Environment Protection Authority v Goulburn Wool Scour Pty Limited

[2003] NSWLEC 200

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Land and Environment Court

of New South Wales

CITATION:

Environment Protection Authority v Goulburn Wool Scour Pty Limited [2003] NSWLEC 200

PARTIES:

PROSECUTOR
Environment Protection Authority

DEFENDANT
Goulburn Wool Scour Pty Limited

FILE NUMBER(S):

50003 of 2003

CORAM:

Talbot J

KEY ISSUES:

Prosecution :- defence that alleged pollution of water authorised by environmental protection licence - honest and reasonable mistake of fact can include a mistaken belief as to effect of licence condition - officially induced error of law raised

LEGISLATION CITED:

Protection of the Environment Operations Act 1997 s 120(1), s 122

CASES CITED:

Collector of Customs v Agfa-Gevaert Limited (1995 - 1996) 186 CLR 389;
Griffin and Another v Marsh (1994) 34 NSWLR 104;
Iannella v French (1967-1968) 119 CLR 84;
Palmer v Ostrowski [2002] WASC 39, unreported;
Power v Huffa (1976) 14 SASR 337;
Thomas v The King (1937) 59 CLR 279;
Von Lieven v Stewart; Kemish v Godfrey and Another (1990) 21 NSWLR 52;
Zarb v Kennedy (1968) 121 CLR 203

DATES OF HEARING:

18/08/2003, 19/08/2003, 20/08/2003, 21/08/2003

DATE OF JUDGMENT:

09/09/2003

LEGAL REPRESENTATIVES:

PROSECUTOR
Mr S J Rushton SC
SOLICITORS
Environment Protection Authority

DEFENDANT
Mr C J Leggat (Barrister) with Mr J A Crisp (Barrister) and Mr A Djemal (Barrister)
SOLICITORS
Phillips Fox

JUDGMENT:

IN THE LAND AND

ENVIRONMENT COURT

OF NEW SOUTH WALES

50003 of 2003

Talbot J

9 September 2003

Environment Protection Authority

Prosecutor
v

Goulburn Wool Scour Pty Limited

Defendant

Judgment

Introduction

1 The defendant company, Goulburn Wool Scour Pty Limited (“GWS”), operates a wool scouring facility at Mazamet Road, Goulburn. The Court understands that the process of wool scouring is the initial stage of upgrading or “value adding” to the primary product by washing the raw wool to remove dirt, grease and other residual impurities. Wastewater generated from the process has elevated levels of nutrients and salts. GWS also operates a waste water disposal facility at Yarra, which includes the irrigation farm known as the “Yarra Irrigation Area”. It is this irrigation farm which gives rise to the current charge. Waste water from the Goulburn wool scouring facility is irrigated onto the Yarra Irrigation Area via a spray irrigation system.

The Charge

2 The defendant is charged that on 5 February 2002 it committed an offence against s 120(1) of the Protection of the Environment Operations Act 1997 (“the PEO Act”) in that it polluted waters known as Kangaroo Ponds and downstream thereof. The pollutants were generated by run-off from the Yarra Irrigation Area during a storm event.

3 The defendant has pleaded not guilty.

The Defence

4 There is no real dispute that the defendant polluted waters on 5 February 2002. The defendant nevertheless submits that the charge should be dismissed on the following two alternative grounds:-

(1) The defendant was appropriately licensed; and

(2) In the alternative, the defendant made an honest and reasonable mistake of fact, namely that its existing and operating first flush system was the subject of a licence application considered and approved by the Environment Protection Authority (“the EPA”).

5 In addition to the above defences Mr Leggat foreshadowed a further potential ground of defence raised in a recent case in Western Australia, namely officially induced error of law.

The Prosecution Evidence

6 Paul Wearne is a Senior Programs Officer employed by the prosecutor. Over the last 10 years he has visited the GWS premises on a number of occasions as part of his duties in the administrative and operational perspective of licensing and regulation of the defendant’s premises. He is aware that during the scouring process wastewater is produced and that the defendant’s spray irrigates the wastewater onto two parcels of land, namely the Yarra Irrigation Area and the area closely located to the plant referred to as the Goulburn Irrigation Area. His evidence consists of reporting on the result of reviewing the files held by the prosecutor that relate to the defendant. These documents include the following:-

(1) Pollution Control Licence (“PCL”) for the Yarra Irrigation Area from 1 January 1993 to 1 January 1994;

(2) PCL for Yarra Irrigation Area from 1 January 1997 to 1 January 1998;

(3) PCL for Yarra Irrigation Area from 1 January 1998 to 1 January 1999;

(4) PCL for Yarra Irrigation Area from 1 January 1999 to 1 January 2000;

(5) Environment Protection Licence (“EPL”) from 15 February 2000 to 4 February 2001 (“the 2000 EPL”);

(6) EPL from 5 February 2001 to 19 April 2001 (“the combined EPL”); and

(7) EPL from 20 April 2001 to 11 August 2002 (“the amended EPL”).

7 The 1993 to 1994 PCL contained conditions of control in respect of discharge from the irrigation area to waters except following storm events of a one in 10 year 72-hour duration. There were various controls including prohibition on the discharge of effluent to any watercourse or to any area other than the defined irrigation area and a requirement for stormwater to be diverted from the irrigation area. The 1997 to 1998 PCL had similar conditions, including condition W8 which provided there shall be no discharge from the irrigation area to “waters” except following storm events of a one in 10 year 72-hour duration. On 1 January 1998 the licence was amended by deleting condition W8.

8 The 2000 EPL was issued to the defendant pursuant to the PEO Act on 15 February 2000. The EPA advised the defendant that the 2000 EPL did not change the environmental performance requirements of GWS even though many of the operational conditions were framed using different terminology. Prior to February 2001 the defendant held two EPL’s. A separate EPL was issued for the Yarra Irrigation Area and another for the Goulburn Irrigation Area. During 2000 the prosecutor determined that it would be more practicable to incorporate both licences into one and as a result on 5 February 2001 the combined EPL was issued for the period 5 February 2001 to 19 April 2001. A Notice of Variation was issued on 20 April 2001 and the amended EPL was in force from 20 April 2001 to 11 August 2002. The amended EPL was in force at the date of the incident which gives rise to the present charge.

9 Conditions P1.2 and P1.3 of the amended EPL are relied upon by the prosecutor and are set out as follows:-

P1.2 The following points referred to in the table are identified in this licence for the purposes of the monitoring and/or the setting of limits for discharges of pollutants to water from the point.

P1.3 The following utilisation areas referred to in the table below are identified in this licence for the purposes of the monitoring and/or the setting of limits for any application of solids or liquids to the utilisation area.
Water and land

EPA identi- fication no.	Type of monitoring point	Type of discharge point	Description of location
1	Volumetric discharge limit point	Spray irrigation onto the property in Portions 181, 184, 325, Parish Goulburn
2	Volumetric discharge limit	Spray irrigation onto the lands behind the wool scour
3	Environmental Monitoring	Mulwaree Ponds
4	Soil Monitoring	Within the irrigation area at Yarra
5	Soil Monitoring	Within the irrigation area behind the scour

10 Condition L1.1 provides as follows:-

L1.1 Except as may be expressly provided in any other condition of this licence, the licensee must comply with section 120 of the Protection of the Environment Operations Act 1997.

11 There is a control on effluent applications in condition O3.1 as follows:-

O3.1 Effluent application must not occur in a manner which causes surface runoff to receiving waterways.

12 A requirement for the diversion of stormwater run-off from the irrigation areas is contained in condition O3.5 as follows:-

O3.5 Stormwater runoff must be diverted from the irrigation areas.

13 The Regional Operations Officer employed by the prosecutor in Wollongong, Amiette Wakenshaw (formerly Kennedy) explains her understanding of the way effluent is treated and irrigated on two farms as a result of the wool scouring process carried on by the defendant. She says the wool scouring process involves de-dusting and hot detergent washes and rinses to remove dust, wool grease, suint (dried residue from sheep perspiration) and organic matter (skin, seed, twigs, burrs) from the raw wool.

14 She describes the Yarra Irrigation Area as divided into three geographic sections known as section 1, section 2 and section 3. For each section there is a run-off collection dam (“RCD”). The RCD in section 3 (“RCD3”) holds treated effluent pumped from a wastewater treatment plant as well as some run-off from section 3 itself. Treated effluent is drawn from RCD3 for the purpose of irrigating the three different catchments. The RCD in section 1 (“RCD1”) and the RCD in section 2 (“RCD2”) do not hold treated effluent. They do, however, hold contaminated stormwater run-off from the irrigation areas. The irrigation farm at Yarra comprises 26.7 hectares. In 2001 the defendant added a first flush dam (“FFD”) below each of the RCDs.

15 There is a second irrigation farm known as the “Goulburn Irrigation Area” comprising 13 hectares adjacent to the wool scour plant.

16 On 4 February 2002 Miss Wakenshaw became aware from information received from others that the FFDs at the defendant’s property were full. She arranged to visit Goulburn the following day, namely 5 February 2002 at 10:00am with two colleagues, one of whom was a representative of the Sydney Catchment Authority (“SCA”), Amelia Stein. She met with the General Manager of the defendant, Howard Kneebone, and the company’s Environment Officer, Tom Parker.

17 After a discussion in the office the parties inspected section 1 and section 2 of the Yarra Irrigation Area. She observed that a large amount of water was flowing out of the FFD in section 1 (“FFD1”) and off the site, across the boundary between the defendant’s land and the property of the neighbour, Andrew Angus Gibson. She says the water looked like sheet flow which then headed into numerous channels. She was unable to estimate the flow of the run-off water leaving the site but she observed that “it was flowing very fast”. The water was brown in colour, slightly cloudy and it was foamy.

18 She also observed that water bypassed RCD2 and was flowing into the FFD in section 2 (“FFD2”). FFD2 was full and as a result the water flowed around the dam wall. The water that bypassed FFD2 flowed through the boundary fence and into Mr Gibson’s property. The water was dark brown and foamy. It was not as cloudy as the water running below FFD1.

19 Samples were taken.

20 Miss Wakenshaw observed that water was flowing along a diversion drain that bypasses RCD3 over a spillway towards the FFD in section 3 (“FFD3”). The water in the diversion bank was described by her as “dark brown in colour and there was very little foam on top of the water”. RCD3 appeared to be, she says, at about 60 per cent capacity. Miss Wakenshaw confirms her understanding that RCD3 stored treated effluent piped from the wool scour plant, together with some run-off from the irrigation area in section 3.

21 Miss Wakenshaw also observed that water diverted by a contour bank, near the southern boundary of the irrigation area with an adjoining property, was clear. The water flowing around the contour bank was run-off water and dam bypass water from the neighbouring properties. The water flowing from the adjoining property joined the run-off water from irrigation area section 3 at a point where the water from section 3 was dark brown in colour and there was a small amount of foam. Downstream of the confluence referred to the water was dark brown in colour and very foamy with a very high flow rate. Miss Wakenshaw observed foam on top of the water as it flowed east into Mr Gibson’s property.

22 At points below the confluence, namely the flow from FFD3 combined with the flows from FFD1 and FFD2, she says the water was still flowing very quickly, was dark brown and foamy. The water was flowing towards Kangaroo Ponds downstream. She observed that the irrigation area discharge run-off flowed into Kangaroo Ponds. At that point she observed that the irrigation area run-off was foamy and joined into a clear stream run-off from the neighbouring property. As a result of the mixing of irrigation area run-off and the clean farm run-off at the confluence the colour of the combined water downstream was quite dark and slightly foamy.

23 Miss Wakenshaw says that Mr Kneebone observed during conversation that water in a tributary of the Mulwaree River downstream of where the wool scour run-off flows into it was darker than the water upstream.

24 Miss Wakenshaw inspected an area of the Yarra property where a water evaporation trial was being undertaken. She understands the trial involves evaporating the raw effluent in large plastic tubes. She observed that terraces had been ploughed across the hill. On each of the terraces plastic evaporation tubes, about 50 metres in length and approximately 2 metres wide, had been laid. She also observed that there was no vegetation or any erosion or sediment controls around the terraces or the evaporation tubes. She noticed that one of the evaporation tubes was leaking with concentrated effluent discharging through a hole in the plastic. The effluent was grey in colour and flowed in a southerly direction into the diversion bank that directs water to FFD1. FFD1 was full and the effluent was bypassing FFD1 and flowing off the site.

25 On a further inspection on 8 February 2002 with Mr Parker and another officer Moreno Julli, Miss Wakenshaw observed that water was not discharging from the site. However, water was pooled in the diversion banks around RCD1 and FFD1. There were a number of pools of dark brown water in Mr Gibson’s property in the same location that she had observed irrigation area effluent flowing on 5 February 2002. There was no discharge of irrigation area effluent at FFD2 on 8 February 2002 but there were pools of water in the Gibson property where she had seen it on 5 February 2002. She did not see irrigation area effluent bypassing FFD3 on 8 February 2002 but downstream of FFD3 at the south western boundary of the irrigation area with Mr Gibson’s property she observed a small volume of dark brown water flowing into a pool located on the fence line of the boundary.

26 Samples were taken downstream. She observed that the water level in RCD2 was higher than that which she observed on 5 February 2002. Mr Parker confirmed to her that the increased level was because the company was pumping from FFD2 causing the level to increase by about “a foot”. Mr Parker explained that RCD1, RCD2 and RCD3 did not fill on 5 February 2002 because the diversion banks were built with a six-inch pipe. During heavy rainfall events the six-inch pipe does not have sufficient capacity to take the whole of the flow so that it is diverted into the FFDs. The FFDs were built in February 2001 after an earlier rain incident at that time.

27 On 10 September 2002 Miss Wakenshaw, with Peter Jamieson of the EPA, conducted a recorded interview with Mr Kneebone and on 11 September 2002 they conducted a recorded interview with Mr Parker in relation to the events of 5 February 2002.

28 Miss Wakenshaw told Mr Leggat in cross-examination that she had not previously observed foam in fresh water run-off after a storm event.

29 Miss Wakenshaw rejected a suggestion by Mr Leggat that when she first visited the site in 1999 she was informed that the defendant’s irrigation area was designed to capture the first 10mm of rain runoff and that thereafter there would be discharge from the site. Neither was she aware during that first visit that a valve was installed in the pipeline as part of the irrigation system at the Goulburn site so that stormwater could be diverted in the direction of the Mulwaree River after the system had collected the first 10mm of rain.

30 She did not observe any valve in position when she first inspected the property with Mr Kneebone in 1999. It was not a close inspection on that occasion but was undertaken with EPA Officer, Trevor Jones, who had EPA responsibility for the defendant’s premises up to that time. She was taking over. On that first inspection, she says, there was nothing to alert her to the fact that she was inspecting a first flush system. No one made her aware that the Yarra Irrigation Area was designed to take the first 23mm of rainfall or that the Goulburn Irrigation Area was designed to the take the first 10mm.

31 She agreed nevertheless that a first flush system is one acceptable to the EPA and Sydney Water so that the first volume of run-off, sometimes 10mm, which contained the most pollution, is captured. She agreed that in the event of rain the effluent sitting on the paddocks following irrigation would be mobilised and transported to a different part of the site.

32 Miss Wakenshaw recalls an earlier event on 5 February 2001 when a significant rainfall event led to a discharge of stormwater from the site. She did not inspect the property at that time. Nevertheless she was aware at that time the system at Yarra was operating in such a way as to divert stormwater run-off from the site. Her understanding is that after the events on 5 February 2001 additional dams were installed with the object of increasing the volume of storm water captured. Otherwise, the characteristics of the first flush system at Yarra were not modified after 5 February 2001. The EPA did not prosecute the defendant for an offence in connection with the incident that occurred on 5 February 2001.

33 She agrees that no dam wall was breached on 5 February 2002.

34 Miss Wakenshaw agreed in cross-examination that there had been a number of changes to the conditions of the licence since she became responsible for managing the defendant’s property on behalf of the EPA in 1999. However, none of these changes required the defendant to change the design of the irrigation area either by moving or varying the position of contour banks or the capacity of the pipeline. She confirmed that two diagrams tendered respectively depicting the physical arrangement in place on 5 February 2002 and recording what is constructed on the site at Yarra in relation to the mechanics of the stormwater bypass spilling and other features of the design are correct. She also agreed to the proposition put to her by Mr Leggat that after a certain quantity of stormwater has been captured the design operates to release stormwater from the site.

35 Other than the condition of the licence, which she says prohibits discharge off the site, Miss Wakenshaw is not aware of the breach of any other licence condition on 5 February 2002.

36 William John Canning Dove is an Environment Protection Officer employed by the prosecutor. He first inspected the premises of the defendant in the course of his duties in about 1993/1994. He visited the site with Miss Wakenshaw on 5 February 2002. It was raining when they arrived at the defendant’s premises in Goulburn at approximately 10:00am. He accompanied Miss Wakenshaw, Mr Kneebone, Mr Parker and Miss Stein on the inspection of the Yarra Irrigation Area. Mr Kneebone told him that there had been 100mm of rain. Mr Parker said he first noticed FFD3 “by-passing at 8 am” on 5 February 2002. Mr Parker informed him that FFD1 “probably started by-passing at 6 pm” on 4 February 2002. He says Mr Kneebone told him that if there is greater than 15mm of rain surface run-off will bypass the eight-inch pipes that flow into RCD1. Furthermore, according to Mr Dove, Mr Kneebone explained that there was a 400 mm head from the spillway back to the eight-inch pipe that flows into RCD1. Mr Dove observed that effluent was flowing in the contour drain spillway at FFD1, which was overflowing onto the neighbouring property. He noticed that the water level in RCD2 was very low. Liquid was flowing into RCD2. He also noticed that a significant flow was bypassing RCD2 and flowing over the spillway between RCD2 and FFD2 and then flowing to FFD2, which was overflowing. That water was dark brown in colour and turbid. He estimated the volume of the flow bypassing RCD2 was greater than the volume of liquid flowing into RCD2. Mr Dove corroborates the observations made by Miss Wakenshaw at various sites and the taking of samples. He took a number of photos. He also observed that run-off effluent was bypassing RCD3 and flowing into FFD3 which was full and overflowing. There was considerable water run-off flowing from a neighbouring property. The run-off flowing from the neighbouring property was clear and did not contain any sediment. The contour bank identified by Miss Wakenshaw diverted it.

37 Mr Dove also noted that one of the “evaporation sausages” in the wastewater evaporation trial area was leaking with concentrated effluent discharging through a gash. The effluent was grey in colour and flowing from the constructed pad that the evaporation sausage sat on, downslope to a cut-off bank that was running full with effluent run-off from the adjacent irrigation area. The undiluted effluent from the evaporation sausage entered the cut-off drain. Mr Kneebone said “I will get someone to fix that immediately”.

38 Mr Dove was not aware until 5 February 2002 that the defendant’s system of irrigation at Yarra had a design feature that permitted the discharge of run-off after 15mm of rain. He was not aware that the Goulburn Irrigation Area allowed for discharge when rainfall exceeded 10mm.

39 Moreno Julli is the Research and Testing Services Manager for the EPA at the Centre for Ecotoxicology. Mr Julli inspected the defendant’s property on 8 February 2002 in the company of Miss Wakenshaw and Mr Parker. He noted a small amount of drainage flow along the edge of RCD1. The liquid was a dark red brown colour. There were pools and a small amount of flow in what he described as “a creek line” below FFD1.

40 There was no water flowing from FFD2. He followed a drainage line from FFD2 towards a gully in the adjoining property. Within the gully was a “stream”. There was a trickle flow of water in this stream between the ponded areas. It had the appearance of being ephemeral in nature.

41 He inspected an eroded gully below FFD3 where water had ponded in a “deep erosion pool” along the fence line. There was a small flow of water into the erosion pool which appeared to him to be seepage from an area below FFD3. He could hear frogs croaking at this location. He measured the dissolved oxygen and ph of the water.

42 He noted the presence of frogs and a number of frog egg masses in a ponded area of a small creek downstream of the eroded gully area below FFD3. He walked upstream from the ponded area for approximately 150 metres to the confluence of two small streams. Mr Parker described one stream as originating from section 3 of the irrigation area while the other stream, he said, drains from section 1 and section 2. There was a trickle flow of water in “the stream” originating from section 3. However, no flow was evident in “the stream” draining from section 1 and section 2. He walked to Kangaroo Ponds. He observed “the stream” draining from the irrigation area was flowing at approximately one litre per second. The water was a dark brown tannin colour. He measured the ph and conductivity of the water. He estimated the flow of the unaffected stream upstream of the confluence to be approximately five litres per second. He observed a small mosquitofish in the unaffected stream. In his opinion, the presence of the fish indicates that the watercourse is reasonably permanent. He observed reddish brown water in “the stream” draining from the irrigation area.

43 Mr Julli says he had a conversation with Mr Parker that left him with the understanding that dams 4 and 5 are not used for storage of any run-off water and that they are used for emergency storage and therefore kept empty.

44 Photographs and samples were taken by Mr Julli. He had not dealt with a wool scour operation previously. He uses the words stream or creek interchangeably throughout his evidence although in environmental scientific terms he acknowledges the flows would be described as ephemeral. He adopts the approach that if there were flows then he classifies it as a stream or creek, providing habitat for aquatic animals such as frogs.

45 He could not agree that the descriptions given by Mr Parker in his evidence that the water bodies that he described as creeks and streams are ephemeral stormwater flow paths. His observations were that there was water flowing in gully areas and that there were fish swimming in streams that Mr Parker described as stormwater flow paths. He agreed in cross-examination that the erosion pool he referred to could be described as a deep erosion hole with water in it rather than a deep erosion pool. The presence of mosquitofish indicate that the water existed in that area for a reasonable time. Accordingly, he would expect that water was present beforehand and had existed there for some time. He formed the impression that Kangaroo Ponds was reasonably permanent. He does not accept the likelihood expressed by Mr Parker that the fish could have migrated from elsewhere. He assumes Mr Parker was suggesting that the fish had swum upstream. He considers that to be unlikely.

46 Mr Julli summarises the results of the chemical and ecotoxicity tests undertaken on samples collected on 5 February 2002. Sampling shows that run-off discharge from irrigation area 1 had approximately 16 times the chemical oxygen demand of the background sample, 62 times the conductivity, 108 times the sulphate and 123 times the potassium concentration compared to the background samples. These were also elevated levels of total suspended solids and ph from irrigation area 1. The evidence of the results of sampling is not in contest except to a limited extent by Dr McCracken who raises some doubts about interpretation and the conclusions therefrom.

47 Amelia Joanne Francesca Stein is employed by SCA as a Catchment Officer. She corroborates the evidence of other witnesses in respect of the events which occurred during the inspection on 5 February 2002. On 4 February 2002 she received a telephone call from Mr Parker who advised her that the FFDs at the irrigation area looked close to being full and that they would bypass the FFDs that night. Mr Parker confirmed in the conversation that the dams were empty before the rain.

48 During a further inspection on 6 February 2002 Mr Kneebone advised her that there had been 19mm of rain between the afternoon of 5 February 2002 to lunchtime on 6 February 2002. On that day she observed the run-off effluent bypassing FFD1 at the boundary fence was still discharging from the irrigation area although at a slower rate than the day before. The run-off was dark in colour and was cloudy. It contained sediment but there was no foam. The irrigation effluent run-off was still leaving the Yarra property at the boundary fence below FFD2. This flow was very slow compared to the day before. It was much darker in colour than the run-off below FFD1. There was no foam.

49 At the confluence of the GWS irrigation effluent run-off bypassing FFD3 and the adjacent farm run-off Miss Stein observed that the flow of the clear water from the adjacent farm was slower than the day before. The effluent run-off was dark in colour. She says a small amount of foam was visible and the flow was moderate.

50 She also inspected the combined run-off at the boundary fence. The flow was at a higher rate than the run-off leaving the irrigation area below FFD1 and FFD2 although slower than the day before. It was dark in colour and there was a moderate amount of foam.

51 The effluent run-off bypassing RCD3 flowing through FFD3 and bypassing FFD3 was dark in colour and quite foamy. The flow was less than the day before but still high.

52 On 7 February 2002 Mr Parker informed Ms Stein on the telephone that there was no wool scour run-off water leaving the site. However, the run-off water from the adjacent farm was still running onto the Yarra property, flowing through it and leaving the site boundary. She says she was told no bypass water from FFD3 was joining the flow from the adjacent farm and there was no run-off leaving the property below FFD1 and FFD2.

53 Evidence by Ms Stein seeking to establish that the receiving waters are Class P (Protected Waters) was conditionally admitted. The evidence was subsequently withdrawn when the prosecution did not pursue the point.

The Defendant’s Evidence

54 Mr Kneebone is the General Manager of GWS. His description of the process of disposing wastewater generated by the wool scouring process is consistent with the explanation given by Miss Wakenshaw, to the extent of applying it to two geographically separated spray irrigation areas known as the Goulburn Irrigation Area and the Yarra Irrigation Area.

55 Mr Kneebone explained that the original system at Goulburn was constructed in or about 1982 and comprised two small run-off collection ponds with a design capacity to cope with 10mm of rain from the catchment.

56 After a meeting with State Pollution Control Commission Officer, Maurie Matthews, and representatives of GWS in November 1989 changes were proposed to the Goulburn licence whereby following collection of the initial run-off any further run-off should bypass the collection dams and not flush the collected wastes to waters. He explained this could be achieved by closing the valve on the pipe from the contour bank that collects all run-off from the irrigation field and channels into the run-off collection dam. Mr Kneebone was satisfied with the approach recommended by Mr Matthews as it was consistent with the design of the system, namely that there would be a capture of the first flush of 10mm of rain and then a discharge of stormwater run-off off-site. The Goulburn licence for 1990-1991 was granted on 1 June 1990. This licence included a number of new conditions as follows:-

§ A definition of “dry weather conditions” to mean less than 10 mm of rain falling within a 24 hour period.

§ Condition W2 which provided that “Under dry weather conditions, there shall be no discharge of effluent to any watercourse or to any other area than the defined irrigation area.”

§ Condition W5 which provided that “Stormwater runoff shall be diverted from the irrigation area”.

57 Mr Kneebone says he understood that the practical operation of the system was that there be no discharge from the Goulburn area unless more than 10mm of rain had fallen within 24 hours. That discharge was only to consist of stormwater run-off from within the irrigation areas.

58 In 1991 GWS commissioned Dr John McCracken to prepare a Review of Environmental Factors relating to a proposed expansion of the production area and the use of Yarra. In December 1991 Warren and Associates were instructed to prepare an Environmental Impact Statement (“EIS”) in respect of the proposal to develop Yarra. A copy of the EIS was delivered to the EPA. The EPA responded by advising GWS that it would envisage issuing approval for a second wool scour with conditions attached to the approval relating to the wastewater irrigation area. These conditions would include a condition that there should be no discharge from the irrigation area to waters except following specified rainfall events.

59 Following the determination of the development application made to Mulwaree Shire Council by consent, construction of Yarra commenced in early November 1992 and was completed in or about December 1992.

60 On 27 June 1997, after a major storm event, stormwater flowed off the Yarra site.

61 Between August 1997 and August 1998 two emergency storage dams were designed, approved by the EPA and constructed on the ridge of the Yarra area. Increased storage in respect of RCD1, RCD2 and RCD3 was designed, approved and constructed. In a letter to the prosecutor on 2 October 1997 GWS undertook to construct an increase in freeboard on storage dams to add a significant safety margin. A geotechnical consultant advised that the dams would remain in their safety limits with the increase in storage capacity.

62 In response to an emergency situation that occurred in August 1998 when the RCDs became full at Yarra Mr Kneebone suggested to Mr Wearne that GWS should install the same system at Yarra that was in place at Goulburn, namely to divert stormwater runoff around the RCD, not through them. A proposal to that effect prepared by Dr McCracken was submitted to the EPA on 18 August 1998.

63 The proposal was to construct a stormwater run-off diversion similar to that practiced at the Goulburn site on the basis that most of the contaminants would be expected to have been flushed from the surface of the irrigation sites into the catchment dams so that further stormwater run-off would be suitable for discharge from the site. It was put by Dr McCracken that it can be reasonably argued that the environmental impact from any contaminant that may be flushed from the site in the surface run-off to the receiving waters will be minimal because of the very considerable dilution that occurs from extreme periods of rainfall. Mr Wearne responded to the proposal by telephoning Mr Kneebone with words to the following effect:-

“I authorise GWS to go ahead with the works”.

64 Mr Wearne confirmed in a file note dated 21 August 1998 that he had advised Mr Kneebone to begin constructing an earth contour diversion bank to prevent catchment water entering FFD3 at Yarra to prevent over topping.

65 It is Mr Kneebone’s evidence that the works included the installation of a valve, 150mm inflow pipe and a diversion bank as installed and operating at Goulburn. Mr Kneebone explains that the system was designed so that the design capacity of the inflow to the pipes installed was such as to handle a run-off of greater than 23mm over approximately 24 hours. His observations at the time were that it would take approximately 23mm of rain in a 24-hour period before any stormwater discharged off the site. The construction was completed on 27 August 1998 and the company diverted stormwater run-off off site. From then on the system at Yarra replicated the system in place at Goulburn since 1989.

66 The notes of a site meeting on 24 September 1998 between representatives of the EPA, GWS and the neighbour, Mr Gibson, report that continuing environmental improvement programs include contours being constructed at the Yarra site to divert stormwater run-off. It was agreed at that meeting, inter alia, that early warning of any discharge or possible discharge from the site would be given. It was also agreed that work at the Yarra site progress to achieve a zero discharge.

67 A further major storm event occurred on 5 February 2001. Mr Kneebone observed that during the rain event stormwater run-off was diverting away from the RCDs, after the first flush had been collected therein in accordance with the design adopted in 1998. Mr Kneebone expressly notes that the EPA did not commence any legal proceedings against GWS as a consequence of the diversion of stormwater off-site that occurred following the 5 February 2001 storm event.

68 At a meeting on 31 May 2001 Miss Wakenshaw, Mr Parker and Mr Kneebone reviewed a SCA report recommending that 15mm be collected and returned back to the system. Miss Wakenshaw spoke to Miss Stein about the proposal and advised her that the EPA has “always intended the site to be zero discharge site”. Moreover, that the EPA may not approve a certain design storm as it believes the site to be zero discharge. Mr Kneebone has told the Court that works necessary to guarantee the first flush system at Yarra would collect a minimum of 15mm of stormwater run-off were completed by July 2001. Small contours were installed in front of the stock water dam directly below RCD3 and RCD2 to improve the environmental performance of the system by ensuring that at least 15mm of water was collected, retained and then returned back to the site. After that work was carried out there was, according to Mr Kneebone, a capacity to hold 70mm of a rain event on the site, an increase from 23mm before the work was completed.

69 In his affidavit Mr Kneebone says that when the rainfall events commenced on or about 3 February 2002 it took about 70mm of rain before discharge of stormwater from the site took place. He further says that the stormwater that was being discharged was after collecting about the first 70mm in the run-off collection dams, the FFDs and the irrigation fields. In his opinion, the discharge that occurred on or about 5 February 2002 occurred strictly in accordance with the design of the system. In his view, the manner of the discharge was “100% predictable”. It is his contention that the EPA licence operating on 5 February 2002 was a licence granted in respect of a system that was in place and had been designed in collaboration with the EPA.

70 Mr Kneebone relies upon the fact that during the period from 18 August 1998 until 5 February 2002 the company had made known to the EPA the inevitability of stormwater discharge occurring off site as a consequence of the operation of the irrigation system. A close reading of the letter from the company to the EPA dated 18 August 1998 and the proposal by Dr McCracken of the same date shows that this was certainly the case at that date. Even the expectation expressed by Miss Wakenshaw in her note of the meeting on 31 May 2001 recognises this prospect as against the intention for the site to be a zero discharge site.

71 On 18 June 2001 the EPA wrote to the company in relation to a difference of opinion as to the interpretation of condition O3.5. In the letter GWS was advised that “To ensure the condition is clearly understood, the EPA proposes to issue a Section 58 Notice rewording the condition so that it reads “Stormwater runoff from areas other than the utilisation areas must be prevented from flowing onto the utilisation areas””. No action was taken to re-word condition O3.5 in the manner proposed in the letter dated 18 June 2001. Mr Kneebone makes the point that notwithstanding the knowledge that discharge from the site was contemplated the EPA neither varied, suspended nor revoked the licence so as to avoid what Mr Kneebone describes as the “inevitable discharge”. Furthermore, the principle of the irrigation system was at all times that it would inevitably discharge stormwater in certain circumstances. This principle, according to Mr Kneebone, has been inherent in the Yarra area system since 1992 and in the Goulburn system since 1982.

72 As the person responsible for ensuring GWS complies with the conditions, Mr Kneebone sets out in considerable detail the manner in which the company has carried out its activities at the irrigation site relevant to the conditions of the licence. The EPA has not sought to challenge the accuracy of Mr Kneebone’s account in this respect.

73 In cross-examination, Mr Kneebone admitted the fact that on 5 February 2002 stormwater run-off from the company’s irrigation area left the site and it contained the signature of the company’s wool scour, including suspended solids, ph and potassium and that it reached Kangaroo Ponds. He could only point to condition O3.5 to justify the discharge as well as the requirement not to cause environmental harm. In his opinion, and to his knowledge, GWS has never caused any environmental harm. Nevertheless, notwithstanding the deletion of condition W8 he understood the first flush design should be observed as an operating condition of the system as it was installed. Effluent has never been discharged to any watercourse and RCD3, which is the main storage facility for storing high strength effluent, has never overflowed.

74 Mr Kneebone does not agree that the response to the circumstances that arose in August 1998 was merely a response to an emergency situation but rather, although the system was in trouble, indeed wildly out of control, the response was intended to be a permanent management tool to make the area work more effectively.

75 Notwithstanding evidence of Mr Wearne to the contrary, Mr Kneebone claims condition W8 was deleted from the licence without reference to him. Although the removal of condition W8 in 1998 meant that the only condition expressly in terms authorising discharge from the site, and then only in specific circumstances of a one in 10 year event of 72-hour duration, was taken out of the licence, Mr Kneebone maintains the view that the situations at Yarra and Goulburn were identical operations carried out in accordance with the instruction given by Mr Matthews in November 1989, namely that the system should be operated in accordance with its design to collect the nominated first flush of 10mm of rainfall run-off from the irrigation areas in the RCDs and direct any additional water away from the RCDs to Mulwaree ponds.

76 He said to Mr Rushton SC, who appears on behalf of the prosecutor, that he has held the belief that condition O3.5 permitted the company to divert stormwater from within the irrigation area off the site since November 1989. After GWS submitted the proposal by Dr McCracken to convert Yarra to a first flush system in August 1998 Mr Kneebone was of the view that GWS was to operate at Yarra in a similar manner to Goulburn so that it can only be stormwater that is discharged from within the irrigation area, provided it did not cause environmental harm.

77 The 10mm requirement no longer appears as a condition of the licence but nevertheless Mr Kneebone claims it remains as an operating condition for the system. His understanding of the reason for deleting condition W8 is that it was done to avoid confusion with the provisions of condition W5. Thereafter he believes condition W5 permitted discharge of stormwater from within the irrigation area without limitation, except in respect of harm to the environment.

78 Mr Kneebone draws a distinction between the express provision of discharge points for raw effluent by field irrigation referred to in condition P1.3 and condition 03.5 providing for stormwater to be diverted.

79 The evidence of Mr Parker consists primarily of a challenge to the evidence of Mr Julli and the conclusions that he reaches firstly, about the level of pollution and secondly, the alternative wastewater treatment options available to the defendant. By his own admission in respect of the former matters Mr Julli is eminently more qualified than Mr Parker as an ecotoxicologist. Mr Parker nevertheless maintains that from his own experience and knowledge, global best practice for managing or disposing of wool scouring wastewater includes discharging partially treated wastewater directly to sewers or, if a sewer is unavailable, directly to waters.

80 Dr McCracken agrees that contaminated stormwater left the site on 5 February 2002. However, he says, there was not sufficient background data available from sampling to be sure that the stormwater run-off from the site was likely to affect the waters in Kangaroo Ponds. He says the loadings of some contaminants in run-off from the site could have been greater than the loadings in stormwater run-off from other areas, but not necessarily. He agrees that the background readings off-site show less contamination on a concentration basis but not necessarily on a contaminant-loading basis.

81 None of the relevant facts in respect of the alleged incident on 5 February 2002 are in serious dispute.

The Primary Defence

82 The defendant’s primary defence is put on the ground that GWS was appropriately licensed at the relevant time.

83 The evidence confirms that the system operating at Yarra was a first flush system at the date of the alleged offence on 5 February 2002. The evidence of Mr Kneebone is that the system collected a first flush of 70mm before any stormwater left the site. There is no evidence that persuades the Court to the contrary.

84 The purpose of a first flush design is as described earlier at [14], [56], [63] and [65].

85 The first flush components of the system installed at Yarra between 1998 and 2002 replicated the system at Goulburn that had been licensed by the EPA and its predecessor since November 1989.

86 Condition A4.1 of the EPL current at 5 February 2002 provides as follows:-

A4.1 Works and activities must be carried out in accordance with the proposal contained in the licence application, except as expressly provided by a condition of this licence.


In this condition the reference to “the licence application” includes a reference to:

(a) the applications for any licences (including former pollution control approvals) which this licence replaces under the Protection of the Environment Operations (Savings and Transitional) Regulation 1998 and

(b) the licence information form provided by the licensee to the EPA to assist the EPA in connection with the issuing of this licence.

87 The last application made by GWS was in the form of a Licence Information Form dated 10 December 1999 over the signature of Mr Kneebone. This document is the first application made for an EPL under the PEO Act which came into force from 1 July 1999. According to Mr Leggat, it is the form referred to in condition A4.1(b) of the EPL that was current on 5 February 2002. In s 8 of the form, in answer to the question whether any of the activities on the premises discharge pollutants to air, water or land the “Yes” box contains a tick. At 8.3 there is provision to show the type of waters to which pollutants may be discharged as a result of the activity. This section of the form has been left blank. In 8.4 under the heading “Discharges to land” the table shows two discharge points, one of which is described as being located at Yarra indicating that the maximum volume to be discharged during any 24-hour period is 650kL. The relevant catchment name is identified as “Mulwaree River”. This information is re-iterated in the issued licence in conditions L4.1 and P1.3. The latter condition has been re-produced in full at [9]. Condition L4.1 provides that the volume of liquids applied to the area at Yarra must not exceed the limit of 650KL/day.

88 Mr Leggat contends that condition A4.1 requires the defendant to carry out its activities in accordance with the proposal contained in the licence application, which includes the Licence Information Form, except as otherwise expressly provided in the licence. According to Mr Leggat, there is no other condition in the licence which has the legal or practical effect of requiring the company to modify the system that was in place and operating prior to the Licence Information Form being lodged. He relies on the evidence of Miss Wakenshaw that none of the variations made to the licence since 1999 required the nature of the system to be changed. She agreed with the proposition that none of the EPL variations expressly sought to require the company to change the design of its Yarra Irrigation Area either by removing or varying contour banks or removing or varying the capacity of the pipeline.

89 Mr Rushton submits that condition O3.5 does not expressly authorise the discharge of waters off the site. It is saying no more than stormwater run-off must be diverted from the irrigation area. It does not go further to permit discharge off-site. By contrast, whilever the original condition W8 remained in the EPL there was an express recognition that there could be discharge from the irrigation area to “waters” following storm events of a one in ten year 72-hour duration. The deletion of condition W8 from 1 January 1998 removed that permission. Nevertheless, it is the defendant’s case that the system that was in place on 10 December 1999 was recognised by the EPA, and the defendant, as a system which operated on the basis of catching the first flush of run-off from rainfall and thereafter allowing the run-off to leave the site.

90 Mr Rushton refers back to the EIS prepared by Warren & Associates in June 1992 which expressly stated that the irrigation area will be delineated by the construction of diversion banks to ensure the segregation of rainfall (and run-off) from outside of the irrigation area from that within. Significantly, the author went on to say in the next sentence that these provisions will result in zero surface water discharge from the irrigation site excepting in years of extreme rainfall beyond the design criteria of the run-off control structures. It is his contention that Figure 4.1 in the EIS shows the location of diversion banks consistent with an intention to keep clean stormwater out of the irrigation area. This, he says, explains the intentions of condition O3.5 in the current EPL, which originally appeared as condition W5, to the effect that stormwater run-off must be diverted from the irrigation area in the sense that clean stormwater would be segregated from the contaminated water within that area. The prosecutor construes Figure 4.1 as contemplating that there would be diversion banks to keep rainwater which had fallen on clean areas outside the irrigation areas out of the irrigation areas.

91 On the other hand, Mr Leggat says that under condition O3.5 the defendant was obliged to divert stormwater off those parts of its land that were being irrigated. In his submission there are two ways that the company could comply with that obligation. One is to direct the stormwater into the dam as a method of diverting the stormwater away from the irrigation area. The other is to divert it off-site. Furthermore, according to Mr Leggat, an obligation to divert away from the irrigation areas can only be an obligation consistent with the design of the system.

92 Mr Leggat’s argument is that the approach to condition O3.5 by the EPA is inconsistent with the way the system is designed and constructed. A fact, he says, that was expressly recognised by the author of the EIS when referring to extreme rainfall beyond the design criteria of the run-off control structures.

93 The prosecutor recognises that the contour banks which cause contaminated water to leave the site were not installed until 1998. The Court does not accept that these works were installed to deal with an emergency and were therefore only a temporary measure. There is no evidence that the EPA took any steps to have them removed after the storm events of August 1998 had been dealt with.

94 In the Court’s opinion there is no warrant for construing condition O3.5 in the limited way contended by the prosecutor. It is consistent with the way in which the system is designed to operate for the condition to require the diversion of stormwater run-off originating from off the site and also the diversion of stormwater originating within the irrigation areas. Nevertheless, the condition does not in terms permit the discharge of waters off-site. It is inconceivable that stormwater run-off from the irrigation areas be wholly stored within the irrigation areas when the system is designed only to pick up the first flush of run-off which might be expected to contain the contaminants mobilised from the surface of the irrigation area and thereafter allow the stormwater to be diverted. Equally, it is consistent with the design of the system that external stormwater run-off should not be allowed to enter the irrigation areas and thereby creating the potential to disrupt the effective operation of the first flush system.

95 Although the original condition W8 had been deleted from the EPL prior to the application formally made on 10 December 1999, nevertheless the system operating at the time the Licence Information Form was lodged was a system that was designed only to contain the first flush of stormwater run-off from the irrigation areas.

96 The discharge points identified in condition P1.3 are irrelevant to the present consideration as they relate only to the application of effluent by means of spray irrigation onto the land.

97 Condition O3.5 is within a section of the EPL containing operating conditions under the heading “Effluent Application”. It is perfectly consistent with the defendant’s case that so far as practicable stormwater run-off should be diverted away from irrigation areas and off the irrigation areas with the understanding that the contaminants or polluted material generated by the application of effluent by means of the irrigation system are, in the large part, captured before the stormwater run-off is allowed to leave the irrigation area.

98 The Licence Information Form made no provision for, or commitment to, changes to the system operating at that date. The method of operation was well known to, and understood by, the EPA. It is reasonable to construe the information provided in the Licence Information Form on the basis that the current system operating at the date the form was completed comprised the proposal. The written explanation provided by the EPA to the potential applicant makes it clear that the form was intended to be used in connection with the continuing need for a licence in respect of premises or an initial requirement for a licence. It is stated that the EPA’s Guide to Licensing will help the reader to decide if an EPA licence is still needed under the new laws. There is express provision for the details of current licences to be furnished. The form was completed by the applicant in such a way that it can be readily understood as information provided in respect of an existing system. When the licence issued as from 15 February 2000 no changes were thereby required to the already operating system which the defendant proposed to continue. It was an inherent quality of that system that there would be discharges from the site as there had been in June 1997 and August 1998.

99 The Court is satisfied the evidence shows on the balance of probabilities that the drainage system at Yarra functioned as a first flush system on 5 February 2002 in accordance with the design the subject of the application for licence so that the works and activities on that day were carried out in accordance with the proposal contained in the licence application within the meaning of condition A4.1. All of the works in place on that day functioned in accordance with their design and no breach of a licence condition was detected. The works in place have been progressively approved by EPA officers from time to time either on the initiative of the defendant or in response to suggestions and instructions made either by the EPA itself or the SCA. Although the EPA officers, particularly Miss Wakenshaw, may have had a preference for the site to operate on a zero discharge basis, that status has never been achieved. A fact well known to, recognised and adopted by the EPA at all relevant licence dates and renewals since 1992. Major storm events occurred in June 1997, August 1998 and February 2001. Notwithstanding that the system operated on a first flush basis at those times and there was a discharge off-site, the EPA took no steps either by way of administration or licence change to prevent a reoccurrence of discharge from the site.

100 The fact that the original condition W8 was deleted as from 1 January 1998 really takes the matter no further. The deletion, having regard to the effect of condition A4.1 following the application made on 10 December 1999, effectively did no more than remove the parameters for permissible discharge.

101 The Court finds beyond reasonable doubt that the company did pollute waters on 5 February 2002. However, the Court finds on the balance of probabilities that the defendant has established a defence pursuant to s 122 of the PEO Act that the pollution was regulated by the EPL in force on 5 February 2002 and that the conditions to which that licence was subject relating to the pollution of waters were not contravened. The finding that the defendant has established the defence available to it under s 122 of the PEO Act is on the basis that the defendant did comply with condition O3.5 in that the contour banks and other works effectively diverted stormwater run-off from the irrigation area itself and also diverted stormwater run-off from outside the irrigation area so that the latter did not enter the irrigation areas at Yarra. The Court does not rely upon a construction of condition O3.5 to establish an authorised discharge from the property. Even though Mr Kneebone may have previously thought that condition O3.5 was the relevant source, that authority arises from condition A4.1 for the reasons already outlined.

102 Despite the evidence that the waters discharged by run-off from the site caused pollution of the waters at Kangaroo Ponds and possibly elsewhere there is no evidence that this was as a consequence of the breach of a licence condition. The pollution was regulated by the design of the system expressly adopted by the EPA when it issued the licence to carry out the works and activities at Yarra in accordance with the existing proposal the particulars of which were already known to the EPA but nevertheless confirmed and reiterated in the Licence Information Form dated 10 December 1999.

Honest and Reasonable Mistake of Fact

103 In the alternative, the defendant argues that the company had a reasonable basis for holding the belief that its existing and operating first flush system was the subject of the licence application considered and approved by the EPA. As a consequence of the findings already made and the determination that the defendant has established a defence under s 122 of the PEO Act, it is not strictly necessary to deal with this alternative defence.

104 The mistakes of fact upon which the defendant relies are as follows:-

1. That the existing and operating first flush system was the subject of the licence application considered and approved by the EPA.
2. If GWS catches the first 10mm of rain at Goulburn via a pipe and contour banks then GWS can divert the rest off site and if GWS catches the first 23 mm of rain at Yarra via a pipe and contour banks then GWS can divert the rest off site.
3. If GWS’ systems operate as designed and installed then it can discharge in accordance with the design operating parameters.
4. GWS does not need to retain on site all the rain that falls on the site because that has proven impossible at Goulburn since February 1989 and at Yarra since August 1998. Therefore retain the first flush with pipes and contours and discharge the rest off site so the dams do not overflow.
5. GWS held a licence in respect of its systems and the licence did not expressly provide for the contour banks and pipes to be removed from Goulburn or Yarra so as to prevent the systems from operating as first flush systems.
6. The systems in place collected the polluted stormwater runoff from the irrigation area and discharged stormwater that contained harmless concentration levels of pollutants.
7. The evolution of the system at Yarra was incorporated in the licences.

105 Mr Leggat submits that each of the above mistakes are capable of being characterised as a mistake of fact, even if there was a mistake of law on the way through to reaching the conclusion that amounts to a mistake of fact. The support for this proposition is claimed to come from the concurring judgments of Latham CJ, Rich and Dixon JJ in Thomas v The King (1937) 59 CLR 279. At 306 Dixon J said “a mistake as to the existence of a compound event consisting of law and fact is in general one of fact and not a mistake of law”. Latham CJ at p 286 regarded a belief that a decree absolute had not been made by the Supreme Court of Victoria was a belief not as to a matter of law but as to a matter of fact. Whether or not such a decree had been made was a question of fact. Rich J agreed with the judgment of Dixon J.

106 The inclination of Barwick CJ in Iannella v French (1967-1968) 119 CLR 84 at 97 was that it was a mistake as to a matter of fact for a person to hold an erroneous belief that rent control in South Australia had come to an end on the expiry of a rent control statute. It was a mistake of fact even though to determine it the law may need to be applied.

107 Windeyer J at p 115 was also of the opinion that the misconception of the owner of the house when he let it was aptly called a mistake of fact. He identified a choice between two propositions – “on the one hand that of Dixon J. in this Court in Thomas v The King that “a mistake as to the existence of a compound event consisting of law and fact is in general one of fact and not a mistake of law” – on the other hand the rule that, when the facts are ascertained it is a question of law whether a thing or place answers a particular description in a statute”. However, the majority (McTiernan, Taylor and Owen JJ) were not of the opinion that the owner of the house was exculpated by his mistaken belief.

108 In Zarb v Kennedy (1968) 121 CLR 203 Barwick CJ concluded that a reasonably based honest belief that a magistrate had made a necessary finding to make Mr Zarb exempt from liability to serve national service would be a defence to a prosecution for failing to present himself for service.

109 In Griffin and Another v Marsh (1994) 34 NSWLR 104 at 118, after noting the comments made by Bray CJ in Power v Huffa (1976) 14 SASR 337 at 344 that if one of the components vital to the total belief is a belief on a question of law the mistake can only be a mistake of law, Smart J qualified the comment made by Bray CJ so as for it to apply only where the mistaken belief on the question of law is consequential upon or subsequent to a mistaken belief as to an important fact. Smart J recognised the opinion of Barwick CJ in Ianella that because some law has to be applied in determining a matter of fact it did not thereby cease to be a matter of fact. Smart J also referred to the observation by Clark JA in Von Lieven v Stewart; Kemish v Godfrey and Another (1990) 21 NSWLR 52 at 55 that a mistaken belief by the defendant as to the legal effect of the facts known to him was no defence. However, he then noted and identified a number of cases that underline the different situations that can arise and the different ways in which they are solved. The following dictum of Smart J at p 118 was considered by Olsson AUJ to be the correct principle in Palmer v Ostrowski [2002] WASC 39, unreported:-

“If any ultimate conclusion reached by an accused, including a conclusion of law, is vitiated or flawed by an earlier mistaken but honest and reasonable belief as to a relevant and important fact, usually the mistake should be regarded as one of fact.”

110 Olssen AUJ went on to conclude that the evidence in Palmer v Ostrowski revealed the existence of the type of compound event recognised by Dixon J in Thomas. In the Western Australian case the defendant had been supplied with copy material in relation to rock lobster fishing by Fisheries WA. The material was deficient in that a Fishery Notice had not been amended to indicate that a particular area was closed to rock lobster fishing. The Court found that the conclusion of the defendant that he was fishing in a permitted area was found to be initiated by his earlier mistaken and honest and reasonable belief induced by Fisheries WA that he was not fishing in closed waters. Malcolm CJ expressed the opinion that the mistaken belief under which the defendant laboured at the material time was a mistake of fact, namely that the materials with which he had been provided comprised a complete set of what was required to enable him to determine where he could and where he could not set his pots to fish for lobster. He was given a set of the relevant regulations, which, as a matter of fact, was incomplete.

111 Accordingly, the authorities show that if there is a mistaken belief as to a fact that leads to a mistaken belief as to the law, that is to be regarded as a mistake of fact.

112 Relevant to the present consideration is the following summary of the distinction between a mistake of fact or law by Handley JA in Von Lieven v Stewart at p 66:-

It is beyond argument that a reasonable but mistaken belief can only furnish an excuse where the mistake is one of fact: see He Kaw Teh v The Queen (at 532-533, 550-551, 572-574, 576 and 593). Otherwise the general principle applies that ignorance of the law is no excuse: see R v Turnball (1943) 44 SR (NSW) 108 at 109; 61 WN (NSW) 70 at 71 per Jordan CJ.
Accordingly a belief or assumption that the acts in question are lawful either because they are unregulated, or because the requirements of the law have been satisfied, cannot excuse in cases such as this. Nor can inadvertence excuse either. The only excuse is the existence of an actual or positive belief, based on reasonable grounds, in the existence of some fact or facts which, if true, would make the act in question innocent: see Proudman v Dayman (1941) 67 CLR 536 at 541 and He Kaw Teh v The Queen (at 575).

113 The belief claimed to be held by GWS was that the EPL was not breached because the licence authorised the continued operation of a system which was already in place and functioned as a first flush system thereby incorporating the potential for the discharge of stormwater run-off off-site. If, contrary to the Court’s finding, the licence did not allow for a discharge off the site then that is a matter to be determined by a proper construction of the licence. The defendant must show that its interpretation of the effect of the licence is a conclusion of fact that has the consequence of the defendant making a mistake in relation to the regulation of the site and thereby creating a belief or assumption that the acts in question were lawful under the PEO Act.

114 In Collector of Customs v Agfa-Gevaert Limited (1995 – 1996) 186 CLR 389 at 395 the High Court appears to have embraced the proposition that when words are used according to their ordinary meaning and it is reasonably open to hold that the facts of the case fall within those words the question as to whether they do or do not is one of fact. The mistake of the defendant, if there was one, amounted to a misunderstanding of the effect of condition A4.1 and possibly O3.5 of the EPL. The issue relates only to the ordinary meaning of the words. The High Court in Agfa-Gevaert raised a serious doubt that the effect or construction of a term whose meaning and interpretation is established is a question of law.

115 The majority of Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ made the following comment at p 397:-

If the notions of meaning and construction are interdependent, as we think they are, then it is difficult to see how meaning is a question of fact while construction is a question of law without insisting on some qualification concerning construction that is currently absent from the law.

116 The Court is of the opinion that the defendant in the presumed circumstances would have held a mistaken belief as to the fact of how the licence operated. Furthermore, it was a reasonable and honestly held belief notwithstanding that the EPA had, through its officers, voiced opinions to the contrary. Although Mr Kneebone expressly relied upon condition O3.5 when pressed by Mr Rushton in cross-examination, he nevertheless said that he had regard to the fact that the conditions of the licence have been built up over a period of years. Notwithstanding the deletion of condition W8 he asserts the retention of the first flush design should be observed as an operating condition of a physically installed system. That the belief was reasonable is confirmed by the Court’s construction of the effect of the licence. The EPA’s assertion to the contrary, even if re-iterated in correspondence addressed to the defendant as Mr Rushton asserts it is, does not thereby mean that the belief was not reasonably and honestly held by the defendant. That would be the case notwithstanding that the Court may have agreed with the EPA submission which, of course, it has not.

Officially Induced Error of Law

117 In Palmer v Ostrowski the defence of officially induced error of law was raised before the Full Court of the Supreme Court of Western Australia. On 9 May 2003 special leave was granted to appeal the decision to the High Court of Australia.

118 The Full Court of the Supreme Court of Western Australia refused to deal with the ground of officially induced error principally because it was raised for the first time on appeal. It is not appropriate to embark on an examination of the issue in this case where it is not necessary to do so, particularly as the concept has not, so far, been imported into Australian law, as far as this Court is aware.

Orders

119 The proposed formal orders of the Court reflect a finding that the defendant is not guilty of the charge in the summons as follows:-

(1) The defendant is not guilty of the offence against s 120(1) of the Protection of the Environment Operations Act 1997 as charged.

(2) The summons is dismissed.

(3) Costs reserved.

(4) The exhibits may be returned.