following factors:

Corrosion Factor	Presence at WGMJ Rising Main	Explanation
Chloride	High concentrations recorded in close proximity to Narara Creek.	Narara Creek is an estuarine waterway. Salinity from the creek may create brackish groundwater which contains chlorides.
Acidity	Low pH (4.9) recorded in proximity to the WGMJ Rising Main 2023 Incident location.	The WGMJ Rising Main is installed within acid sulphate soils.
Moisture Content	Moisture content in excess of 38% recorded at locations along the WGMJ Rising Main.	Proximity to Narara Creek leads to increased soil moisture content.
Soil Conductivity	Soil conductivity in proximity to Narara Creek is considered to be highly corrosive.	The presence of chlorides and high moisture content support high soil conductivity.

72. The physical impacts of the corrosion process on the WGMJ Rising Main causing the 2023 Incident were relevantly as follows:

a) the protective plastic wrap surrounding the WGMJ Rising Main was likely breached during construction, allowing interaction between pipe material and the external corrosive environment;

b) iron material corroded in an irregular manner, with corrosion pitting concentrated at the eventual failure point;

c) the thickness of the WGMJ Rising Main was reduced through corrosion, lowering the pressure tolerance of the pipe; and

d) the pressure tolerance of the pipe decreased below operating pressure, leading to the failure of the WGMJ Rising Main.

Water quality sampling in the vicinity of the 2023 Incident

73. Between 13 April 2023 and 1 May 2023, the Council’s employees carried out water quality sampling in and around Narara Creek and Brisbane Water. Officers from the EPA and the Department of Climate Change, Energy the Environment and Water carried out water quality sampling at various locations in and around Narara Creek on 15, 17 and 20 April 2020.

74. The results of the sampling conducted by the Council and the EPA indicated elevated levels of faecal coliforms including Escherichia coli, and Enterococci (faecal streptococci) at several sampling locations within Narara Creek and Brisbane Water on the dates sampled.

75. EPA authorised officer Adam Plant inspected the 2023 Incident location on 14 April 2023. Mr Plant observed what he describes as “a fountain of liquid coming out of the ground and flowing into the local environment.” Mr Plant took photos and videos of his observations.

76. EPA authorised officer Daniel Whitley also inspected the 2023 Incident location on 14 April 2023 with Mr Plant. He observed a large volume of blackish-grey liquids pooling in the surrounding soil and vegetation around the WGMJ Rising Main. He observed the WGMJ Rising Main was located below ground level but noted it to be the source of the liquids, which were bubbling out in a large volume.

77. EPA authorised officers Sean Joyce and Daniel Whitley inspected the 2023 Incident location on 15 April 2023. Mr Joyce observed grey water bubbling from a hole in the ground and then flowing west into adjacent mangroves. Mr Joyce took video footage of the pipe breakage that was the source of the bubbling water. Mr Whitley took a sample from the source of the 2023 Incident and carried out water sampling in other locations around Narara Creek and Brisbane Water.

Clean-up and mitigation actions in response to the 2023 Incident

78. The Council took the following clean-up and mitigation actions in response to the 2023 Incident:

a) the Council implemented its Pollution Incident Response Management Plan (PIRMP);

b) the EPA, Safework, NSW Food Authority, NSW Health and NSW Fire and Rescue were notified of the 2023 Incident on 13 April 2023;

c) public health warning signs were installed at public access points on Narara Creek and Brisbane Water;

d) the WGMJ Rising Main was taken out of service to enable access to repair the pipe. The hole was sealed by applying a repair clamp, and the WGMJ Rising Main was returned to service by 4:05pm on 15 April 2023;

e) a vacuum tanker truck pumped out surcharged material at the WGMJ Pump Station, and approximately 10 tonnes of solid waste in the vicinity of the break was collected and transported for disposal at the Kincumber STP;

f) social media posts were published advising the public to avoid recreational activities in Narara Creek; and

g) community enquiries were registered on Council’s customer relationship database and responded to by telephone.

The WSP Condition Assessment Report

79. On 26 July 2023, WSP finalised its condition assessment report (the WSP Condition Assessment Report), which analysed the cause of both the 2020 Incident and the 2023 Incident. The scope of WSP’s analysis included a desktop assessment, physical inspection of the WGMJ Rising Main pipework, and testing of adjacent soil conditions which was carried out by Douglas Partners.

80. At time of the 2023 Incident, WSP had not completed the condition assessment of the WGMJ Rising Main. On 13 April 2022 soil sampling was carried out at 6 locations along the length of the WGMJ Rising Main. The results of the soil sampling as recorded in the WSP Condition Assessment Report indicated that:

• the corrosive exposure classification for 4 samples (S01, S02, S07 and S08) is moderate to severe;

• in relation to two samples (S04 and S05), only acidity (pH) and acid sulphate soil treatment levels were provided, which indicated low-medium treatment for acid sulphate soil;

• an inspection of the pipe wall and pipe wall scanning was planned for 2 locations, being a site adjacent to S04 (at chainage 891m), and at another location known as AV02 (at chainage 1975m). However, only the pipe inspection at AV02 proceeded. The ductile iron pipe in this location was observed to be wrapped in black plastic sleeving that appeared to have oxidised, rather than degraded due to groundwater or acid sulphate soil conditions.

• The results did not detect any significant damage to the exterior of the pipe, and indicated minimal external corrosion. Mr Luke Drury is the section manager, assets and planning, Central Coast Council and is responsible for the management of Council’s sewer assets. He has been employed in this role for three years, and prior to that was employed at Wyong Shire Council for seven years. In Mr Drury’s opinion, this circumstance was indicative of there being no particular urgency in working towards a pipe replacement while the remaining alternate planned potholing and condition assessment was being carried out.

• S04 was considered to be an inaccessible location to conduct WGMJ Rising Main pipe wall scanning due to boggy conditions. S04 was the closest location to the 2023 Incident and the results for pH for this site were indicative of the presence of acid sulphate soils.

The WSP Condition Assessment Report explained “pipe sample locations” at 4.2.1:

“Detailed inspection of the pipe wall was originally planned for 2 locations (next to S04 at CH891, and AV02 at CH1975). Due to ‘boggy’ conditions, the location at S04 was relocated immediately downstream of S01. However, this location was also deemed inaccessible given the discovery of concrete encasement that was not indicated on the WAC drawings. For the purposes of this assessment, it was assumed that concrete encasement was constructed in short lengths located at abrupt low elevations, as suggested by the WAC drawings.”

81. The WSP Condition Assessment Report also included the following relevant findings:

• the sections of the WGMJ Rising Main that are ductile iron cement lined and constructed in 1986 generally have a design life of 80 years. However, the pipe wall may be exposed to corrosion mechanisms that can accelerate the degradation of the pipe and reduce its remaining useful life;

• the ductile iron cement lined pipe [at the location of the 2023 Incident] had been wrapped in polyethylene wrapping, which does not fully protect the pipe surface from corrosive soil and groundwater conditions… Furthermore, the polyethylene sleeves were in poor condition and may have been damaged during construction. WSP found the use of black coloured sleeves to be unconventional and noted the quality of the sleeves is unknown and a cause for concern, particularly along Narara Creek where shallow dynamic groundwater is prevalent in combination with acid sulphate soils;

• the WGMJ Rising Main is constructed in potential or actual corrosive soils. When exposed to air, acid sulphate soils increase the solubility of metals in the soil, significantly increasing the risk of external corrosion of metal pipes. Soil mapping indicates a high probability of acid sulphate soils within 1m of the natural ground surface for 60% of the WGMJ Rising Main length. A significant part of the WGMJ Rising Main is laid in close proximity (within 100m) to Narara Creek, where the flow of groundwater along this area may likely subject the pipe wall to high external corrosion rates (in combination with the high probability of acid sulphate soils). Higher metal corrosion rates are expected for the pipeline constructed in proximity to the creek and sections traversing the golf course;

• the exposed WGMJ Rising Main pipe wall [at the 2023 Incident location] was smooth and its original peened surface was not prominent which suggests that the external groundwater/acid sulphate soil condition is sufficiently corrosive. The pipe wall was breached where localised but clustered external corrosion was prominent…Ultimately, there was insufficient wall thickness to sustain a surge (and possibly transient) pressures and a blow-out occurred.

82. WSP found the WGMJ Rising Main is subject to both internal and external corrosion, with external corrosion being predominant and the cause of the pipeline failure in 2023 (and as it was in 2020).

83. WSP further found that similar failures of the WGMJ Rising Main were expected within 8 years for the sections of the pipeline constructed adjacent and parallel to Narara Creek, which is approximately 2230m in length.

84. The WSP Condition Assessment Report identified an expected remaining useful life of 1-5 years for several sections of the WGMJ Rising Main, including the section the subject of the 2023 Incident. The report made several recommendations in relation to the WGMJ Rising Main as follows:

• Within 12 months

• Install high speed pressure loggers immediately downstream of the WGMJ Pump Station and over a 12-month period detect sources and the extent of potential surges and transients; investigate methods of minimising potential surges and transients if these failure mechanisms are detected;

• Inspect and repair air valves along the WGMJ Rising Main;

• Update geographic information system (GIS) records for the WGMJ Rising Main where pipe characteristics are noted as “unknown”, with Class K12, cement mortar lined and polyethylene wrap.

• Within 5 years

• Replace/renew the sections of the WGMJ Rising Main that have a remaining useful life of less than 8 years, being the section from CH116 to CH2350, including short lengths of pipe that have a 20 year remaining useful life that are located between sections recommended for replacement.

The Council’s maintenance policies or procedures for the WGMJ Rising Main

85. The Council was requested by way of a statutory notice to provide all policies, plans or procedures regarding the management, frequency and manner of inspection of, plant and equipment in relation to the WGMJ Rising Main, as well as any inspection and/or maintenance schedules, plans or programs.

86. The Council in response provided two folders of documents labelled respectively as “Draft Sewer Main Asset Class Asset Management Plan” and “Draft Sewer Pump Station Asset Class Asset Management Plan”.

87. The Council was further requested to confirm whether those two folders of documents contained routine maintenance procedures, critical rising main asset inspection programs, or operation and maintenance scheduled for the WGMJ Rising Main, and to confirm if the documents were draft, final or live documents as at the time the First Notice was issued on 4 July 2023.

88. In response, on 15 September 2023 the Council provided the following further information in relation to the WGMJ Rising Main:

“Routine Maintenance Procedures

These do not exist. Appendix D of the draft Sewer Main Asset Class Management Plan (AMP) is a placeholder for the future Sewer Mains Operation and Maintenance Schedules. The AMPs were in Draft at the time the Notice was issued.

Critical Rising Main Asset Inspection

The AMP identifies an asset condition framework (Section 7) and provides the life cycle management plan (Section 4) and asset renewal decision making framework (Section 8).

Council also provided an extract from the Pressure Main Intervention plan in the September 2021 response to the EPA … the intervention Plan was a Final document at the time the Notice was issued and outlines triggers to implement rising main condition assessments.

Operation & Maintenance Schedules

Council is not aware of an Operation and Maintenance schedule for the WGMJ Rising Main. Council is in possession of a Mechanical Equipment Maintenance Manual (NSW Public Works Department) for the adjoining WGMJ Sewer Pump Station. This describes the original operating mode and manufacturers mechanical maintenance requirements for the Sewer Pump Station which pumps into the WGMJ Rising Main…”

89. The purpose of an asset management plan includes to provide a framework to ensure the Council’s sewer mains assets are provided, operated, maintained, renewed and upgraded. The Sewer Main Asset Class Management Plan prepared by GHD was in draft format as at 4 July 2023 (Draft AMP). The Draft AMP noted that Council implemented a reactive maintenance strategy, rather than a planned maintenance strategy, which was subject to disadvantages including greater environmental and safety risks.

90. The Council’s deliberate reactive maintenance strategy, rather than the GHD recommended “planned maintenance strategy”, was in place because of financial constraints on the Council in consequence of the 2019 IPART determination and the 2020 financial crisis. The Council’s financial circumstances are noted in paragraphs from 129 below.

91. The Draft AMP also identified that critical assets in the Council’s sewer network included ductile iron cement lined sewer mains subject to external pitting from soil conditions. Services required to avoid or minimise the potential failure of these assets included pipeline and tunnel condition assessment inspection and monitoring, pressure transient monitoring, programmed maintenance, easement and corridor vegetation and maintenance.

92. At the time of the 2023 Incident, there were no routine inspections in place for the WGMJ Rising Main. The Council conducted inspections on a reactive basis, based on data observed from the SCADA system that may indicate a potential issue with the WGMJ Rising Main.

93. At the time of the 2023 Incident, the Council did not have an asset management plan in place for the WGMJ Rising Main, despite the fact that the WGMJ Rising Main was considered to be a critical asset in the Council’s sewer network system.

94. As at 15 March 2024 an asset management plan for the WGMJ Rising Main was still in draft form and being developed by the Council.

95. At the time of the 2023 Incident, no modifications, upgrades or renewal works had ever been undertaken on the WGMJ Rising Main.

The operations of Council’s SCADA System

96. The Council’s SCADA monitoring system does not specifically identify a pipe break or leak, although it may identify a pressure reduction indicative of a break or leak. Nevertheless, the sewage discharges subject of the 2020 Incident and the 2023 Incident were both first brought to the attention of the Council by members of the public, not by the SCADA system.

97. During the 2022/23 reporting year, Council’s SCADA system identified sewer system alarms within the EPL1802 catchment which resulted in over 1,500 maintenance interventions in the collection network and over 600 maintenance interventions in the treatment plants to minimise the risk of overflows to the environment and interruptions to our customers. Specific to WGMJ Rising Main, Council’s SCADA monitored the operational pressure within the rising main which led to work orders to inspect the rising main prior to the 2023 incident being detected.

The Council’s PIRMP

98. The Council’s PIRMP (version dated 7 March 2020) as prepared in accordance with the requirements set out in Chapter 4 of the Protection of the Environment Operations (General) Regulation 2022 required Council to assess hazards (to identify specific hazards to human health and the environment), the likelihood of those hazards occurring, and control measures or pre-emptive actions to reduce the likelihood and consequences of those hazards.

99. An objective of the Council’s PIRMP was to minimise and control the risk of a pollution incident at each of the Council’s sewage facilities, by identifying risks and developing planned actions to minimise and manage those risks.

100. The PIRMP required that risks associated with an identified hazard should be identified using a “worst case scenario” approach, with the controls to be identified, applied and evaluated. Risk registers were to be developed by the Council, maintained in the corporate document management system and reviewed in line with the PIRMP.

101. Appendix A of the Council’s PIRMP identified a number of controls or pre-emptive actions to reduce the likelihood of sewer main breaks, including those caused by corrosion. These actions included regular maintenance and regular inspection of sewer mains.

102. Regular maintenance and regular inspection of the WGMJ Rising Main, being controls and pre-emptive actions identified in Appendix A of the Council’s PIRMP, were not in place nor planned at the time of the 2023 Incident

Failure by the Council to Maintain the WGMJ Rising Main in a Proper and Efficient Condition Between 13-15 April 2023

103. The WGMJ Rising Main was not maintained in a proper and efficient condition between 13-15 April 2023 because it was unable to provide the environmental protective function of containing wastewater and preventing contact between wastewater and the local environment.

104. The Council failed to maintain the WGMJ Rising Main in a proper and efficient condition between 13-15 April 2023 because the Council did not have appropriate measures in place to protect the WGMJ Rising Main from external corrosion, despite being on notice that the WGMJ Rising Main is located in a corrosive environment without adequate corrosion protection.

105. Prior to the 2023 Incident, the Council should have taken reasonable actions to avoid or reduce the risk of the WGMJ Rising Main failing due to corrosion.

…

111. Council also did not have a corrective maintenance strategy in place for the WGMJ Rising Main at the time of the 2023 Incident. A corrective maintenance procedure may have allowed for a more rapid response to the 2023 Incident and a reduction in the volume of sewage discharged.

112. The WGMJ Rising Main failing by reason of external corrosion in April 2023, and causing an overflow of sewage, was foreseeable, particularly in light of the 2020 Incident, which involved a failure of the WGMJ Rising Main caused by external corrosion that occurred within 100m of the 2023 Incident.

Environmental Harm

113. In her expert report dated 18 September 2024, Fleurdelis Pablo found that actual harm to the environment had occurred as a result of the sewage outflow caused by both offences. In particular, the following environmental changes occurred to Narara Creek/Fagans Bay and Brisbane Water:

a) changes to the biological conditions through the introduction of faecal indicator organisms enterococci across a 1.4-6.8km section of Narara Creek towards Brisbane Water for up to 5 days from the date of the sewage overflow. The measured density of enterococci in water samples collected by Council and EPA officers exceeded the ANZECC 2000 Water Quality Guidelines by up to 105 times;

b) changes to the biological conditions through the introduction of faecal coliforms across a 0.5-7km section of Narara Creek towards Brisbane Water. The faecal coliform concentrations exceeded the ANZECC 2000 Water Quality Guidelines by 63-327 times on 15 April 2023 at the eastern side of the railway track infrastructure of Brisbane Water;

c) the introduction of ammonia into Narara Creek/Fagans Bay and Brisbane Water. The ammonia concentrations were higher than background concentrations for up to 5 days from the start of the sewage outflow. There was also exceedance of the ANZECC 2000 Water Quality Guidelines at one of the sites tested;

d) the reduction of dissolved oxygen – the measured dissolved oxygen level in surface waters collected by the Council and EPA officers across an approximately 1.1-15.km section of Narara Creek/Fagans Bay, Brisbane Water were below the background dissolved oxygen level for approximately 3 days from 15-17 April 2023. The bottom waters were observed on 15 April 2023 to be very low in approximately 0.9km of Narara Creek;

e) changes to the turbidity and colour of the water due to the introduction of visible wastewater materials from the discharged untreated sewage. The turbidity of the water samples taken between 15-17 April 2023 were higher than background levels across approximately 6.5km of Narara Creek/Fagans Bay, Brisbane Water. At the eastern side of the railway track infrastructure in Brisbane Water, the measured turbidity of three samples collected on 15 April 2023 was slightly higher than the background turbidity, but lower than the NSW Estuary Water Quality Guidelines Values 2024;

f) changes to the odour, which indicates the formation of volatile gases including hydrogen sulphide. Sewage odour was observed up to approximately 0.6km upstream of the sewage discharge location.

Potential harm to the environment

114. The changes to the odour, turbidity and colour of sewage-contaminated water would not have only resulted in a decline in the aesthetic quality of the waterway, but would have potentially caused indirect adverse effects on the functioning of aquatic organisms as a result of:

a) Smothering of aquatic organisms;

b) Diminished visibility which often affected organisms’ feeding behaviour; and

c) Reduced sunlight to aquatic plants, which limits photosynthesis.

…

116. Community members working in the commercial buildings along Narara Creek would have been exposed to odours resulting from the sewage discharge.

…

Council’s Financial Crisis and Financial Constraints on Council functions and Services

121. At all relevant times, CCC was both:

a) a Council under the Local Government Act 1993 (LG Act); and

b) a Water Supply Authority under the Water Management Act 2000 (WM Act).

122. CCC is unique in its governance arrangements for its water, sewer and drainage services. In some ways it is like other water authorities such as Sydney Water and Hunter Water, whilst at the same time being a Council. However, unlike all other NSW councils, Central Coast is regulated by the Independent Pricing and Regulatory Tribunal (IPART) in relation to the pricing for CCC’s water, sewer and drainage. CCC is the only NSW Council regulated in this fashion.

a) The IPART determinations of water and sewerage charges inherently limits the amount available to spend on water and sewerage assets maintenance and renewal. The level of funds available from this source is beyond the control of Council.

b) Water and Sewerage income was at all relevant times “quarantined” into separate funds and can only be expended on purposes related to water or sewer. At all relevant times the Council’s general fund was in financial crisis set out at paragraphs 137-147.

c) Council needs to manage the limited income available to both:

i. Meet its legislative and regulatory requirements to provide water and sewerage services; and

ii. Maintain and upgrade the infrastructure that provides those services, including environmental obligations.

123. IPART determines how much Council can charge for water, sewer and drainage services to support the delivery of services and outcomes as determined by this regulator. IPART does this through a pricing determination that covers a period. To raise revenue in these areas all a Council can do is to apply the approved charges to the various sewer services.

124. In May 2019, IPART issued the pricing determination for the period 1 July 2019 to 30 June 2022 (IPART 2019). A copy is in the Court Book at Tab 7. In the pricing period ending 2018 - 2019 the water and sewer income had reached $85 million annually. It would have been expected that this income would increase in future years. However, in IPART 2019 (for the 2019 – 2022 period) the maximum revenue, arising from sewer charges, was reduced to:

a) Year 1 - $69 million

b) Year 2 - $72 million

c) Year 3 - $75 million

As the previous income trajectory was not maintained by IPART CCC suffered a shortfall of $48 million over the 3 year period.

125. During this period the impact on the operating result for sewer functions and obligations was a loss of:

a) $12 million in 2019 - 2020; and

b) $2 million in 2020 - 2021.

The above results did not meet financial benchmarks (being at least a zero balance).

126. Ms Emma Galea is the Chief Financial Officer for Council. Ms Galea has held this position for 1 year and 9 months. In the opinion of Ms Galea, the practical consequence of the above is funds for maintenance activities in the relevant period leading up to the April 2023 incident, beyond routine maintenance (including reactive maintenance) and what processes were already in train as part of the EU, including the West Gosford Major Sewer Pressure Main Criticality Analysis and West Gosford Major Sewer Rising Main Condition Assessment, was significantly restricted.

127. Subsequently IPART issued a new determination for a 3-year period commencing in 2022 – 2023 (IPART 2022) setting the income level at $84 million which is essentially a reset to the 2018 - 2019 levels. IPART 2022, a copy of which is in the Court Book at Tab 12, partly rectified the maintenance funding shortfall going forward. In practical terms the consequence of this and the previous periods shortfall was to slow down the general maintenance processes and even now levels remain a significant reduction of funding in real terms and is less that what Council sought in its submission to IPART, a copy of which is in the Court Book at Tabs 10 and 11.

Administrator appointed 30 October 2020

128. In October 2020 Council experienced a serious financial crisis. The elected Council was dismissed, and an administrator was appointed. To continue operations Council was forced to obtain emergency loan funding to enable it to pay suppliers and employees. Two loans of $100 million and $50 million each were obtained.

129. At the time prior to the loans being taken out the Council was unable to pay its staff wages.

130. Considering Council’s financial situation, the lending bank required:

a) Council provide evidence that the financial position would be rectified to enable repayment of any loans to be provided; and

b) That Council not run an operating loss.

131. This required a revised budget which included a large restructure of Council services, including a reduction in employees, materials and services. The target reduction across Council was 15%. For the water and sewer, this meant in 2020 – 2021 and ongoing, a reduction of $4.9 million annually for employee costs, and $3 million annually in materials and services. In 2020‑2021 and leading up to the 2023 incident the Council did not undertake the maintenance works as planned or proactive maintenance and other works that McPeake identified as should have been undertaken.

132. The Council did not draw monies from general funds to undertake any works or maintenance for water, sewerage, stormwater drainage and trade waste services in 2020-2021 and leading up to the 2023 incident.

133. The first administrator appointed found that “Council’s rapid financial decline is in part due to several matters … (including) … The $39m loss of revenue (compared to 2018/19) from the 2019 IPART pricing determination for water, sewerage, stormwater drainage and trade waste services”. The result was that the budget, which was already planned to be a deficit budget of $7.7M, grew to be a larger deficit budget of $18.6M.

134. The 2019 IPART determination resulted in significant cuts to Council’s sewer and water income. This reduced expenditure across operations and maintenance, including reduction in the number of staff available to plan and deliver asset management programs. This included a lack of staff to oversee contracts, including the PMCA and condition assessment contracts. A table of relevant staffing at relevant times is set out below:

Proactive Maintenance

135. The Council did undertake some proactive maintenance:

a) There was SCADA monitoring of the WGMJ Rising Main and any data anomalies resulted in physical inspection of the WGMJ Rising Main. A few days before the 2023 leak a small anomaly resulted in a physical inspection of the WGMJ Rising Main that failed to detect any issues.

b) Council had engaged WSP to undertake a condition assessment of the WGMJ Rising Main and this was underway at the time of the 2023 break.

136. Since the 2023 leak Council has:

a) Implemented a program of weekly physical inspections of the WGMJ Rising Main;

b) Completed the condition assessment and progressed towards the partial replacement of the WGMJ Rising Main.

137. The WGMJ Rising Main is a small part of a much larger sewerage network that the CCC is responsible for. At all relevant times the CCC was subject to an Enforceable Undertaking (EU) entered into with the EPA in respect of all pressure mains in the entire CCC local government area. As part of the EU Council was required to, as part of a proactive process:

a) Conduct a criticality analysis of all pressure mains;

b) Where identified by the results of the criticality analysis, carry out condition assessments.

138. The initial results of the criticality analysis of the WGMJ Rising Main by WSP was that no further action was required. On submission to the EPA a response was received querying the incorporation of the 2020 break and the issue of acid-sulphate soils into the LoF calculation. These factors were then incorporated which resulted in a changed risk rating and a condition assessment was commissioned.

139. Following the 2022 pricing submission to IPART seeking increased funding for operation and maintenance, additional funding began to flow through to CCC commencing with the 2022 – 2023 year. However, that additional funding had not yet resulted in addressing matters such as staff recruitment and expanded condition assessment.

140. The Administrator’s tenure came to an end when a new Council was elected on 14 September 2024 and took office.

Partial Replacement of the WGMJ Rising Main

141. Currently CCC has $11 million allocated to the replacement of the West Gosford Major Sewer Rising Main over the 3 year period commencing 2024 – 2025.

142. CCC is currently subject to a Performance Improvement Order from the Office of Local Government (OLG). One of the terms of the order is a restriction (Condition 6 Schedule 2 Performance Improvement Order 19 September 2024) on the incoming elected Council as follows:

“Council must implement the adopted budget and operations plan for 2024-25. Any significant changes must be agreed by the Deputy Secretary OLG”

143. The delivery of the replacement of the WGMJ Rising Main is incorporated in the current operational plan and is protected by the above condition. The current elected Council is bound by this Order.

Further agreed facts

144. In her expert report dated 18 September 2024, Dr Tanya Mason, concluded that Estuarine Swamp Oak Forest in the vicinity of the 2023 Incident (and on the flow path of the discharge from the Incident) had potentially been degraded as a result of the Incident.

145. An Estuarine Swamp Oak Forest is an endangered ecological community under the NSW Biodiversity Conservation Act 2016 and Commonwealth legislation (Environment Protection and Biodiversity Conservation Act 1999). The community is supratidal (occasionally inundated and influenced by saline groundwater) forested wetland that is dominated by Casaurina glauca as a canopy species and represented by a range of vines, graminoids and forbs in the understorey.

146. Dr Mason describes that potential degradation of the Estuarine Swamp Oak Forest as the product of repeat nutrient pulses (from the 2020 and 2023 Incidents), combined with localised soil disturbance, sand importation and vegetation clearing/damage (associated with access and sewer-main repair activities) and weed propagule availability.

147. Dr Mason states that elevated or fluctuating nutrient loads facilitate establishment by invasive plant species, with weed invasion detrimentally affecting ecosystem functioning and native biodiversity.

4. The parties also agreed as follows:

Further Supplementary Agreed Facts on Sentence - Extract from Dr Pablo’s Report 18 September 2024

Sewage: general characteristics and potential impacts

30. The discharge of untreated sewage into a receiving environment has the potential to cause harm by degrading the quality of the environment. From the characteristics and constituents of untreated sewage (such as excreta, urine and faecal bacteria), there can be public health, aesthetic and environmental impacts.

Public health impacts – pathogens; odour of faecal matter

31. The main biological contaminants found in sewage are microorganisms. Some of the microbial groups present may be disease-causing or pathogenic. These include bacteria, viruses, parasitic organisms (protozoans) and inhaled moulds and fungi (NSW EPA 2003; NRMMC 2004). The potential health risks to humans (National Health and Medical Research Council 2008 ((NHMRC 2008)) who are in contact with biological contaminants in sewage are contracting gastrointestinal and/or acute febrile respiratory illnesses (GI and AFRI respectively). It is not practical to measure all microbial groups present, hence ‘faecal indicator organisms’ are used as surrogate to indicate the likely presence of pathogens in the environment. Faecal coliforms and enterococci, bacteria found in intestinal tracts of warm-blooded animals including humans, are typically used as faecal indicator organisms as they are generally present and abundant in sewage-contaminated environments relative to uncontaminated environments.

32. There are potential risks to recreational users who may be exposed to pathogens that could be present in sewage-contaminated water, through direct contact with sewage in public areas or indirectly by the consumption of contaminated seafood (NSW EPA 2003).

5. The parties have agreed most aspects of how the event arose and the environmental harm caused in the terms identified above.

Mr McPeake’s evidence

6. The EPA engaged Mr McPeake of Lucid Consulting Australia, mechanical engineer, to undertake an assessment and provide advice regarding the events concerning these proceedings, particularly the cause of the sewage discharge from the WGMJ Rising Main between 13-15 April 2023 and whether the WGMJ Rising Main was maintained in a proper and efficient condition by the Council. In a report dated 28 March 2024 Mr McPeake identified a number of measures and actions that the Council should have implemented based on his opinion of what best practice engineering required in order to reduce the risk of a further leak from the WGMJ Rising Main given an earlier leak in 2020 (the 2020 incident). These measures and actions are detailed below in [63], being pars 106-110 of the FASOAF. As I understand the Council’s position, they do not necessarily disagree with Mr McPeake’s opinion about what should have been done. Its case is that the Council did what it could in the difficult circumstances it found itself in.

7. Mr McPeake agreed in cross-examination that he had not visited the WGMJ Rising Main, he undertook a desktop engineering analysis and had not managed a sewerage system. He has expressed his opinion based on best practice procedures without consideration of the Council’s financial ability to carry out the works he recommended or personnel availability and without considering that the Council was under administration. He agreed that it was impossible to eliminate all risk in any engineering system. In pot-holing if a metre from a weak point you would get an indication of the overall condition of an asset, ie you could identify a risk based on degradation. About 50-100 metres of the rising main was at high risk due to its location in acid sulphate soil close to the creek. Preventative measures suggest taking a typical sample of pipe in that location. Corrective measures after an event and a more rapid response to the 2020 incident would have been desirable reflecting a higher priority being given to responding to the 2020 incident. Mr McPeake agreed that replacement was the best solution and he was aware that work had commenced on that project when he was doing his report.

8. In reply, Mr McPeake considered that general maintenance of thousands of kilometres of sewage network and investigation and response to a known failure should all fall under one asset management plan. A previous failure must be taken into account in assessing risk. The higher the consequence of pipe failure the higher the likelihood of recommending a proactive renewal. In September 2021 the likelihood of pipe failure risk rating of the WGMJ Rising Main was three out of five with a condition assessment recommended. That would require potholing. Any pot-holing would ideally take place in close proximity to where a previous failure occurred. The 2020 incident should have been integrated into the risk calculation more quickly than 18 months.

Council’s evidence

Affidavit of Mr Farmer dated 14 November 2024

9. In an affidavit dated 14 November 2024 Mr Farmer current chief executive officer (CEO) of the Council affirmed that he was appointed CEO in April 2021. The Administrators appointed to manage the affairs of the Council focussed on diagnosing and resolving the financial situation which was effectively a cash insolvency problem caused by ongoing annual deficits and ambitious unfunded capital programs. The insolvency required two emergency loans in 2020. The loans required a letter of comfort from the New South Wales (NSW) Government to the relevant bank. Conditions attached to this loan required serious and radical corporate surgery to restore the Council. The recovery program involved a significant curtailment of the capital program, significant reduction in services expenditure, labour costs and asset sales of at least $60 million inter alia. The reduction in labour costs required a major redundancy program. Many people leaving the Council were performing essential tasks. Due to low morale the Council often did not react nimbly to ensure the effective reallocation of tasks.

10. To deploy the recovery program the Administrators imposed significant cost reductions meaning financial constraints on all Council departments including Water and Sewer. The constriction in Water and Sewer expenditure was further reinforced as the Independent Pricing and Regulatory Tribunal (IPART) had also given Council a significant (approximately 20%) decrease in its Water and Sewer income in 2019 for three years. The emergency loans effectively became a contingent liability of the NSW Government and the Office of Local Government required regular updates regarding Council’s financial position and progress of its recovery program.

11. The pressing concern of the Administrators was to keep the Council solvent so the creditors and staff could be paid. The Administrators imposed expenditure restrictions which meant Water and Sewer operations were unable to be subsidised by the rest of the Council and had to be returned to a break-even position. To do maintenance works that it is alleged ‘should have’ been done would have required funds that were not available due to a combination of the 2020 financial crisis and the 2019 reduction in Water and Sewer income by IPART. Overspending allocated budgets was impermissible under the control of the Administrator under the supervision of the NSW Government and the banks.

12. Apart from financial consequences the workforce was demoralised and there was a breakdown of networks and decision-making support. Those remaining had more work to do in a less clear environment and there was a lack of accountability. Three years later the impact of the 2020 financial crisis and returning the Council to sound financial management continues to impact staff and operations. The challenges were compounded by the COVID-19 pandemic which restricted staff functions and supply chains for specialised equipment and expertise.

Mr Drury’s evidence

13. Mr Drury section manager of assets and planning for the Council affirmed an affidavit dated 17 October 2024 largely set out below in [63]. Mr Drury’s affidavit responds to Mr McPeake’s report identifying best practice measures.

Oral evidence

14. In examination in chief Mr Drury confirmed that a number of pot‑holing excavations have been undertaken on the WGMJ Rising Main. There were difficulties in undertaking pot-holing because a golf course, racetrack and water mains were in the vicinity and the area can be boggy.

15. In cross-examination Mr Drury stated that the Council as part of an enforceable undertaking with the EPA finalised a pressure main criticality assessment (PMCA) plan in late 2020. In mid to late 2021 the 2020 incident was assessed within the PMCA framework elevating the WGMJ Rising Main to a high risk category and prompting the requirement for a proactive condition assessment. A tender was awarded in February 2022 and WSP a wastewater engineering consultancy progressed with the condition assessment. The Council was also monitoring the WGMJ Rising Main through its Supervisory Control and Data Acquisition (SCADA) system as part of its business-as-usual operations.

16. The condition assessment involved various steps including spill testing and two larger excavations to allow electromagnetic scanning of the pipe wall. At one location the WGMJ Rising Main was found to be concrete encased which prevented detailed assessment. An alternate location was being planned. The 2023 incident occurred shortly afterwards. Mr Drury accepted that no electromagnetic scanning of the pipe wall was conducted in the vicinity of the 2020 incident prior to the 2023 incident. In some circumstances but not all the SCADA system can look at the pressure in the pipeline and potentially indicate a small issue that can be remedied before a larger failure.

17. Mr Drury agreed the majority of the WGMJ Rising Main is constructed of materials sensitive to corrosion. Frequent inspections are not a practical condition assessment technique for pressure sewer mains. More traditional pressure sewer pipeline condition assessment techniques were relied on being electromagnetic scanning, pothole and excavation work and soil testing.

18. The WSP condition assessment gave a consequence of pipe failure score for the WGMJ Rising Main of five out of five which Mr Drury became aware of in late 2021. Prior to the reclassification of the WGMJ Rising Main as high risk in September 2021 there was no proactive condition assessment of it. Once the reclassification occurred a purchase order was not raised for a condition assessment of the WGMJ Rising Main until February 2022 as there was a procurement phase that had to be undertaken.

19. Mr Drury was not aware of anyone in his department raising with the Administrator at that time that essential work had to be undertaken to get a condition assessment done in the vicinity of the 2020 incident. Mr Drury was not prevented by budgetary constraints in that there was never a direction not to undertake the assessment. It was more the case that the budget wasn’t necessarily enabling things to happen very quickly in terms of the resources they had at hand. The cost of the condition assessment wouldn’t have been so prohibitively great that it couldn’t have been done in the financial circumstances in effect between 2020 and 2023. The Council had sought to have the work undertaken and had allowed purchase orders for the work to be undertaken. It was just the ability of the Council contractor WSP to deliver and for the Council to manage that contractor effectively which affected the time taken.

20. In re-examination Mr Drury explained that constraints imposed by restructuring meant a reduction in staff which made it more difficult to get jobs ‘out the door’. Financially there were requirements to reduce the Council’s expenditure. Water and Sewer was under a constrained budget as all departments were. It was more the lack of personnel that slowed things down in his area of work.

Ms Galea’s evidence

21. Ms Galea, current chief financial officer (CFO) of the Council, gave evidence about the Council’s financial circumstances as a water supply authority under the Water Management Act 2000 (NSW) and its regulation by IPART in relation to pricing for water, sewer and drainage. The evidence in her affidavit dated 17 October 2024 is set out in the FASOAF pars 121-127 including the challenges of providing such services including as a result of the reduced budget for 2019 to 2022 due to the three year determination by IPART.

22. Ms Galea was cross-examined by reference to the Administrator’s 30 day interim report dated 2 December 2020 to the effect that the Council had failed to understand or practice the basics of sound financial management. Ms Galea was not working at the Council at that time. She was aware of its financial history from reviewing the financial records. She was aware that Water and Sewer funds raised by the Council are restricted funds and cannot be accessed for other purposes. The Council undertook an expanded capital program in the years leading up to 2020 funded in part from restricted reserves. While currently all relevant information is sent to the Council there is discretion in what the CEO and CFO tell elected councillors. The financial difficulties arose from a substantial works program in 2019/2020 and the Council also had a significant reduction in income for Water and Sewer of some $48 million over three years. In reducing the allocation to Water and Sewer in 2019 IPART would have looked at the accumulation of surpluses due to higher water sales and continual underspending on operational and capital expenditure for the prior determination period of 2013 to 2018.

23. The Council is subject to a performance improvement order (PIO) issued by the Office of Local Government requiring replacement of the WGMJ Rising Main, presently underway and due for completion in 2026.

72. In deciding whether to make an order pursuant to s 10(1), the court is to have regard to the person’s character, antecedents, age, health and mental condition, the trivial nature of the offence, the extenuating circumstances in which the offence was committed, and/or any other matter that the court thinks proper to consider, see subs (3). All factors identified in subs (3) are disjunctive and non-exhaustive, R v Paris [2001] NSWCCA 83 at [42] (Simpson J), Hoffenberg v District Court of New South Wales [2010] NSWCA 142 at [10]‑[11] (Basten JA with Tobias JA agreeing). None of the factors are conclusive but all must be taken into account, R v Paris at [43] (Simpson J), [48] (Ipp AJA), [49] (Wood CJ at CL), Application by Attorney General (No 3 of 2002) (2004) 61 NSWLR 305; [2004] NSWCCA 303 at [131] (Howie J). The dismissal of charges under s 10 reflects the willingness of the legislature to provide first offenders, in certain circumstances, a second chance to maintain a reputation of good character, R v Nguyen [2002] NSWCCA 183 at [50] (Bergin J with Stein JA and Carruthers AJ agreeing).

73. The circumstances relied on by the Council were based on separating the acts of the Administrator from the Council and its elected representatives. No legal basis for doing so exists, as already held above in [42]. No other reason to do so is apparent. The Administrator’s three reports identified a number of reasons why the Council got into so much financial difficulty largely through actions by its former staff. While no doubt unfortunate for the Council as a whole, the actions of its staff and elected representatives resulted in the Minister determining that an administrator was necessary and that position continued for about four years.

74. Part of the Council’s evidence concerned the effect of its financial difficulties on its day to day operations, with a large number of staff having to leave and the negative impact on staff who remained after extensive retrenchments. The submission was made that it was difficult to progress work, such as the consulting work by WSP. None of these matters were caused by circumstances beyond the control of the Council in that the many errors and omissions which resulted in its parlous financial state were internal to the Council.

75. Further the evidence of Mr Drury in cross-examination was that there was no budgetary reason for not progressing the condition assessment report by WSP. I do not consider it is accurate to describe these unfortunate events as extenuating.

76. The Council is a local council under the LG Act and a water supply authority under the Water Management Act 2000 (NSW) with concomitant statutory responsibilities. It operates a large sewerage system. The offences are not trivial given the amount of sewage that escaped and given the leak occurred in close physical proximity to another major leak in the same rising main some three years earlier. A large volume of untreated sewage escaped into the nearby waterways used by people and supporting ecosystems. There is nothing about the Council’s antecedents and the circumstances of the offences which warrant the exercise of leniency in the way that it seeks in these circumstances.

77. No basis exists to exercise my discretion to apply s 10, or s 10A, to the Council for one or both of the offences, which are closely linked.

Subjective factors

80. A number of mitigating factors where relevant that should be taken into account to reduce any penalty are provided for in s 21A(3) of the CSP Act.

Guilty plea, ss 21A(3)(k), 22

81. The Council pleaded guilty at the earliest opportunity. A plea of guilty entitles the Council to a discount in penalty under s 22 of the CSP Act in the range of 10-25%, R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCA 309 at [160] (Spigelman CJ with Wood CJ at CL, Foster AJA, Grove and James JJ agreeing), R v Sharma (2002) 54 NSWLR 300; [2002] NSWCCA 142 at [21] (Spigelman CJ with Mason P, Barr, Bell and McClellan JJ agreeing). The EPA accepts that there has been a guilty plea at the earliest opportunity. A discount of any penalty of 25% is warranted on this basis.

Contrition and remorse, s 21A(3)(i)

82. The Council has not expressed remorse directly. Its CEO Mr Farmer has sworn a fulsome affidavit dated 14 November 2024 outlining the circumstances the Council found itself in at the time of the offences. Its counsel submitted that this should be considered as relevant to contrition and remorse. Further, Mr Farmer was present in court for the sentencing hearing of two days.

83. The Council is taking appropriate actions which commenced before the 2023 incident of engaging WSP to undertake a condition assessment. This continued after the 2023 incident with that report being completed in July 2023. The Council is subject to a PIO from the Office of Local Government requiring the replacement of the WGMJ Rising Main which is underway.

84. Taking into account all these matters I accept the Council is remorseful.

Assistance to law enforcement authorities, ss 21A(3)(m), 23

85. There has been full cooperation with the EPA in relation to the offences, which were self-reported. In cross-examination Mr Plant Council officer agreed the Council fully co-operated with the EPA’s investigation.

86. The Council has no previous convictions, s 21A(3)(e) CSP Act.

Unlikely to re-offend, s 21A(3)(g)

87. The Council operates a large sewerage system as detailed in the FASOAF pars 14-30 and has had one major leak from the WGMJ Rising Main occur in 2020 before the 2023 incident. A substantial leak occurred at Wamberal in January 2019 following which the Council entered into an enforceable undertaking (FASOAF pars 31-33). This history suggests that I cannot assume the Council is unlikely to re-offend given the scale of its responsibilities, accepting that it is using its best endeavours to achieve its responsibilities.

Other sentencing considerations

General/specific deterrence

88. Section 3A(b) CSP Act states that one of the purposes for a court in imposing a sentence is to prevent crime by deterring offenders. Sentences imposed in relation to environmental offences must embrace powerful considerations of general deterrence, see Axer at 367 (Badgery-Parker J). In Axer Mahoney JA stated at 359:

The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur.

89. The Council’s submission that its unique circumstances do not warrant a penalty for general deterrence purposes is not accepted. As the EPA submitted, all councils face the challenge of budget management and the Council’s financial issues are self-inflicted. Further, as already held above, I must consider the Council as a whole not its constituent parts such as elected councillors and staff.

90. Specific deterrence was referred to in Veen v R (No 2) (1988) 164 CLR 465; [1988] HCA 14 (Veen (No 2)) at 477 (Mason CJ, Brennan, Dawson and Toohey JJ) as being a defendant who displays ‘uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law’.

91. I accept the circumstances in which the Council placed itself are unlikely to be repeated. Substantial measures including the renewal of the WGMJ Rising Main are currently underway so that the likelihood of a repetition of a similar event is greatly reduced. I will not take specific deterrence into account.

Retribution and denunciation

92. Under s 3A(f), (g) of the CSP Act, the Council submitted that it had been punished enough by being prosecuted and pleading guilty. As already observed the Council operates a large sewerage network and its mismanagement can cause harm to the community and the environment. A penalty is warranted and must be adequate punishment.

Even handedness/proportionality

93. The principle of even handedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty, R v Visconti [1982] 2 NSWLR 104 at 107 (Street CJ with Maxwell and Lee JJ agreeing). Per Hoare v R (1989) 167 CLR 348; [1989] HCA 33 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ) an appropriate sentence is to be determined after consideration of each of these matters bearing in mind that:

…a basic principle of sentencing law is that a sentence … imposed by a court should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances (see Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465, at pp 472, 485-486, 490-491, 496).

94. The principle of even handedness in sentencing so that like offences receive like sentences is recognised, but each case must be determined on its own facts, Hili v R; Jones v R (2010) 242 CLR 520; [2010] HCA 45 at [42] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) quoting R v Ruha (2010) 198 A Crim R 430; [2010] QCA 10 at [47]. A history of sentencing in other cases does not limit my sentencing discretion in light of the maximum penalty.

95. A large number of cases of sentencing for broadly similar offences exist. The EPA provided a useful overview of some of these:

1. Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26 concerned the discharge of septic waste from a livestock facility which flowed as runoff into a stormwater drain, a creek, and further dams, council failed to notify the EPA, pleas of guilty to a water pollution offence and to a failure to notify of pollution, one offence at mid‑range and one offence at low range of objective seriousness, one penalty of $180,000 reduced to $130,000, one penalty of $450,000 reduced to $35,000, total penalty of $165,000 imposed;

2. Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80 concerned pollution by effluent from a damaged sewer pipe that was discharged into the ocean, pleas of guilty to a water pollution offence and breach of environment protection licence condition offence found to be at the low to moderate range of objective seriousness, one penalty of $140,000 reduced, one penalty of $140,000 reduced, total penalty of $157,500 imposed;

3. Environment Protection Authority v Hawkesbury City Council [2017] NSWLEC 39 concerned sewage discharge entering a nature reserve, creek and neighbouring property, pleas of guilty to a water pollution offence found to be at the low range of moderate seriousness and two offences of breach of environment protection licence condition, one at the high end of the low range and another in the low end of moderate range of seriousness, penalties of $130,000, $40,000 and $80,000 respectively reduced, total penalty of $175,000 imposed;

4. Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 66 concerned pollution in Kosciuszko National Park with sewage discharge containing high levels of nitrogen and ammonia, plea of guilty to one offence of water pollution found to be at the low range of objective seriousness, penalty of $120,000 reduced to $84,000 imposed;

5. Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100 concerned discharge of raw sewage into Mill Stream, pleas of guilty to two water pollution offences both being in the moderate range of objective seriousness, and one breach of environment protection licence condition offence being in the upper end of moderate range of objective seriousness, penalties of $250,000, $150,000 and $200,000 respectively reduced, total penalty of $269,000 imposed;

6. Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 178 concerned the discharge of treated effluent into Kosciusko National Park containing elevated levels of aluminium chloralhydrate, guilty pleas to one offence of breach of environment protection licence condition being in the moderate range of objective seriousness, and one offence of water pollution being in the low range of objective seriousness, one penalty of $90,000 reduced, one penalty of $185,000 reduced, total penalty of $165,250 imposed;

7. Environment Protection Authority v Sydney Water Corporation [2020] NSWLEC 153 concerned the discharge of untreated sewage into a creek in Lane Cove National Park, pleas of guilty to one offence of breach of environment protection licence condition and one offence of water pollution, both offences being in the high range of low objective seriousness, total penalty of $240,000 reduced to $145,000 imposed;

8. Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 4 concerned an untreated sewage spill into a creek and surrounding bushland, raw sewage washed further into the creek by defendant, pleas of guilty to one offence of breach of environment protection licence condition and one offence of failure to comply with clean-up notice, both being at the high end of low range of objective seriousness, one penalty of $150,000 reduced, one penalty of $150,000 reduced, total penalty of $185,000 imposed;

9. Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 17 concerned the pollution of Toongabbie Creek with untreated sewage, pleas of guilty to two offences of polluting water in the mid-range of objective seriousness with actual harm caused, one penalty of $180,000 reduced, one penalty of $80,000, total penalty of $175,500 imposed;

10. Environment Protection Authority v Charlotte Pass Snow Resort Pty Ltd (No 3) [2022] NSWLEC 136 concerned the pollution of Kosciusko National Park with partially treated sewage effluent containing elevated levels of ammonia and nitrogen due to a failure to maintain diffusers in aeration tanks, pleas of guilty to one offence of water pollution and one offence of breach of environment protection licence condition, both being in the low to moderate range of objective seriousness, total penalty of $240,000 reduced to $144,000;

11. Environment Protection Authority v Sydney Water Corporation (No 2) [2023] NSWLEC 2 concerned pollution of Prospect Creek with treated sewage overflow from a broken rising main following a hearing on liability, involving one offence of water pollution found to be towards the lower end of the low range of objective seriousness, penalty of $200,000 imposed;

12. Environment Protection Authority v Sydney Water Corporation [2023] NSWLEC 68 concerned sewage discharge into Flat Rock Creek, pleas of guilty to three water pollution offences, one offence at upper end of mid-range of objective seriousness and two offences in the lower end of the mid-range of objective seriousness, total penalty of $562,500 reduced to $365,625 imposed; and

13. Environment Protection Authority v Sydney Water Corporation [2024] NSWLEC 130 concerned sewage overflow from a rising main spilling untreated sewage into the stormwater system leading to Homebush Bay, plea of guilty to one offence of breach of environment protection licence condition found to be at the high end of the low range of objective seriousness, total penalty of $250,000 reduced to $200,000 imposed.

96. I have considered these decisions in considering the appropriate penalties for the two offences before me.

Totality

97. Where a court sentences an offender for more than one offence the aggregate or overall sentence must be ‘just and appropriate’ to the totality of the offending behaviour. The High Court has quoted DA Thomas’ exposition of the common law principle (below) on at least three occasions, the most recent being Johnson v R (2004) 78 ALJR 616; [2004] HCA 15 at [18]:

[18] … In Mill [Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 at 63] Wilson, Deane, Dawson, Toohey and Gaudron JJ adopted a statement from Thomas, Principles of Sentencing:

“The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is ‘just and appropriate’. The principle has been stated many times in various forms: ‘when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong[’]; ‘when … cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences’.”

98. Environment Protection Authority v Barnes [2006] NSWCCA 246 at [50] (Kirby J with Mason P and Hoeben J agreeing) suggested that if the sentencer believes that the totality principle requires an adjustment to the fines which may otherwise be appropriate, the amount of each fine should be altered by reducing individual sentences and then aggregating each to determine a total fine amount, see Sentencing Bench Book [8-200].

99. Given that the offences arise from the same circumstances the totality principle will be applied.

Capacity to pay fine

100. In fixing the amount of a fine in relation to the offence I must consider, as required by s 6 of the Fines Act 1996 (NSW), such information regarding the means of the Council that is reasonably and practicably available to the Court. There is no evidence that the Council does not have the capacity to pay a fine.

Penalty

101. The Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a ‘value judgment as to what is the appropriate sentence given all the factors of the case’, Muldrock v R (2011) 244 CLR 120; [2011] HCA 39 at [26] unanimously following Markarian v R (2005) 228 CLR 357; [2005] HCA 25 at [51] (McHugh J). The sentence must reflect all the relevant objective circumstances of the offence and subjective circumstances of the defendant, see Veen v R (1979) 143 CLR 458; [1979] HCA 7 at 490 (Jacobs J) and Veen (No 2) at 472-3 (Mason CJ, Brennan, Dawson and Toohey JJ), 490-1 (Deane J).

102. The appropriate penalty for the offence of failure to maintain the WGMJ Rising Main in a proper and efficient condition is $250,000. This should be discounted by 25% for the early plea of guilty to $187,500.

103. The appropriate penalty for the offence of water pollution is $120,000 which should be discounted by 25% for the early plea of guilty to $90,000.

104. Applying the totality principle the water pollution offence penalty will be further reduced to $70,000.

Section 250(1)(c) order made

105. The Court has discretion under the POEO Act to make orders pursuant to s 250(1)(c) requiring a defendant to carry out a specified project for the restoration or enhancement of the environment in a public place or for the public benefit. Such orders can be made regardless of whether a penalty is imposed, s 244(2), (3). Failure to comply with such an order can give rise to a further offence under s 251. The Council has proposed a project directed to the restoration of the Narara Creek wetland as suitable for such an order. The project can be completed in three stages costed variously at $47,500, $50,700 and $53,700 (total $151,900). The project addresses the environment degraded as a result of these offences and is appropriate to be the subject of orders. The penalty to be imposed will be adjusted to reflect the expenditure of up to $151,900 on the proposed project.

Publication order

106. The EPA seeks an order under s 250(1)(a) of the POEO Act that the Council take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences, and any other orders made by the Court against Council. Publicising sentences for environmental crime improves the effectiveness of sentences as a deterrent. I will make the proposed publication order and also note that the Council accepted that such an order ought be made.

Costs

107. Pursuant to s 257B of the Criminal Procedure Act 1986 (NSW), the Council has agreed to pay the EPA’s costs of $127,500. The amount of costs can be considered in the Court’s discretion in imposing a penalty, Environment Protection Authority v Barnes at [78], [80].

108. The Council has agreed to pay investigation costs of $33,562 pursuant to s 248 of the POEO Act.

Moiety

109. The EPA seeks payment by way of moiety of 50% of any penalties imposed under s 122(2) of the Fines Act. The award of a moiety to a prosecutor is discretionary, Chief Executive, Office of Environment and Heritage v Boyle [2019] NSWLEC 54 at [157]. One circumstance justifying the making of a direction pursuant to s 122(2) is to compensate the prosecutor for the costs and expenses it incurred during the investigation of the offence, Secretary, Department of Planning and Environment v BoggabriCoal Pty Ltd [2014] NSWLEC 154 at [62]. Such an order can also be made to enable contribution to the work undertaken generally by a prosecutor. It is appropriate to make the order under s 122(2) sought by the EPA.

Orders

110. The Court orders that:

1. In matter 2024/134236 the Defendant is convicted of the offence contrary to section 64(1) of the Protection of the Environment Operations Act 1997 (NSW), as charged.

2. In matter 2024/134237 the Defendant is convicted of the offence contrary to section 120(1) of the Protection of the Environment Operations Act 1997 (NSW), as charged.

3. The Defendant is fined the sum of $105,600.

4. Pursuant to section 122 of the Fines Act 1996 (NSW), 50 percent of any fine imposed on the Defendant pursuant to order 3 above, is to be paid to the Prosecutor as a moiety.

5. Pursuant to section 250(1)(a) of the Protection of the Environment Operations Act 1997 (NSW), the Defendant, at its own expense, is to:

1. Within 42 days of the date of this order, cause a notice at a minimum size of 15cm by 15cm to be published within the first 10 pages of the following publications (or as close to the first 10 pages as can be accommodated having regard to the editorial requirements of the newspaper) with the text as set out in Annexure A to these orders:

1. The Newcastle Herald; and

2. Central Coast Community News.

2. Within 42 days of the date of this order, cause a notice to be published with the text as set out in Annexure A to these orders in the digital edition of the Daily Telegraph.

6. Pursuant to section 250(1)(a) of the Protection of the Environment Operations Act 1997, the Defendant, at its own expense, is to:

1. Within 28 days of the date of this order, the Defendant is to publicise the offences and the orders made against it by posting the text of Annexure A to these orders on its Facebook wall, together with a hyperlink directly to the Court’s judgment as published on the New South Wales Caselaw website and tagging the Environment Protection Authority in the post. The Facebook post is to be made between the times of 8am and 10am or between 4:30pm and 6:30pm (Australian Eastern Standard Time) on a weekday. The post must remain a pinned post on Facebook that remains at the top of Central Coast Council’s Facebook wall for a minimum of 7 days; and

2. Within 28 days of the date of this order, cause the Defendant to publicise the offences and the orders made against the Defendant by posting a link to the Facebook post set out in order 6(a), together with a hyperlink directly to the Court’s judgment as published on the New South Wales Caselaw website and tagging the Environment Protection Authority on Central Coast Council’s Instagram account. The post on Instagram is to be made between the times of 8am and 10am or between 4:30pm and 6:30pm (Australian Eastern Standard Time) on a weekday. The post must remain a pinned post on Instagram that remains at the top of Central Coast Council’s wall for a minimum of 7 days.

3. Within 28 days of the date of this order, cause the Defendant to publicise the offences and the orders made against the Defendant by posting a link to the Facebook post set out in order 6(a), together with a hyperlink directly to the Court’s judgment as published on the New South Wales Caselaw website and tagging the Environment Protection Authority on Central Coast Council’s LinkedIn account. The post on LinkedIn is to be made between the times of 8am and 10am or between 4:30pm and 6:30pm (Australian Eastern Standard Time) on a weekday. The post must remain a pinned post on LinkedIn that remains at the top of Central Coast Council’s wall for a minimum of 7 days.

7. Pursuant to section 250(1)(c) of the Protection of the Environment Operations Act 1997, the Defendant is to, at its own expense and to the value of at least $151,900, complete the project set out at Annexure B to these orders (the Project), subject to the following conditions:

1. The Defendant is to erect signs at each entry point to the project area described in Annexure B. The signs are to contain the information set out in Annexure C and:

1. must be installed in an unobscured position at each entry point to the Project area as indicated in Inset 1 in Figure 1 in Annexure B;

2. if damaged or defaced must be rectified by the Defendant as soon as practicably possible; and

3. must not be removed without the written consent of the EPA.

2. The Defendant must every three months provide the EPA with a report on the progress of the Project.

8. Within 14 days of the date of publication of the notices referred to in orders 5 and 6, the Defendant must provide the Prosecutor with a complete copy of the notices as published pursuant to those orders.

9. Pursuant to section 248 of the Protection of the Environment Operations Act 1997 (NSW), the Defendant is to pay the Prosecutor’s investigation costs of the proceedings in the amount of $33,562.

10. Pursuant to section 257B of the Criminal Procedure Act 1986 (NSW), the Defendant is to pay the Prosecutor’s legal costs fixed in the amount of $127,500.

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Annexure A 

Annexure B

Annexure C

Decision last updated: 20 December 2024