Environment Protection Authority v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman (No 2)

Case •

[2016] NSWLEC 120

•

15 September 2016

No judgment structure available for this case.

Land and Environment Court


New South Wales

  • Amendment notes
Medium Neutral Citation: Environment Protection Authority v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman (No 2) [2016] NSWLEC 120
Hearing dates:12 and 13 November 2015
Date of orders: 15 September 2016
Decision date: 15 September 2016
Jurisdiction:Class 5
Before: Sheahan J
Decision:

See paragraph [127]

Catchwords: ENVIRONMENTAL OFFENCES: sentencing – use of land as waste facility without lawful authority – transportation of waste to such land – related civil enforcement proceedings – environmental harm – objective and subjective factors – one defendant placed into voluntary liquidation by another – capacity of defendants to pay penalties – costs – investigation expenses – publication order – remediation order
Legislation Cited: Crimes (Sentencing Procedure) Act 1999
Criminal Procedure Act 1986
Fines Act 1996
Justices Act 1902
Protection of the Environment Operations Act 1997
Protection of the Environment Operations (Waste) Regulation 2005
Cases Cited: Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited (No 2) (2002) 190 ALR 169; [2002] FCA 559
Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357
Bankstown City Council v Hanna (2014) LGERA 39; [2014] NSWLEC 152
Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34
Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683
Director-General, Department of Environment and Climate Change v Jack and Bill Issa Pty Ltd (No 5) [2009] 172 LGERA 225; [2009] NSWLEC 232
Eclipse Resources Pty Ltd v Western Australia (No 4) (2016) 215 LGERA 329; [2016] WASC 62
Environment Protection Authority v Alcobell Pty Ltd, Environment Protection Authority v Campbell [2015] NSWLEC 123
Environment Protection Authority v Barnes [2006] NSWLEC 2
Environment Protection Authority v Capdate Pty Ltd (1993) 78 LGERA 349
Environment Protection Authority (Prosecutor) v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman [2015] NSWLEC 105
Environment Protection Authority v Geoff Robinson Pty Ltd, Environment Protection Authority v Robinson [2011] NSWLEC 14
Environment Protection Authority v Hanna [2010] NSWLEC 98
Environment Protection Authority v Smart Skip (NSW) Pty Ltd [2009] NSWLEC 204
Environment Protection Authority v Terrace Earthmoving Pty Ltd (2013) 84 NSWLR 679; [2013] NSWCCA 180
Environment Protection Authority v Terrace Earthmoving Pty Ltd (No 3) [2016] NSWLEC 50
Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299; [2006] NSWLEC 419
Environment Protection Authority v Wattke, Environment Protection Authority v Geerdink [2010] NSWLEC 24
Environment Protection Authority v Wyong Shire Council [2012] NSWLEC 36
EPA v Barnes [2006] NSWCCA 246
Filippou v The Queen [2015] HCA 29
Geitonia Pty Ltd v Inner West Council; Gertos v Inner West Council [2016] NSWCCA 186
Gittany Constructions Pty Limited v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242
Keir v Sutherland Shire Council [2004] NSWLEC 754
Leichhardt Council v Geitonia Pty Ltd (No 7) [2015] NSWLEC 79
Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 39
Minister for the Environment and Heritage v Greentree (No 3) (2004) 136 LGERA 89; [2004] FCA 1317
Mouawad v The Hills Shire Council (2013) 199 LGERA 28; [2013] NSWLEC 165
Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39
Palfrey v Spiteri; Palfrey v South Penrith Sand & Soil Pty Ltd; Palfrey v Roberts [2014] NSWSC 842
Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178
R v Holder R v Johnston [1983] 3 NSWLR 245
R v Olbrich (1999) 199 CLR 270
R v Rahme (1989) 43 A Crim R 81
R v Sgroi (1989) 40 A Crim R 197
Shannongrove Pty Ltd v Environment Protection Authority (2013) 84 NSWLR 668; [2013] NSWCCA 179
The Hills Shire Council v Kinnarney Civil & Earthworks Pty Ltd (No 2) [2012] NSWLEC 95
Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7
Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14
Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 68
Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 6) [2013] NSWLEC 143
Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 7); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council (No 2) [2013] NSWLEC 157
Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 8) [2013] NSWLEC 168
Texts Cited: United States Sentencing Commission, Guidelines Manual (2014)
Category:Sentence
Parties: Environment Protection Authority (Prosecutor)
Foxman Environmental Development Services (First Defendant)
Botany Building Recyclers Pty Ltd (Second Defendant)
Phillip Foxman (Third Defendant)
Representation:

Counsel:
Mr P English, barrister (Prosecutor)
Mr A Isaacs, barrister (First and third defendants)
No appearance (Second defendant – see [7])

  Solicitors:
Environment Protection Authority (Prosecutor)
Whittens and McKeough (First and third defendants)
N/A (Second defendant)
File Number(s):2016/158950 (formerly 51244 of 2011)2016/159008 (formerly 51251 of 2011)2016/159009 (formerly 51252 of 2011)2016/159126 (formerly 51249 of 2011)2016/159127 (formerly 51253 of 2011)2016/159128 (formerly 51254 of 2011)

Judgment

Introduction

  1. Phillip Foxman (“Foxman”) and the two defendant companies, which are closely associated with him, are now before the Court to be sentenced.

  2. The Environment Protection Authority (“EPA”) successfully prosecuted six charges brought under the Protection of the Environment Operations Act 1997 (“POEO Act”) on 22 December 2011 – Environment Protection Authority v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman (“trial judgment”, or “TJ”) [2015] NSWLEC 105. Mr Phillip English of counsel appeared for the Prosecutor both at trial and at the sentencing hearing.

  3. The penalties prescribed for each of the six offences are $250,000 for an individual and $1 million for a corporation. The POEO Act also provides for daily penalties when offending continues, but none are sought in the present case.

  4. The charges ([30] below) concerned transportation, and placement on land, of “waste” (actually “special”/asbestos waste).

  5. The alleged “waste” was particularised as “material comprising processed construction and demolition waste and asbestos”, and the charges involved its transportation by truck, and the unlawful use of the destination property as a “waste facility” for disposal of “waste”, compliant with the relevant legal definitions, and not covered by any relevant exemptions (trial judgment, at [80] – [143], [181] – [209], and [210] – [258]).

  6. Cases such as this are fraught with complexity in all Australian jurisdictions – in NSW, one need consider only such recent cases as Shannongrove Pty Ltd v Environment Protection Authority (2013) 84 NSWLR 668; [2013] NSWCCA 179 and Environment Protection Authority v Terrace Earthmoving Pty Ltd (2013) 84 NSWLR 679; [2013] NSWCCA 180 to appreciate the complexity of “waste’ cases in this state. While this judgment was reserved, Craig J discussed many of the relevant issues in his judgment in Environment Protection Authority v Terrace Earthmoving Pty Ltd (No 3) [2016] NSWLEC 50.

The Three Defendants

  1. The defendant company Botany Building Recyclers Pty Ltd (“BBR”) is in liquidation, and neither appeared, nor was represented, at the sentencing hearing, but the appointed liquidator was aware of it (Exhibit P3).

  2. Foxman himself had appeared in person for all three defendants at the trial, but, at the sentencing hearing, Mr Andrew Isaacs of counsel appeared for him and for the other corporate defendant, Foxman Environmental Development Services Pty Ltd (“FEDS”) – but not for BBR.

  3. At the trial, Foxman, appearing on behalf of himself and both his companies, was very candid and forthright (TJ [65]), both as witness and advocate, but he made many damaging concessions and admissions, in an effort to explain his behaviour, and argue matters of mitigation, rather than guilt/innocence (TJ [178]).

  4. Foxman gave affidavit and oral evidence at the sentencing hearing as well, and I have had regard to all he said in his written materials, and orally, at both hearings (see Mr Isaacs at T13.11.15, p86, LL6 – 13).

  5. Insofar as Foxman has argued how much better for him and his companies the Western Australian waste and asbestos regimes are, in comparison to NSW, I am fortified in my conclusions, about the material and activities involved in this case, by the recently reported decision of Beech J in the Western Australia Supreme Court, Eclipse Resources Pty Ltd v Western Australia (No 4) (2016) 215 LGERA 329; [2016] WASC 62 (see, re “waste”, pars [500]ff, especially [553]ff).

The Facts in Brief

  1. BBR owned and operated a “materials processing” plant at Banksmeadow, from which site the offending material involved in this matter was transported to, and placed on, 76 ha of land known as “Foxman’s Valley”, near The Oaks in Wollondilly Shire.

  2. “Foxman’s Valley” was purchased by FEDS with the stated objective of becoming Foxman’s retirement home, but he also wanted somewhere to develop his roadbase. It could not lawfully be used for “waste”.

  3. Foxman conceded at trial that he was the “directing mind and will” of both defendant companies (TJ [260], [279], and [284]), and had “complete control” of the actions taken by all three defendants. (See also defence submissions, par 34.)

  4. Although not strictly necessary for the Court to quantify the amount of waste in order to find the offences proved, the Prosecutor established at trial, beyond reasonable doubt, that the material transported and placed comprised/included 15,900 tonnes of “waste” contaminated by asbestos, and/or lead, and/or “foreign matter”.

Enforcement action was taken in both Classes 4 and 5

  1. The actions of these defendants from 2009 onwards came to the adverse notice not only of the EPA, but also of the local Wollondilly Council (“Council”).

  2. That Council brought Class 4 civil enforcement proceedings in this Court, and, on 22 May 2013, Pepper J granted the declaratory and injunctive relief sought in those proceedings: Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 68 (detailed orders at [310]).

  3. On 6 September 2013, her Honour published a sixth judgment ([2013] NSWLEC 143), refusing an application by the three present defendants for a “stay” on her orders.

  4. On 18 September 2013, her Honour published a seventh judgment ([2013] NSWLEC 157), in which she (1) added an additional order requiring BBR to remove the fill from the identified land, and dispose of it at a licensed facility (or facilities), and (2) ordered the three present defendants to pay Council’s costs up to and including 22 May 2013.

  5. On 3 October 2013, her Honour published an eighth judgment ([2013] NSWLEC 168), dismissing a Notice of Motion (“NOM”) by Foxman and FEDS seeking an order “revoking, varying, supplementing or replacing, in whole or in part” the orders in judgment No. 5. BBR was joined in the application by reason of the orders made in judgment No. 7.

  6. In early 2015, Council brought contempt proceedings in the Class 4 matter, and the defendants pleaded not guilty. Those contempt proceedings were case-managed by the Registrar, and then by Pepper J.

  7. The EPA’s six 2011 Class 5 proceedings were defended, and came before me for hearing, together, throughout February and March 2015.

  8. I reserved my Class 5 decision on 31 March 2015.

  9. Pepper J recorded on the Class 4/contempt file, on 17 April 2015:

[Respondents] broke and cannot afford to comply with orders. Council accepts land won’t be remediated but want it capped and stabilised. BBR now in liquidation. ...

  1. On 1 June 2015, her Honour noted:

Advanced draft deed being finalised by the parties to resolve the matter. Experts still conferring. ...

  1. On 25 June 2015, her Honour noted:

Deed finalised but not executed because Mr Foxman wanted legal advice on some discrete terms of the Deed. ... Foxman now overseas to return mid July ...;

and stood the contempt matter over to 27 July 2015, noting:

If no Deed signed and consent orders made on that day, Court to make orders setting down foreshadowed contempt N of M for hearing.

  1. I delivered my judgment in the Class 5 matters on 30 June 2015.

  2. On 27 July 2015, Pepper J noted on the Class 4 file:

Foxman now convicted in Class 5 and Council wishes to consider its options with respect to sentencing, [and so] doesn’t pursue contempt proceedings at this time.

[Therefore] matter completed.

  1. The Class 5 sentencing hearing, consequent upon my judgment of 30 June 2015, took place on 12 – 13 November 2015.

The Six Charges Found Proven

  1. My formal findings on guilt were set out (TJ [306]) in these terms (emphasis and new matter numbers added):

306   ... I find the defendants guilty of all the offences charged, namely:

(1)   In relation to Foxman Environmental Development Services Pty Ltd that, from about 1 May 2009 to about 30 September 2013, as the owner of the Land, it used the Land as a waste facility without lawful authority in contravention of s 144(1) of the POEO Act (matter 51244 of 2011[now 2016/158950]).

(2)   In relation to Botany Building Recyclers Pty Ltd that:

(a)   between about 1 May 2009 to 30 September 2009 inclusive, it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act (matter 51251 of 2011 [now 2016/159008]); and

(b)   between about 12 January 2010 to 22 April 2010 inclusive, it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act (matter 51252 of 2011 [now 2016/159009]).

(3)   In relation to Phillip Foxman, by reason of s 169(1) of the POEO Act that:

(a) between about 1 May 2009 to about 30 September 2013, he committed an offence in contravention of s 144(1) of the POEO Act (matter 51249 of 2011 [now 2016/159126]);

(b) between about 1 May 2009 to 30 September 2009 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act (matter 51253 of 2011 [now 2016/159127]); and

(c) between about 12 January 2010 to 22 April 2010 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act (matter 51254 of 2011 [now 2016/159128]).

  1. The relevant sections of the POEO Act, as they stood at the relevant dates, were set out in the TJ (at [22]), but are repeated here for completeness:

143   Unlawful transporting or depositing of waste

(1)   Offence

If a person transports waste to a place that cannot lawfully be used as a waste facility for that waste, or causes or permits waste to be so transported:

(a)   the person, and

(b)   if the person is not the owner of the waste, the owner,

are each guilty of an offence.

Maximum penalty:

(a)   in the case of a corporation—$1,000,000, or

(b)   in the case of an individual—$250,000.

...

(4)   Definitions

In this section:

...

owner of waste includes, in relation to waste that has been transported, the person who was the owner of the waste immediately before it was transported.

...

144   Use of land as waste facility without lawful authority

(1)   A person who is the owner or occupier of any land and who uses the land, or causes or permits the land to be used, as a waste facility without lawful authority is guilty of an offence.

Maximum penalty:

(a)   in the case of a corporation—$1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or

(b)   in the case of an individual—$250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.

(2)   In any proceedings for an offence under this section the defendant bears the onus of proving that there is lawful authority to use the land concerned as a waste facility.

...

169   Liability of directors etc for offences by corporation—offences attracting special executive liability

(1)   If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that:

(a)   (Repealed)

(b)   the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or

(c)   the person, if in such a position, used all due diligence to prevent the contravention by the corporation.

  1. In respect of the two s 143(1) offences committed by BBR (par (2) of [306]), and the two related offences by Foxman (pars (3)(b) and (c) of [306]), the relevant volumes of waste transported and placed were 5,800 tonnes (in 2009), and 10,100 tonnes (in 2010).

The Trial Judgment

  1. In its written submissions on sentencing (pars 2 to 5), the Prosecutor drew attention to a number of paragraphs in my trial judgment, namely [2], [12], [13], [52], [53], [56], [58], [137] – [143], [185], [195], [196], [207], [224], [257], and [305].

  2. Those extracts covered:

  1. the relevant operational history of the placement of material;

  2. the defendant’s extensive dealings with regulators, trying to secure relevant approvals or exemptions;

  3. the amount of fill (15,900 tonnes, TJ [58]), an amount “well above that required by [Foxman’s] 2009 consent” (TJ [56] and [195]); and

  4. the “substantial alteration caused by [its] deposition ... on the land, in two separate stockpiles” (TJ [185]).

  1. In the interests of brevity, I will not repeat all that material, but some of those paragraphs deserve particular notation, as do some others to which counsel referred during the sentencing hearing.

  2. Firstly, I set out pars [207], [257] and [305] of the TJ:

207 I am, therefore, satisfied beyond reasonable doubt that all the material transported and deposited at the land by BBR in the relevant periods was “waste”, as defined in the POEO Act.

...

257   For all those reasons, I am not satisfied, on the balance of probabilities, that the defendants had the benefit of any exemption entitling them to (lawfully) deposit the offending material at the subject land.

...

305 For those reasons, I am satisfied beyond reasonable doubt that BBR “caused” the material to be transported to the land. For the same reasons as given in respect of his personal guilt of the dumping offences (see [277] – [282] above), Foxman is guilty of both charges in respect of unlawful transportation of waste under s 143(1).

  1. For completeness, I should also repeat now TJ pars [277] – [282] (cited in [305], quoted immediately above):

277 In certain prescribed circumstances, officers of a company that contravenes the POEO Act will also be guilty of the same breach (see s 169(1), at [22] above).

278   Biscoe J in Director-General, Department of Environment and Climate Change v Jack and Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232; 172 LGERA 225 at [79], [82] – [83], discussed the legal principles surrounding the liability of corporate defendants for the conduct of its directors/employees, these principles are relevant in the attribution of liability to individuals for the conduct of corporations (emphasis mine and citations omitted):

79    A company can only act through living persons. In determining whether criminal liability should be attributed to a company for the conduct of a person, a distinction has been drawn between, on the one hand, a person who is the embodiment of the company because, often, he is its relevant “directing mind and will” and, on the other hand, an agent or servant for whom the company is vicariously liable. The former represents an organic theory of liability, the latter an agency theory of liability. The distinction is particularly significant for offences in which mens rea is an element where prima facie (absent a contrary legislative intention) a principal is not vicariously responsible for the acts of agents …That inhibition is absent in strict liability offences because mens rea is not an element:

…

82    Although the formula “directing mind and will” is often the most appropriate description of the person designated by the relevant rule attributing personal conduct to a company, that is not so in all cases. The real question is, on the proper construction of the statute, whose act is intended to count as the act of the company?

…

83    The act of a high-level employee or director may count as the act of the company because they represent the company’s directing mind and will. But even the act of a low-level employee may count if that is required by the terms of the offence and the achievement of the policy objectives of the statute…Conduct of low-level employees, who did not represent the company’s directing mind and will, has repeatedly been held to be sufficient in cases concerning regulatory offences where legislation regulated a sphere of social or economic activity in the public interest (see the cases reviewed in the ABC Developmental Learning Centres case at first instance at [10] – [14]). They are analogous with the present case.

279   There is absolutely no doubt that Foxman was the “directing mind and will” of FEDS, and that the actions of FEDS are directly attributable to him, and vice versa. Foxman conceded that he had complete control over the actions of FEDS (see [15] above).

280    It was Foxman’s intention that the waste be stockpiled (on the land) for future use on the roads at Foxman’s Valley, and that was a reason for completing the purchase in FEDS’s name (see Exhibit P8, and Tp1115, L38 – p1116, L37).

281   The evidence of Roy Howell is that Foxman directed him as to where “to place and/or spread the material at Foxman Valley” (Exhibit P13, tab JI-7, Q 84). Pursuant to those instructions, Roy Howell directed truck drivers who delivered material to the site from the Banksmeadow facility (Exhibit P6, tab 29, Q96 – 116).

282 For those reasons I am satisfied that Foxman is also guilty of the/a breach of s 144(1) of the POEO Act.

  1. As the Prosecutor correctly submitted (par 5), I made the following factual and legal findings in coming to those conclusions (references to TJ pars):

i. As part of its business activity, waste derived material was received and processed at BBR's waste recycling yard located at 38 McPherson Street Banksmeadow NSW. After a combination of sorting, crushing and screening, certain classes of these recycled materials were transported and deposited at the Land ([2]). The instructions for the transportation and deposition of this material came from Mr Foxman ([207], [305]).

ii. Mr Foxman and BBR had, during period from 2008 to 2011, applied on four separate occasions for either a new general exemption or a specific waste resource recovery exemption for the recycled processed material created at BBR's Banksmeadow facility ([137]). On each of these occasions, contaminant thresholds were proposed which were higher than the relevant general exemption in existence at the time. None of these applications were successful ([138] – [143]).

iii.   FEDS's decision to purchase of the Land was conditional upon it obtaining development consent ([52]). Although Mr Foxman originally thought that the Land could be used for the development of a golf course linked to landfill, he later gave up on this idea after realising that such a project may be designated development ([53]). Eventually, on 16 March 2009, Wollondilly Shire Council granted consent for the development of a "single storey dwelling, detached garage, pool, spa, water tanks and fire trail" on the Land ([56]) (2009 Consent).

iv.   The amount of material that was transported and applied to the Land was well above that required by the 2009 Consent ([195]). The excess application of fill material to the Land is consistent with Mr Foxman's original plans for the Land, including his instructions to his employee to search for a poor quality site that he could then purchase ([196]).

v. All of the material that was transported to the Land was waste within the Dictionary definition of the POEO Act ([207]), and none of it satisfied the criteria of any specific or general waste resource recovery exemption issued pursuant to cll. 51 and 51A of the Protection of the Environment Operations (Waste) Regulation 2005 (Waste Regulations) ([257]). As a consequence, all of the waste material was required to be disposed of at a landfill site that was able to receive that class of waste, namely special waste – asbestos waste ([12]). The Land was not such a site ([13.a]).

  1. I do not accept Mr Isaacs’s written submission (pars 11 – 25) that the quantity 15,900 tonnes was not proven beyond reasonable doubt at trial (see [15] above).

  2. In fact, the defendants did not really contest that quantum at trial, and I found the evidence more than sufficient to discharge the Prosecutor’s onus in respect of it.

  3. Mr Isaacs wrongly relied upon pars [208] and [209] of my trial judgment as showing some “doubt” in my conclusion, at [207] (quoted in [36] above), so I now set out those paragraphs in their context:

Conclusion on “Waste”

207 I am, therefore, satisfied beyond reasonable doubt that all the material transported and deposited at the land by BBR in the relevant periods was “waste”, as defined in the POEO Act.

208 Even if I be incorrect in that finding, at a minimum, the defendants’ own expert (Lau) conceded (and by virtue of s 87(1) of the Evidence Act 1995, so did Foxman) that the following was disposed, and/or stored at, the land (Exhibit D11, p19 and Tp 761, L 34 – p 762 L 5):

(a)   600 tonnes of General Solid Waste; and

(b)   380 – 850 tonnes of asbestos waste.

209   The precise amount of “waste” transported is no more than a particular of the offence. All that must be proved is that some “waste” was transported to/disposed of at Foxman’s Valley (prosecutor’s subs, par 162).

  1. During cross-examination in the sentencing hearing, on 12 November 2015, the following exchange occurred between Mr English and Foxman (T12.11.15, p54, LL35 – 37):

Q.   Mr Foxman, BBR transported 15,900 tonnes of material to Foxman’s Valley. Correct?

A.   Yes.

Sentencing provisions and principles

  1. In relation to sentencing, the following objects of the POEO Act, as set out in s 3, are relied on by the Prosecutor in this matter, in accordance with the principles in Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178:

(a)   to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development,

...

(d)   to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following:

(i)   pollution prevention and cleaner production,

(ii)   the reduction to harmless levels of the discharge of substances likely to cause harm to the environment,

(iia) the elimination of harmful wastes,

...

(e)   to rationalise, simplify and strengthen the regulatory framework for environment protection,

...

  1. The most relevant statutory purposes of sentencing in a case such as the present are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (“the CSP Act”) (Prosecutor’s subs 6 and 7):

(a)   to ensure that the offender has been adequately punished for the offence;

(b)   to prevent crime by deterring the offender and other persons from committing similar offences;

...

(e)   to make the offender accountable for his or her actions;

(f)   to denounce the conduct of the offender; and

(g)   to recognise the harm done to the victim of crime and the community.

  1. The POEO Act lists, in s 241(1), some relevant considerations for courts to take into account when assessing the objective seriousness of offences charged under the Act:

(a)   extent of actual or likely harm to the environment;

(b)   practical measures which may have been taken to prevent, control, abate or mitigate the harm;

(c)   the foreseeability of the harm caused or likely to have been caused to the environment;

(d)   control over the causes giving rise to the offence; and

(e)   compliance with orders from an employer.

  1. Against the background of those statutory provisions, Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34 lists the following additional factors to consider in assessing objective gravity or seriousness of any offending:

(a)   the nature of the offence;

(b)   maximum penalty for the offence;

(c)   the Offender's state of mind in committing the offence; and

(d)   the Offender's reasons for committing the offence.

  1. The penalty to be imposed in a particular case is to be determined by what the High Court called “an instinctive synthesis of all the relevant objective and subjective circumstances of the offence and the offender”, and must be proportionate to those factors: Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 39; Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39; Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7; Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14.

  2. Whereas the objective gravity of the offence establishes both an upper and a lower limit for the penalty, “the subjective mitigating features should never produce a sentence that fails to reflect the gravity of the incident, or the objectives of punishment, which include both retribution and deterrence”: Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299; [2006] NSWLEC 419, at [140].

  3. Those matters adverse to an offender must be established by the Prosecutor beyond reasonable doubt, while the onus on the offender in arguing matters favourable to it is on the balance of probabilities: R v Olbrich (1999) 199 CLR 270; Filippou v The Queen [2015] HCA 29 (at [64] and [66]).

  4. Section 21A of the CSP Act catalogues some “aggravating, mitigating, and other factors” which can affect the sentence. It provides:

(1)   General

In determining the appropriate sentence for an offence, the court is to take into account the following matters:

(a)   the aggravating factors referred to in subsection (2) that are relevant and known to the court,

(b)   the mitigating factors referred to in subsection (3) that are relevant and known to the court,

(c)   any other objective or subjective factor that affects the relative seriousness of the offence.

The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law.

(2)   Aggravating factors

The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows:

...

(d)   the offender has a record of previous convictions ...

...

(g)   the injury, emotional harm, loss or damage caused by the offence was substantial,

...

(i)   the offence was committed without regard for public safety,

...

(n)   the offence was part of a planned or organised criminal activity,

(o)   the offence was committed for financial gain,

...

The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.

(3)   Mitigating factors

The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows:

(a)   the injury, emotional harm, loss or damage caused by the offence was not substantial,

(b)   the offence was not part of a planned or organised criminal activity,

...

(e)   the offender does not have any record (or any significant record) of previous convictions,

(f)   the offender was a person of good character,

(g)   the offender is unlikely to re-offend,

(h)   the offender has good prospects of rehabilitation, whether by reason of the offender’s age or otherwise,

(i)   the remorse shown by the offender for the offence, but only if:

(i)   the offender has provided evidence that he or she has accepted responsibility for his or her actions, and

(ii)   the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both),

...

(m)   assistance by the offender to law enforcement authorities ...

...

(5)   The fact that any such aggravating or mitigating factor is relevant and known to the court does not require the court to increase or reduce the sentence for the offence.

...

  1. As the Court has noted in other cases, the absence of an aggravating factor to be considered against an offender is not itself a mitigating factor to be considered in the offender’s favour, and vice versa.

Orders now sought in Class 5

  1. The Prosecutor seeks that all three offenders be convicted, and fined, and also ordered to pay the Prosecutor’s costs, and its investigation expenses.

Costs and Expenses

  1. The investigation expenses have been agreed in the amount of $4,646 (detailed in the affidavit of Blackman 10 November 2015, and payable pursuant to s 248(1) of the POEO Act).

  2. The defendants ask that any order that they pay the Prosecutor’s costs should be on an “agreed or assessed” basis (under s 257B of the Criminal Procedure Act 1986). The Prosecutor estimates its costs at $500,000 (T13.11.15, p90, LL12 – 29, and p91, LL31 – 48).

Publication Order

  1. In addition to the payment of fines, costs and expenses, the Prosecutor seeks a “publication order”, under s 250(1)(a) of the POEO Act, against all three defendants, and in the form of Annexure ‘A’ to the Prosecutor’s submissions (dated and filed 30 October 2015).

Remediation Orders

  1. The Prosecutor also seeks the following “remediation” orders, which are generally in line with the orders made by Pepper J in the Class 4 matter, and generally reliant on the work of the EPA expert, Dr Daniel Michael Martens (Prosecutor’s subs par 70, as varied by its SMO, sub-pars v – vii), against the defendants Foxman and FEDS:

v.   Within 90 days of the date of this order, [FEDS] and Phillip Foxman must remove, or procure the removal of, the fill material from the land as identified in the Lean & Hayward survey dated 26 May 2010 annexed [to these submissions] and marked “B” and dispose of the waste at a waste facility or facilities licensed under the [POEO Act] to accept such waste.

vi.   Within 118 days of the date of this order, the Prosecutor’s expert shall file an affidavit with the Court setting out the Offenders’ compliance or otherwise with order (v) above.

vii.   Within 90 days of the date of these Orders or whichever other period the Court thinks appropriate, [FEDS] and / or Phillip Foxman are to provide receipts to the Prosecutor evidencing the lawful disposal of the waste the subject of the proceedings at a facility or facilities licensed under the [POEO Act] to accept such waste.

  1. This Court has heard nothing further about any deed or further consent orders affecting Pepper J’s orders in the Class 4 proceedings, so her Honour’s remediation orders stand ([19] above).

  2. In his evidence before me, Foxman estimated the costs of such “clean up” action at between $10M and $15M (T12.11.15, p54, LL23 – 33):

Q.   Now, you've indicated in your accounts an estimation, it's a director's estimation that the clean up bill at Foxman's Valley, pursuant to Pepper J's orders, would cost in the realm of $15 million. Is that right?

A.   It's an estimate of between $10 and $15 million, yes.

Q.   How did you come up with that estimate, Mr Foxman?

A.   From the Len Hayward survey which was about 15 or 16,000 cubic metres and we did a conversion factor of 2.2 tonnes to the cubic metre, came up with over 30,000 tonnes at approximately 300 to $350 per tonne for transport and tip fees including waste levies and plus there would be transport costs as well as machine hire and on site rehabilitation.

  1. Foxman then gave the following evidence about related transportation costs (Tp55, LL1 – 7):

Q.   Mr Foxman, how much do you estimate the transportation costs in respect of the remediation works would cost?

A.   Well, the transportation side of it? I think we had a price from Dial A Dump at Eastern Creek that would accept the material and I think, the transport costs, they were looking at about $15 a tonne just for transport and then they wanted 300 or $350 a tonne as a tip fee which included the waste levy;

and he agreed (L23) that Foxmans Holdings Pty Ltd could be contracted to assist with some of the remediation works.

  1. In response to the proposal for a remediation order similar to that made in the Class 4 proceedings, Mr Isaacs submitted (par 63):

Your Honour would not in my submission, entertain an order for restoration as proposed by the prosecutor for precisely the reason identified by the prosecutor that being that orders already exist in the class 4 proceedings. I submit that an order of this kind in these proceedings is potentially a fraught course as Mr Foxman would find himself subject to two different orders to carry out the same task arising from two different judgements of this Court. That has potential for difficulty, particularly in light of the fact that Mr Foxman and the Council have since the imposition of those orders been engaged in further proceedings relating to them brought by the Council that has led to subsequent discussions that may ultimately lead to an application to vary the class 4 orders.

  1. I do not accept that submission (discussed at T12.11.15, p20, L46 to p24, L10). If a remediation order is to be made, and I believe one should, it should mirror that already extant in the civil enforcement matter.

Consideration

  1. In arriving at the appropriate sentencing outcomes, the Court must now undertake the “instinctive synthesis” of objective and subjective factors and circumstances ([47] above).

Objective circumstances

  1. As already noted ([56] above), the Prosecutor relied in this sentencing hearing upon the expert evidence of civil and environmental engineer, and scientist, Dr Daniel Martens, sworn on 15 October 2015, as to harm caused to the environment by the subject offences.

  2. In the end, after Mr Isaacs had the opportunity to review Exhibit P19 from the trial, Martens was not required by the defence for any cross-examination.

  3. I had preferred and accepted his evidence at trial (TJ [243]), and I accept his updated evidence on sentence.

  4. For the purposes of the sentencing hearing, Dr Martens prepared two reports (“DM1” dated 14 September 2015, and “DM2” dated 15 October 2015), giving, as requested by the Prosecutor (on 6 August 2015), his expert opinion on:

(a)   the extent of any environmental harm (actual and potential) caused, or likely to be caused, by the application of the material in the Eastern Fill Area and the Western Fill Area to the land;

(b)   the nature of any risks to the environment or human health posed by the presence of the waste on the land.

  1. On 3 and 4 September 2015, the Prosecutor made further requests of Dr Martens:

  1. It sought his expert opinion on:

“Options for steps that could be taken to:

a.   Prevent, control or mitigate any harm to the environment caused by the application of the material to the land in the Eastern Fill Area and the Western Fill Area.

b.   To make good any environmental damage resulting from the depositing of the material to the land in the Eastern Fill Area and the Western Fill Area.

c.   Otherwise remediate or clean up the to the land in the Eastern Fill Area and the Western Fill Area.

You are aware of the orders made by Justice Pepper in the Class 4 proceedings. Your opinion is sought as to whether those orders are the most appropriate option or if any alternative orders would be better from an environmental perspective. Please provide reasons as to any opinions you hold in this regard.”

and

  1. It sought his assessment of “the alternative draft Remediation Action Plan prepared by Andrew Lau”, Foxman’s expert, which was being discussed between the Class 4 parties (see [24] – [26] above).

  1. Martens opines (DM1, ss 2.1 and 2.2) that the deposition of waste materials on the surface of land causes both actual environmental harm, by contamination of existing ecological systems, and the potential for future environmental harm, through further contamination and pollution, including by leachate. Such contamination/pollution poses an ongoing threat to human health through direct contact with asbestos, and/or leachate, and/or contaminated storm water entering local water systems.

  1. The best way to mitigate such harm, in his view, would be (DM1 s 2.3) to remove the offending material to a suitable (as in “secure and licensed”) off-site waste disposal facility, and remediate the site to its pre-fill condition, as ordered by Pepper J. He opines (DM2 ss 2.1 and 2.3) that retention on site of any part of the contaminated fill is “unacceptable”, and that her Honour’s orders should not be changed.

  2. These opinions sit comfortably with the principles laid down, in respect of assessing actual, likely and potential harm, by authorities such as Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299. As Craig J observed in Environment Protection Authority v Hanna [2010] NSWLEC 98 (at [38]), the POEO Act presumes that environmental harm is caused whenever waste is disposed of other than at a licensed facility.

  3. All of Martens’s evidence indicates that the environmental harm caused was quite significant.

  4. The significant maximum penalties provided for offences such as these indicates the seriousness with which Parliament views such conduct: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (“Camilleri”) (1993) 32 NSWLR 683.

  5. Many POEO Act offences are “strict liability”, but their objective seriousness increases if they are committed intentionally, recklessly or negligently: Gittany Constructions Pty Limited v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242, at [123].

  6. Foxman (directly, and as the controlling mind of his companies) clearly intended to transport the offending material to Foxman’s Valley, and have it placed at particular locations on that property.

  7. He was fairly well informed of the detailed regime covering waste disposal and exemptions, and admitted at the trial some consciousness of his material’s non-compliance with that regime, but he considered the regime impractical and too strict, and structured his operations accordingly.

  8. He wanted, at the same time, to improve his proposed retirement property, to maximise the capacity of his fee-charging Banksmeadow plant, and to develop at Foxman’s Valley a profitable roadbase product, avoiding the payment of waste levies (estimated to amount to $936,510.00).

  9. Mr Isaacs conceded (par 39) that:

... the state of mind of Mr Foxman would better be described as reckless or negligent rather than intentional as propounded by the prosecution ...

  1. Applying the most charitable construction to his behaviour, Foxman displayed recklessness regarding the presence of asbestos in the fill material, and its possible impact, and he acted very deliberately in moving it to, and placing it at, Foxman’s Valley.

  2. All the resulting harm was foreseeable (s 241(1)(c)), and within Foxman’s control (s 241(1)(d)), and simple practical measures were available to him to “prevent, control or mitigate” that harm (s 241(1)(b)). (See [45] above.)

  3. Mr Isaacs submitted (T13.11.15, p84, LL27 – 31) that:

... this matter does not fall at the upper end of the range, ... but rather is at the mid range of objective seriousness for an offence of this kind. I accept that it is not at the lower end of the range; I don’t make that submission, but is rather fixed towards the mid-range of objective seriousness, for a number of reasons.

  1. I do not accept that characterisation.

  2. I have concluded that the combined objective seriousness of these offences, in terms of the harm occasioned to the environment, and to the regulatory system, is moderate-to-high (s 241(1)(a)), especially as a direct result of the placement, if not also the physical act of transportation.

Subjective Considerations

  1. In terms of the s 21A(3) factors ([50] above), the written submissions of the Prosecutor (par 49) accepted, as mitigating factors, that the offenders had no prior convictions for environmental offences, and put to the Court that Foxman had evidenced actual remorse in one of his affidavits of 23 October 2015.

  2. The submission about “no convictions” was withdrawn at the hearing (T12.11.15, p17, L12 – p18, L7), and the Prosecutor tendered a certificate of conviction in respect of BBR (Exhibit P1). That matter had been the subject of some evidence at the trial (TJ [46]). The relevant breaches of an environmental protection licence occurred on 28 August and 26 November 2008, and were dealt with by fines totalling $8900, and costs orders totalling $7576, at Burwood Court on 18 May 2010, after BBR pleaded guilty.

  3. Nonetheless, as Mr Isaacs submitted in respect of Foxman himself (T13.11.15, p86, LL27 – 28), “he’s got no previous convictions for similar or related environmental offences”. However, in terms of Foxman’s own record outside the environmental field, the Prosecutor refrained (T12.11.15, p17, LL1 – 10) from tendering his “criminal history”, once Mr Isaacs had indicated he would not submit that Foxman was “of prior good character”.

  4. I made some positive remarks about Foxman in my trial judgment ([61] – [73]), and Mr Isaacs tendered several “references” (Exhibit F2) in his favour, including an award from a Minister in the Israeli Government in recognition of his “outstanding voluntary activities in the field of environment in Israel”.

  5. Several of the letters addressed to the Court by prominent people, including the Chief Rabbi/Minister from the Central Synagogue in Bondi Junction, make reference to those activities, and to his activities in relevant industry organizations.

  6. Mr Albert Dadon AM, Executive Chairman of “Ubertas” Funds Management Group, says:

At first impression you may think that Mr Foxman may be rough on the edges, but don’t be mistaken, this is a man that is very dedicated and has proved that he is rigorous about his undertakings and responsibilities. My personal experience of Mr Foxman is that he is a trustworthy individual who deserves the benefit of the doubt.

  1. In terms of remorse, I acknowledge that, after a hard fight, Foxman has accepted my adverse findings against him and his companies. To put his position fairly, I note that he relevantly deposes:

6   I accept the Judgment and I deeply regret my actions and any actual or potential environmental harm my actions may have caused.

7.   In response to the findings of fact by the Court in the Judgment, l wish to express that it was never my intention to cause any environmental harm as a result of my actions. Nor was it my intention that the transportation or the disposal of this material on the relevant property was done for the purpose of obtaining a profit.

8   When I transported this material in a manner in which the Court has found breached relevant laws, I wish to make it clear that I still made all possible attempts to use this material in an environmentally responsible manner. Practically, this involved using the material as road base. I was also acting on the honest belief that I held at that time that it was permissible to use the material for this purpose under the environmental regulations.

9   It is also my position that I exercised care and due diligence, as I understood it, when transporting and disposing of this material, with the aim of minimising any risk of contamination. I did that by employing a site management plan at the Banskmeadow site for the purpose of detecting asbestos and other containments. Specifically, these procedures included: a thorough visual inspection of the truck load, firstly from a weigh bridge, followed by a second, closer inspection; a refusal on my part to accept loads where I suspected there was a risk of contamination; and also a further closer inspection once the material had been delivered and spread at the facility.

10   It was my honest belief held at the time that I was attempting to do the right thing in the processes l employed. This was particularly so given my belief that the exemptions for recycled material were so restrictive that they ran counter to the express policy of the recycling of construction waste, which should be encouraged within appropriate environmental safeguards. It was also my honest belief held at that time and at all times I (sic) that I was complying with Environmental Protection Authority requirements when the materials were being transported and also when they were being used on the land. However, I accept that the Court has found against me on those points, and I sincerely regret and apologise for any environmental harm my actions may have caused as a result of my mistaken beliefs I held at the relevant time.

11   l wish to emphasise that the regulations in this area are particularly technical and complex, often making it difficult to understand obligations in this area when attempting to comply with the relevant laws. I ask the Court also take into consideration the significant regulatory burden of complying with all legislative instruments which govern waste and asbestos, and the significant practical difficulties in complying with these extremely technical regulations.

12   I accept the Court's Judgment. I have deep remorse for any actual or potential environmental harm these actions may have caused.

  1. Mr English noted (T13.11.15, p82, LL41 – 43):

Remorse is accepted through his affidavit. Insight perhaps a little less so by reason of his evidence that he still in effect disputes that all of the material was waste in accordance with your Honour's finding.

  1. In respect of aggravating factors (s 21A(2) in [50] above), the Prosecutor submitted (par 49) that the environmental harm caused was substantial, and that the offences were committed for financial gain, involved significant organization and planning, and were committed without regard for public safety.

  2. I am satisfied that financial gain was one, but not the only, motive for the commission of the offences (T13.11.15. p84, LL41 – 43), and I accept that the prosecution has established, beyond reasonable doubt, the other aggravating factors.

Sentencing Issues

Financial Capacity

  1. In terms of the financial capacity of Foxman and his companies to pay a substantial penalty, the Prosecutor does not accept the alleged impecuniosity of Foxman and FEDS, as asserted by Foxman in one of his affidavits of 23 October 2015, and in his oral evidence.

  2. In his relevant affidavit, to which he exhibited a folder of financial materials (Exhibit F1), he deposed:

4   From the enquiries and searches which I have conducted and caused to be conducted I have formed the opinion that l have no net assets now or as at 28 October 2015 and I am unlikely to have any net assets in the future.

5   I refer to the Statement of Assets & Liabilities of Phillip Foxman and confirm that in my opinion my net liabilities on a rounded basis range between $11.4 million and $16.4 million.

  1. I, therefore, found his oral evidence regarding his financial affairs and those of his family and various companies quite unsatisfactory and unconvincing. The fact is that he moved to a dramatic restructure of his affairs following Pepper J’s orders.

  2. He has apparently paid his own costs of the Class 4 proceedings (T12.11.15, p42, LL10 – 12), but has undertaken none of the ordered remediation work, and has not yet paid Council’s costs.

  3. I, therefore, find myself in a similar position to that faced by the learned Chief Judge in Bankstown City Council v Hanna (2014) LGERA 39; [2014] NSWLEC 152, where his Honour said (at [181]):

I consider that the evidence of Mr Hanna's financial circumstances available to the Court is "largely indefinite": see Environment Protection Authority v Capdate Pty Ltd [(“Capdate”)] (1993) 78 LGERA 349 at 353. The evidence is insufficient to justify reducing the fines on account of his financial circumstances. It is also relevant, in the exercise of the discretion under s 6 of the Fines Act, that his indebtedness and liability to pay to the State the accumulated fines and other penalties is self-inflicted. It is a product of Mr Hanna's persistent and habitual offending and his continued failure to pay the vast majority of the fines and other penalties imposed for this offending. It is not just or appropriate for Mr Hanna to benefit, by way of a reduction in the amount of the fines that would otherwise be appropriate to impose, from this self-inflicted financial stress.

  1. His Honour was referring (in [181]) to the following remarks made by Stein J in Capdate (at 353, dealing with the law as it then stood):

Mr Lidden submits that in these circumstances any substantial penalties imposed could not be met and the Court ought therefore impose only nominal fines. The prosecutor, Mr Cowan, submits that while the means of a defendant to pay a substantial fine may be relevant, the offences are very serious and the circumstances make it inappropriate to impose nominal fines. He also notes that the Court can allow time to pay under s 54(1) of the Land and Environment Court Act 1979 (NSW) and the enforcement of the fines will be a matter for the Environmental Planning Authority.

I accept that issues such as impecuniosity and means are relevant to the sentencing discretion notwithstanding the absence of a statutory direction such as contained in s 80A of the Justices Act 1902 (NSW): see R v Rahme (1989) 43 A Crim R 81. Whether a person or company's financial circumstances will sound in mitigation of penalty however will very much depend on the particular facts and circumstances. One matter to keep in mind is that failure to pay a fine does not lead to imprisonment in default: see s 53 of the Land and Environment Court Act. ...

So far as the company is concerned all I know is that it is not longer trading. It is difficult to see how its largely indefinite financial circumstances should mitigate the fine to any appreciable extent. It is not in receivership and could possibly trade again. In any event, the means of the company may not have the same impact on third parties as with an individual defendant.

Regarding Mr Phillips, the situation is less clear. It is not as if a substantial fine will deprive him of a home for himself and his family. This has already been disposed of in order to pay the company's debts, according to Mr Phillips. The dearth of real or accurate knowledge of Mr Phillips' financial situation leads me to conclude that his financial circumstances should not play a (sic) overly significant part in mitigation of penalty. Indeed, no financial information was provided by the defendant other than in answer to my questions. Additionally, I am uncertain about the accuracy and reliability of the sketchy information provided by Mr Phillips. ...

Deterrence

  1. Section 3A ([44] above) dictates that sentences must “deter the offender and other persons”.

  2. Clearly those in the waste/recycling industry must be deterred from behaving as these defendants have: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357, at 359 and 367.

  3. Foxman himself is an energetic type, and not yet 60 years of age. He remains active in relevant industry associations, and describes himself as a “contractor”. Although he wants to cultivate the appearance of being in a parlous financial position, when all his liabilities are considered, I am not convinced that he is without means, so his prospects of seeking to return to the waste/recycling industry cannot be discounted.

  4. I have concluded, therefore, that there ought be a significant element of specific, as well as general, deterrence in the penalty package at which I arrive in this case.

Totality, and Double Punishment

  1. In formulating the appropriate penalty package(s) the Court must abide by the “totality” principle, and also avoid “double punishment”.

  2. In respect of applying the “totality” principle in the present circumstance, I have had regard to R v Holder R v Johnston [1983] 3 NSWLR 245, at 260; R v Sgroi (1989) 40 A Crim R 197, at 203, Camilleri, at 704; EPA v Barnes [2006] NSWCCA 246, at [43] – [46], and Environment Protection Authority v Wattke, Environment Protection Authority v Geerdink [2010] NSWLEC 24, at [98].

  3. As noted by Pepper J in Environment Protection Authority v Geoff Robinson Pty Ltd, Environment Protection Authority v Robinson [2011] NSWLEC 14, at [128]:

... care must be taken to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the individual offenders' conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence.

  1. Issues of “double punishment” frequently arise in cases of one-person companies charged along with their dominant mind.

  2. In the present case, the maximum penalty for each of the three offences committed by corporations is four times the maximum penalty for each of the other three committed by the key individual in them ([31] above).

  3. However, BBR is in liquidation, placed there voluntarily by Foxman, and FEDS would, on the rather inadequate evidence before me, appear to have negative realisable assets.

  4. These circumstances result from a restructuring of the Foxman family and business affairs, when confronted by the twin burdens of legal costs in both the civil and criminal matters, and the cost of carrying out Pepper J’s orders, and any I make.

  5. In Leichhardt Council v Geitonia Pty Ltd (No 7) (“Geitonia”) [2015] NSWLEC 79 – a decision unaffected by the recent Court of Criminal Appeal decision in Geitonia Pty Ltd v Inner West Council; Gertos v Inner West Council [2016] NSWCCA 186 – Biscoe J faced a situation which he described thus (at [52]):

... Where an individual offender and the company that he owns are each being sentenced for the same offence, the fines to be imposed should be such as to avoid double punishment of the individual arising from the diminution in the individual’s valuable interest in the company to the extent of the fine imposed on the company.

  1. His Honour noted (in [56]):

In Keir v Sutherland Shire Council [(“Keir”)] [2004] NSWLEC 754, an individual and a company of which he was the sole director and effective mind, were sentenced for committing the same offence of carrying out development other than in accordance with development consent. McClellan CJ of LEC considered that it was appropriate to impose a penalty upon both defendants which was sufficient in the circumstances, but which took account of the fact that it will, in reality, come from the individual’s pocket: at [17]. His Honour fined the individual $25,000 and the company $10,000: at [22].

  1. After a typically learned analysis of all the authorities, including some in which “both the one man company and its man were fined substantial amounts”, his Honour concluded (at [62] and [63]):

62   In all the Australian avoidance of double penalty decisions to which I have referred, both the one man company and its man were fined substantial amounts. It was acknowledged in Greentree [Minister for the Environment and Heritage v Greentree (No 3) (2004) 136 LGERA 89; [2004] FCA 1317] and Kinnarney [The Hills Shire Council v Kinnarney Civil & Earthworks Pty Ltd (No 2) [(“Kinnarney”)] [2012] NSWLEC 95] that the “total” fines imposed on them should be appropriate in the circumstances of the case – a principle analogous to the totality principle. In ABB [Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited (No 2) (2002) 190 ALR 169; [2002] FCA 559], Greentree, Kinnarney and Palfrey [Palfrey v Spiteri; Palfrey v South Penrith Sand & Soil Pty Ltd; Palfrey v Roberts [2014] NSWSC 842] (but not Mouawad [Mouawad v The Hills Shire Council [(“Mouawad”)] (199 LGERA 28); [2013] NSWLEC 165]) heavier fines were imposed on the corporation compared with the individual, taking into account that there were heavier maximum statutory penalties for corporations compared with individuals. In ABB, the ratio between the two (20:1) was reflected precisely in the fines imposed. In Greentree the ratio of the maximum statutory penalties for corporations and for individuals was 10:1 but the ratio of the fines imposed was 2:1, which appears to have been the product of instinctive synthesis. In Mouawad the same fine was imposed on the corporation and the individual. Where there was no difference in the maximum statutory penalties, the individual was fined substantially more than the corporation: Keir. In the present case, there is no difference in the statutory maximum penalty for a corporation and an individual.

63   On one view, a logical way to avoid double penalty in a case such as the present, where the individual is the sole shareholder and alter ego of his company (at least where the maximum statutory penalty for each is the same), is to impose a fine on the individual and only a nominal (or no) fine on his company. That would accord with the result under the United States Guidelines Manual. But none of the Australian authorities to which I have referred have taken (nor have they explicitly considered) that view. The explanation may lie in the proposition that avoidance of a double penalty is to be taken into account with other considerations, and that other considerations such as the sentencing objectives of deterrence, denunciation and punishment still require more than a nominal fine to also be imposed on the one man company. This suggests that although Mr Gertos, as the guiding mind behind the offences committed by Geitonia and indeed GRC, should bear the heaviest fine, Geitonia should also bear a fine that is not nominal.

  1. He then (at [68] – [69]) decided to impose a fine of $150,000 on the “sole shareholder and alter ego of his company”, and lesser, but more than “nominal”, fines ($50,000) on the companies.

  2. In Environment Protection Authority v Alcobell Pty Ltd, Environment Protection Authority v Campbell (“Alcobell”) [2015] NSWLEC 123, Pain J (at [121]) endorsed the approach taken by Biscoe J in Geitonia, but, after having regard to the director’s personal finances, and the company’s “limited financial capacity” ([116]), her Honour imposed fines totalling $70,000 on the Alcobell company, and $17,000 on Campbell.

  3. The outcomes in Geitonia and Alcobell seem a little difficult to reconcile, but I have examined all the authorities Biscoe J examined, and I intend to follow his Honour’s approach to relative penalties, and to accept the Prosecutor’s submission (par 45) that Foxman himself should bear the heaviest fine for the s 143(1) offences, and (par 46) that he and FEDS should incur similar fines for the s 144(1) offences.

  4. Mr Isaacs submitted (par 61) that the Court should have regard to Environment Protection Authority v Wyong Shire Council [2012] NSWLEC 36 and Environment Protection Authority v Smart Skip (NSW)Pty Ltd [2009] NSWLEC 204, two s 144 cases in which larger volumes of waste were involved than the 15,900 tonnes here. Penalties of $62,000 ($20,000 plus $42,000) and $50,000, respectively, were imposed, in addition to costs of $70,000 and $20,000, respectively, and publication orders.

  5. I note that the “harm” in those matters was adjudged to be “low” and “nil” respectively, and that even Mr Isaacs conceded (par 60) that “care must be taken when comparing cases”. In every respect the present case is clearly more serious than either of those.

Conclusion

  1. The major criminality in this case is on the part of Foxman himself. He was deeply, and personally, involved in every aspect of the behaviour proven against the two companies he dominated, as well as himself.

  2. There are some aggravating factors, only late expressions of remorse put in mitigation, and no satisfactory basis for any discount on grounds of financial capacity.

  3. Hence, apart from the need to apply the totality principle, I am not persuaded to move upwards or downwards from the penalties arrived at after the process of “instinctive synthesis”.

  4. The financial penalty to be imposed has to be proportionate to the proven criminality, viewed as a whole, but the major burden should fall on Foxman, as the author and chief manager of the scheme.

  5. There is little utility in imposing heavy penalties on BBR for its part in the two transportation offences, but it should bear some burden despite its subsequent liquidation. Mr English submitted (T13.11.15, p92, LL25 – 46):

Geitonia. ...tempers that thought that there should be some relaxation in the penalty that your Honour would otherwise impose on BBR. Having said that, I would not necessarily say that it would be improper for your Honour to consider imposing a lesser penalty on BBR because of its financial predicament, and it would be, in my respectful submission, if your Honour wanted to do that, that Mr Foxman's fine as director of the company would become heavier. ... If your Honour was to discount the fine applicable to BBR because of its position in liquidation, especially given the circumstances Mr Foxman put it into liquidation at a time when it owed considerable money to the tax department, your Honour would have no hesitation in readjusting the fine that would otherwise [sic] applicable to Mr Foxman, so he ... bears a heavier burden, whereas BBR might receive something less.

and, later (p93, LL44 – 50):

... if your Honour were to adjust the penalty to be imposed on BBR as a consequence of its financial position in liquidation, then in order to ensure that the full penalty that was imposed was proportionate to the offence, your Honour would need, in my respectful submission, to increase Mr Foxman's penalty to ensure that there is still one whole penalty that reflects the objective seriousness and the subjective considerations of the offenders.

  1. FEDS should be fined $100,000 for its waste facility offence; BBR $20,000 and $30,000 for its transportation offences, reduced to $15,000 and $25,000, under the totality principle ([103] – [105] above); and Foxman himself $100,000 for each of his three s 169 offences, subject to the reduction of the fine for each BBR transportation offence to $75,000, under the totality principle ([103] – [105] above).

  2. Orders for costs and investigation expenses, and the publication and remediation orders, as sought by the Prosecutor, should also be made.

  3. I have taken the burden of those orders into account in settling the amounts of the fines: Environment Protection Authority v Barnes [2006] NSWLEC 2, at [52] – [53], reviewed in EPA v Barnes [2006] NSWCCA 246, at [62] – [72] and [88] – [89].

  4. The Prosecutor should ensure that Wollondilly Shire Council, and BBR’s liquidator are informed of the outcome of this case.

Orders

  1. Having already found all three defendants guilty of the offences with which they were charged, I now make the following orders:

In Matter 2016/158950 (formerly 51244 of 2011)

  1. The defendant Foxman Environmental Development Services Pty Ltd is convicted of the offence that, as the owner of the land comprised in Lot 733 DP 811421 at or near The Oaks, NSW, and known as “Foxman’s Valley” (hereafter “the land”), it used that land as a waste facility without lawful authority, in contravention of s 144(1) of the Protection of the Environment Operations Act 1997 (hereafter the “POEO Act”), from about 1 May 2009 to about 30 September 2013.

  2. The defendant is fined $100,000.

In Matter 2016/159008 (formerly 51251 of 2011)

  1. The defendant Botany Building Recyclers Pty Ltd is convicted of the offence that it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act, between about 1 May 2009 to 30 September 2009 inclusive.

  2. The defendant is fined $15,000.

In Matter 2016/159009 (formerly 51252 of 2011)

  1. The defendant Botany Building Recyclers Pty Ltd is convicted of the offence that it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act, between about 12 January 2010 to 22 April 2010 inclusive.

  2. The defendant is fined $25,000.

In Matters 2016/159126 (formerly 51249 of 2011), 2016/159127 (formerly 51253 of 2011), and 2016/159128 (formerly 51254 of 2011)

  1. By reason of s 169(1) of the POEO Act, the defendant Phillip Foxman, contractor, now of 298 Cobbity Road, Cobbity, NSW, is convicted of the following three offences:

  1. that, between about 1 May 2009 to about 30 September 2013, he committed an offence in contravention of s 144(1) of the POEO Act;

  2. that, between 1 May 2009 to 30 September 2009 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act;

  3. that, between 12 January 2010 to 22 April 2010 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act.

  1. The defendant Foxman is fined for the three offences in par (7) above, respectively:

  1. $100,000

  2. $75,000

  3. $75,000

In Matters 2016/158950 (formerly 51244 of 2011), 2016/159008 (formerly 51251 of 2011), 2016/159009 (formerly 51252 of 2011), 2016/159126 (formerly 51249 of 2011), 2016/159127 (formerly 51253 of 2011), and 2016/159128 (formerly 51254 of 2011)

  1. Pursuant to s 257B of the Criminal Procedure Act 1986, the three defendants are ordered, jointly and severally, to pay the Prosecutor’s legal costs, as agreed or assessed.

  2. Pursuant to s 248(1) of the POEO Act, the three defendants are ordered, jointly and severally, to pay to the Prosecutor an amount of $4,646, being the costs and expenses it reasonably incurred for laboratory analysis of samples during its investigation of these offences.

  3. Pursuant to s. 250(1) (a) of the POEO Act, the Offenders:

  1. At their expense, within 28 days of the date of this Order, must cause a notice, in the form of “ANNEXURE A” to these orders, to be placed within the first 5 pages of the following publications at a minimum size of 10 cm x 18 cm:

  1. The Sydney Morning Herald;

  2. Inside Waste Magazine.

  1. Within 35 days of the date of this Order, the Offenders must provide to the Prosecutor a complete copy of the page of the publications in which the notice appears.

  1. Within 90 days of the date of this order, the Offenders, Foxman Environmental Development Services Pty Ltd and Phillip Foxman, must remove, or procure the removal of, the fill material from the land as identified in the Lean & Hayward survey dated 26 May 2010, being “ANNEXURE B" to these orders, and dispose of the waste at a waste facility or facilities licensed under the POEO Act to accept such waste.

  2. Within 118 days of the date of this order, the Prosecutor's expert shall file an affidavit with the Court setting out the Offenders’ compliance or otherwise with order (12) above.

  3. Within 90 days of the date of these orders, Foxman Environmental Development Services Pty Ltd and / or Phillip Foxman are to provide receipts to the Prosecutor evidencing the lawful disposal of the waste the subject of the proceedings at a facility or facilities licensed under the POEO Act to accept such waste.

  4. Exhibits are returned, other than Exhibit P3.

**********

ANNEXURE A (10.1 KB, pdf)

ANNEXURE B (27.7 KB, pdf) ANNEXURE B (27.7 KB, pdf)

Amendments

16 September 2016 - Typographical error in paragraph [127](8)(a) "$100,000" replaces "$100,00"

Decision last updated: 16 September 2016

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