Environment Protection Authority v Grafil Pty Limited Environment Protection Authority v Mackenzie

[2022] NSWCCA 268

Court of Criminal Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Environment Protection Authority v Grafil Pty Limited Environment Protection Authority v Mackenzie [2022] NSWCCA 268

Hearing dates:

6 June 2022

Date of orders:

09 December 2022

Decision date:

09 December 2022

Before:

Gleeson JA at [1]
Bellew J at [2]
Hamill J at [144]

Decision:

In respect of the appeal brought against the first respondent, Grafil Pty Ltd:

(1) The appeal is allowed.
(2) The first respondent, Grafil Pty Ltd, is fined the sum of $100,000.00.
(3) The orders of the sentencing judge in respect of the conviction of Grafil Pty Limited, and the payment by Grafil Pty Limited of 25% of the appellant’s legal costs of the proceedings as agreed or assessed, and the payment of 25% of the appellant’s investigation costs, being a sum of $46,772.00, are confirmed.

In respect of the appeal brought against the second respondent, Robert Bruce Mackenzie, the appeal is dismissed.

Catchwords:

CRIMINAL LAW – Offences – Appeal – Sentence – Appeal by Environmental Protection Authority against sentence imposed upon a company (the first respondent) and its director (the second respondent) for an offence of using land as a waste facility without authority – Where first respondent was not fined but was ordered to pay the appellant’s legal and investigative costs – Where the charge against the second respondent was dismissed without conviction – Errors established as to the assessment of moral culpability of the offending and the role of general deterrence – Serious and extended offending – No basis on which to exercise the residual discretion to decline to intervene – First Respondent re-sentenced and fined – Charge against second respondent dismissed

CRIMINAL LAW – Investigation of offending by statutory authority – Criticisms made of the authority by the sentencing judge as to the manner in which the investigation was carried out – Necessity to distinguish between detecting an offence and obtaining evidence in support of it and conducting an investigation in a way which encourages or facilitates the offending – Where the conduct of the appellant in the present case fell into the former category – Suggestions that the appellant acted improperly and/or beyond the proper boundaries of its role not supported

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999 (NSW)

Criminal Appeal Act 1912 (NSW)

Criminal Code Act 1899 (Qld)

Environmental Planning and Assessment Act 1979 (NSW)

Fauna Conservation Act 1974 (Qld)

Protection of the Environment Operations Act 1997 (NSW)

Protection of the Environment Operations (Waste) Regulation 2005 (NSW)

Protection of the Environment Operations (Waste) Regulation 2014 (NSW)

Waste Avoidance and Resource Recovery Act 2001 (NSW)

Cases Cited:

Axer Pty Ltd v Environmental Planning Authority (1993) 113 LGERA 357

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

Chin v Ryde City Council [2004] NSWCCA 167; (2004) 133 LGERA 312

Director of Public Prosecutions (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194

Edwards v R [2021] NSWCCA 57

Environment Protection Authority v Barnes [2006] NSWCCA 246

Environment Protection Authority v Custom Chemicals Pty Limited [2016] NSWLEC 146

Environment Protection Authority v Edward Gilder [2018] NSWLEC 119

Environment Protection Authority v Geoff Robinson Pty Limited; Environment Protection Authority v Robinson [2011] NSWLEC 14

Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2018] NSWLEC 99

Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (2019) 101 NSWLR 245; [2019] NSWCCA 174

Environment Protection Authority v Grafil; Environment Protection Authority v Mackenzie(No 4) [2021] NSWLEC 123

Environment Protection Authority v Hanna [2010] NSWLEC 98

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

Grafil Pty Ltd v Environment Protection Authority; Mackenzie v Environment Protection Authority [2020] HCATrans 17 (14 February 2020)

Mulato v R [2006] NSWCCA 282

Paterson v R [2021] NSWCCA 273

R v Birtles [1969] 1 WLR 1047

R v Lau [2022] NSWCCA 131

R v Mandica & Spakianos (1980) 4 A Crim R 34

R v Miria [2009] NSWCCA 68

R v Piccin (No. 2) [2001] NSWCCA 323

R v Radich [1954] NZLR 86

R v Rushby (1977) 1 NSWLR 594

Taouk v R (1992) 65 A Crim R 387

Terrey v Department of Environment, Climate Change and Water [2011] NSWLEC 141

Veen v The Queen(No.2) (1988) 164 CLR 465; [1988] HCA 14

Walden v Hensler (1987) 163 CLR 561; [1987] HCA 54

Category:

Principal judgment

Parties:

Environment Protection Authority – Appellant
Grafil Pty Limited – First Respondent
Robert Bruce Mackenzie – Second Respondent

Representation:

Counsel:
M G Tedeschi KC and P English – Appellant
T G Howard SC and C R Ireland – First and Second Respondents

Solicitors:
Litigation Branch, Environment Protection Authority – Appellant
Johnson Winter Slattery – First and Second Respondents

File Number(s):

2016/157995; 2016/157886

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Land and Environment Court of NSW

Jurisdiction:

Criminal

Citation:

[2021] NSWLEC 123

Date of Decision:

5 November 2021

Before:

Pain J

File Number(s):

2016/157886, 2016/157995

HEADNOTE

[This headnote is not to be read as part of the judgment]

The activities of waste disposal and waste storage are declared to be “scheduled activities” by clauses 39 and 42 respectively of Schedule 1 to the Protection of the Environment Operations Act 1997 (NSW) (‘the Act’). Section 48 of the Act imposes licencing requirements for scheduled activities, and creates an offence against the occupier of any premises at which a scheduled activity is carried out in the absence of the necessary licence. A system of exemptions from the licencing requirements imposed by the Act operates in respect of scheduled activities. Two such exemptions were identified as being relevant in the present case, and both required a consumer to keep records of the quantity of waste received. The first respondent had been granted approval to construct an access road on land on which it carried out the business of sand excavation. Between about 29 October 2012 and 15 May 2013 it allowed between 24,000 and 44,000 tonnes of waste to be stockpiled on the land for the purpose of using it as road base for the construction of the access road. The receipt and stockpiling of the waste by the first respondent constituted the scheduled activities of waste disposal and waste storage. The first respondent did not have the necessary licence to carry out those scheduled activities and could only do so if it could avail itself of one or other of the identified exemptions. Both of those exemptions required a consumer in the position of the first respondent to maintain records of the quantity of material it had received, and the name and address of the supplier, for a period of 3 years. No such records were kept. The first respondent was found guilty of a charge contrary to s 144(1) of the Act, namely that as the occupier of land, it used that land as a waste facility without authority. The second respondent, who was a director of the first respondent, was found guilty of the same offence pursuant to the special executive liability provisions in s 169 of the Act. In respect of the first respondent, the sentencing judge did not impose any penalty but made orders requiring the first respondent to pay a portion of the appellant’s legal and investigation costs.

In respect of the second respondent, the sentencing judge dismissed the charge pursuant to s 10 of the Crimes (Sentencing Procedure) Act1999 (NSW). The appellant, which was the relevant regulatory authority, appealed against the orders made by the sentencing judge on the grounds that her Honour erred in:

1. finding that there was no failure of moral culpability on the part of either respondent;

2. finding that general deterrence had no role to play in determining sentence, and that neither respondent was an appropriate vehicle for general deterrence; and

3. imposing, in each case, a sentence which was manifestly inadequate.

Held per Bellew J (Gleeson JA and Hamill J agreeing):

1. In the case of the appeal brought against the first respondent, allowing the appeal, imposing a fine of $100,000.00 and confirming the remaining orders of the sentencing judge as to the payment, by the first respondent, of a percentage of the appellant’s investigation and legal costs;

2. In the case of the appeal brought against the second respondent, dismissing the appeal.

Ground 1

1. In the context of imposing a sentence for criminal offending, the term “moral culpability” refers to an offender’s general blameworthiness: at [84].

Paterson v R [2021] NSWCCA 273 referred to.

2. The finding of the sentencing judge that there had been no failure in moral culpability on the part of either respondent was not supported by the factors upon which her Honour relied: at [87]-[91].

3. Whilst the assessment of the objective seriousness of offending is regarded as a matter for the sentencing judge, the finding of the sentencing judge in the present case that the offending was not substantial was an error and entirely at odds with the fact that such offending involved the use of land as a waste facility over a period of almost 7 months, in the course of which between 24,000 and 44,000 tonnes of waste were deposited onto the land, absent any environmental or regulatory control: at [92].

4. In these circumstances Ground 1 was made out which led to the necessity to resentence the respondents. However, it was nevertheless appropriate to consider ground 2, given that it had been fully argued: at [94].

Ground 2

1. General deterrence is a fundamental principle of sentencing, both under statute and at common law: [104]-[108].

R v Rusbhy (1977) 1 NSWLR 594 applied; Veen v The Queen (No. 2) (1998) 164 CLR 465; [1998] HCA 14; R v Miria [2009] NSWCCA 68 referred to.

2. It has been expressly recognised that principles of general deterrence form an important aspect of sentencing in environmental crime.

Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34 referred to.

3. The findings of the sentencing judge in respect of general deterrence in the case against the first respondent reflected a number of errors. In particular, the finding that general deterrence had no role to play at all on sentence was contrary to one of the express statutory purposes of sentencing, and contrary to authority: [113]-[120].

Walden v Hensler (1987) 163 CLR 561; [1987] HCA 54 considered.

The residual discretion

4. There was no basis on which the Court should decline to intervene and re-sentence the respondents. That was particularly so in the case of the first respondent whose sentence was so manifestly inadequate that it posed a risk of undermining public confidence in the criminal justice system [121].

R v Lau [2022] NSWCCA 131 referred to.

Re-Sentence – First Respondent

5. In respect of the first respondent, there were no factors which operated to dilute the relevance of general deterrence on sentence. This was not simply a case of the respondent failing to keep records. Rather, it was a case of the first respondent permitting a significant amount of waste to be deposited over a significant period of time absent the necessary licence, and absent compliance with the obligations necessary to obtain the benefit of an exemption. The conduct of the first respondent in committing the offence undermined the objectives of the relevant regulatory scheme, as well as the legislative objectives of the offence itself: [127].

Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34; Environment Protection Authority v Hanna [2010] NSWLEC 98; Environment Protection Authority Pty Limited v Geoff Robinson Pty Limited; Environment Protection Authority v Robinson [2011] NSWLEC 14 referred to.

6. There was a fundamental requirement that any sentence imposed on the first respondent ensured that it was adequately punished for the offence it committed, that it was held accountable for its actions, and that its conduct was denounced in a manner which was proportionate to the level of objective seriousness of the offending. Whilst the payment of a prosecutor’s costs in a matter of this nature constituted an aspect of punishment, it was imperative that an actual financial penalty, in the form of a substantial fine, be imposed upon the first respondent to reflect all of the relevant sentencing considerations: at [131].

Environment Protection Authority v Custom Chemicals Pty Ltd [2016] NSWLEC 146; Environment Protection Authority v Edward Gilder [2018] NSWLEC 119; EPA v Barnes [2006] NSWCCA 246 at [78].

Re-sentence – Second Respondent

1. The finding that the second respondent was diagnosed with a major depressive disorder was particularly important and rendered him an inappropriate vehicle for general deterrence. The issue of general deterrence served as an important distinction between the two cases: [135]; [139].

Director of Public Prosecutions (DPP) (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194 applied.

2. The second respondent’s offending was not trivial, but a conclusion that offending is trivial is not a pre-requisite to the application of s 10(1)(a) of the Crimes (Sentencing Procedure) Act 1999 (NSW): at [137].

Chin v Ryde City Council [2004] NSWCCA 16; [2004] 133 LGERA 312; Terrey v Department of Environment, Climate Change and Water [2011] NSWLEC 141; R v Piccin (No. 2) [2001] NSWCCA 323 referred to.

3. Whilst it was necessary to be mindful of the repeated statements made by this Court which emphasise that there must be reasonable proportionality between any sentence and the objective gravity of offending, and that an offender’s subjective case, no matter how powerful, must not be permitted to result in a sentencing outcome which fails to reflect such gravity, taking all of the circumstances into account, the charge against the second respondent should be dismissed: at [140].

Edwards v R [2021] NSWCCA 57 referred to.

Obiter observations by Bellew J regarding the unjustified criticisms made by the sentencing judge as to the appellant’s conduct of the investigation: at [56] – [72].

Judgment

1. GLEESON JA: I agree with Bellew J.

2. BELLEW J:

INTRODUCTION

On 11 May 2016 the Environment Protection Authority (the appellant) commenced proceedings against Grafil Pty Limited (the first respondent) in the Land and Environment Court of NSW seeking (inter alia) an order in the following terms: [1]

(1) that [the first respondent] appear before a Judge of the Court to answer the charge that, from around 29 October 2012 to around 15 May 2013, at or near Salt Ash in the State of New South Wales, it committed an offence against section 144(1) of the Protection of the Environment Operations Act 1997 (NSW), in that being the occupier of land, it used the land as a waste facility without lawful authority.

1. AB 18.

3. Section 144(1) of the Protection of the Environment Operations Act 1997 (NSW) (the POEO Act) is in the following terms:

144 Use of place as waste facility without lawful authority

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

Maximum penalty--

(a) in the case of a corporation--$2,000,000 (if the offence involves asbestos waste) or $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--$500,000 (if the offence involves asbestos waste) or $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.

Note : An offence against subsection (1) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation--see section 169.

….

4. The following additional particulars of the offence alleged against the first respondent were provided:

1. the land was Lot 8 of DP 833768 at Salt Ash (Lot 8);

2. the nature of the offence was that Lot 8 was used as a waste facility for the storage and/or disposal of waste; and

3. the waste was material comprising, amongst other things, mixed construction and demolition waste containing asbestos which had been deposited to form stockpiles.

5. The appellant commenced separate proceedings against Robert Bruce Mackenzie (the second respondent) alleging that he committed an offence contrary to s 144(1) of the POEO Act (in the same terms as that alleged against the first respondent) by operation of the special executive liability provisions in s 169(1) which are in the following terms:

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--

(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.

….

6. The following additional particulars of the offence alleged against the second respondent were provided:

1. the first respondent, as the occupier, used Lot 8 as a waste facility without lawful authority; and

2. the second respondent was, throughout the period of the offending, a director of the first respondent.

7. Following the commencement of the proceedings, both the first and second respondents entered pleas of not guilty. After the determination of various interlocutory applications, a trial took place in the Court below over 20 hearing days in February and March 2018. At the conclusion of the trial, without entering final orders, the sentencing judge found each of the first and second respondents not guilty. [2] In reaching that determination, her Honour found (inter alia) that the appellant had the onus of proving, beyond reasonable doubt, that the first respondent did not have lawful authority to use Lot 8 as a waste facility (that being the third element of the offence alleged against it).

   2. Environment Protection Authority v Grafil Pty Limited; Environment Protection Authority v Mackenzie [2018] NSWLEC 99 (referred to by her Honour in the sentence judgment as “Grafil No 1”).

8. Following that determination, the appellant stated a case to this Court which comprised 15 questions, one of which raised an issue stemming from her Honour’s determination of the appellant’s onus of proof. This Court answered that question, and the majority of the other questions which were stated, in favour of the appellant, and remitted the proceedings to the Court below for re-determination in accordance with its judgment. [3] An application by the first and second respondents for special leave to appeal to the High Court of Australia was refused. [4]

   3. Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (2019) 101 NSWLR 245; [2019] NSWCCA 174 (referred to by her Honour in the sentence judgment as “Grafil CCA”.

   4. Grafil Pty Ltd v Environment Protection Authority; Mackenzie v Environment Protection Authority [2020] HCATrans 17 (14 February 2020).

9. When the proceedings came before the sentencing judge on remittal from this Court, neither the first nor the second respondent entered a plea, however, consistently with the concessions made by the respondents, the sentencing judge found each of the first and second respondents guilty.5 No agreement was reached between the parties in relation to the facts of the offending and a sentencing hearing then proceeded for a further six days in August 2021, following which her Honour reserved her decision.

7. In a judgment delivered on 5 November 2021 [5] (the sentence judgment) her Honour convicted the first respondent. Without imposing any fine, her Honour ordered the first respondent to pay:

1. 25% of the appellant’s legal costs of the proceedings in a quantum as agreed or assessed (subject to an earlier costs order); and

2. 25% of the appellant’s investigation costs, being $46,772. [6]

   5. Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 4) [2021] NSWLEC 123 (sentence judgment).

   6. Sentence judgment at [360].

11. Her Honour dismissed the charge against the second respondent pursuant to s 10(1)(a) of the Crimes (Sentencing Procedure) Act 1999 (NSW) (the Sentencing Act) without recording a conviction. [7]

    7. Sentence judgment at [361].

THE PRESENT APPEALS

12. By notices filed on 3 December 2021, the appellant has appealed against her Honour’s orders in respect of each of the respondents. The grounds of appeal are identical in each case, and assert that her Honour erred in:

1. finding that there was no failure of moral culpability on the part of either respondent;

2. finding that general deterrence had no role to play in determining sentence, and that neither respondent was an appropriate vehicle for general deterrence; and

3. imposing, in each case, a sentence which was manifestly inadequate.

13. Each appeal is brought pursuant to s 5D of the Criminal Appeal Act 1912 (NSW). In R v Lau [8] I summarised the principles governing such appeals to this Court as follows:

[71] In order to enliven the Court’s discretion pursuant to s 5D, the Crown must demonstrate error in one or more of the respects identified in House v The King. … [I]t is not necessary that a specific error be identified. The nature of the sentence itself may disclose that an error has occurred.

[72]   The primary purpose of a Crown appeal against sentence is to lay down principles for the governance and guidance of Courts having the duty of sentencing convicted offenders. However, the power to intervene also extends to doing what is necessary to avoid manifest inadequacy or inconsistency in sentencing. This Court cannot merely substitute its opinion as to the appropriate sentence, for that of the sentencing judge and may only interfere where error, either latent or patent, is demonstrated.

[73]   Even if the Court determines that the sentencing judge erred in the exercise of the sentencing discretion by imposing a sentence which was manifestly inadequate, the Crown must then satisfy the Court that the residual discretion to decline to intervene and re-sentence the respondent should not be exercised.

THE FACTS OF THE OFFENDING

8. [2022] NSWCCA 131 at [71]-[73].

Preliminary matters

14. The first step which must be taken by this Court in considering the grounds of appeal is to set out the facts of the offending as found by the sentencing judge. The sentence judgment does not include a specific and structured articulation of the factual findings which were made for the purposes of sentence. Further, in some important respects, submissions advanced in the sentence proceedings have simply been replicated in the sentence judgment, absent any clear indication as to whether they were actually accepted, and factual findings made in accordance with them. Other references to factual findings apparently made when the matter was first before the sentencing judge (i.e. prior to the proceedings before this Court) are interspersed through the sentence judgment, again absent any clear indication as to whether such findings were adhered to and taken into account. All of these matters create a difficulty for this Court in determining what facts were found for the purposes of sentence.

15. In these circumstances, and in response to this Court’s request for assistance, the parties provided a joint memorandum setting out (save for some discreet matters which are of limited significance) an agreed position as to the factual findings which were made by the sentencing judge, on the basis of which this Court was asked to proceed. The summary of facts which follows is based principally upon that agreed position.

The system of resource recovery exemptions

16. Schedule 1 of the POEO Act makes provision for “scheduled activities”. Clause 1 of Part 1 of that Schedule is in the following terms:

For the purposes of section 48, any activity that is declared by this Part to be a scheduled activity is taken to be an activity for which a licence is required for the premises at which it is carried out.

17. Waste disposal and waste storage are declared to be “scheduled activities” by clauses 39 and 42 respectively of Schedule 1.

18. Section 48 of the POEO Act imposes licencing requirements for scheduled activities, and creates an offence against the occupier of any premises at which a scheduled activity is carried out in the absence of the necessary licence.

19. A system of exemptions from the licencing requirements imposed by the POEO Act operates in respect of scheduled activities. Specifically, that system operates to exempt persons from (inter alia) the obligation to hold an Environmental Protection Licence (EPL) for the storage of waste. [9] In that regard, cl 51 of the Protection of the Environment Operations (Waste) Regulation 2005 (NSW) is in (inter alia) the following terms:

    9. Sentence judgment at [20].

51 General provisions relating to exemptions

(1)   The EPA may grant an exemption under this clause if authorised to do by another provision of this Regulation.

(2)   An exemption may be granted in relation to:

…

(d)   any activity or class of activities.

(3)   An exemption granted under this clause may be a general exemption or a specific exemption.

(4)   A general exemption may be given by way of notice published in the Gazette. A specific exemption may be given after an application is made to the EPA.

20. Exemptions are issued by the appellant from time to time in order to meet the objectives of the Waste Avoidance and Resource Recovery Act 2001 (NSW) (the WARR Act). Such objectives are aimed at facilitating the re-use and re-cycling of waste material, and diverting it away from landfill. [10] Producers (principally the operators of skip bin facilities) use the exemption system to supply large volumes of waste to consumers free of charge, in circumstances where:

1. those producers are subject to storage limits, and would otherwise be required to divert the waste to landfill at considerable cost;

2. consumers (such as the first respondent) wish to use the waste for various purposes (in this case, as road base); and

3. such consumers, by accepting the waste from the producers free of charge, avoid the cost they would otherwise incur in acquiring it. [11]

10. Sentence judgment at [16].

11. Sentence judgment at [36]; [76](7) – (11).

The applicable exemptions

21. The sentencing judge identified two relevant exemptions which were in force during the period of the respondents’ offending, namely: [12]

1. the Excavated Natural Material Exemption 2012 (the ENM exemption); and

2. the Continuous Process Recovered Fines Exemption 2010 (the CPRF exemption).

12. Sentence judgment at [20].

The ENM Exemption

22. Bearing in mind the provisions of s 48 of, and cls 39 and 42 of Schedule 1 to, the POEO Act, cl 5 of the ENM exemption is in the following terms:

Exemption

5. In this Notice of Exemption:

5.1.The responsible person listed in Column 1 of Table 1 is exempt from the provision/s listed in Column 2 of that table but only:

● in relation to activities involving the relevant waste, and

● where the responsible person complies with the conditions referred to in Column 3 of the table, and

● in the case of a consumer, in relation to the premises where the waste is applied to land as permitted by clause 7.2.

However, this Notice of Exemption does not exempt the responsible person from the provisions specified in Column 2 where the relevant waste is received at premises that are, despite this exemption, required to be licensed for waste disposal (application to land) activities under the provisions of the Act.

5.2. Where a responsible person complies with the conditions of this Notice of Exemption, the activity referred to in Schedule 1 from which that person is exempt is taken to be a non-scheduled activity for the purposes of the Act.

Table 1

Colum 1	Column 2	Column 3
Responsible person	Provisions from which the responsible person is exempt	Conditions to be met by the responsible person
Generator	section 48 of the Act in respect of clause 39 of Schedule 1 to the Act	all requirements specified in section 7 and 8
Consumer	section 48 of the Act in respect of clauses 39 and 42 of Schedule 1 to the Act section 88 of the Act clause 47 of the Regulation	all requirements specified in section 7 and 9

23. Clause 6 of the ENM exemption includes the following relevant definitions:

Consumer means a person who applies, causes, or permits the application to land of excavated natural material within the definitions of “application to land” in accordance with the Act. The consumer may be the landholder responsible for the land to which excavated natural material is applied.

Excavated natural material is naturally occurring rock and soil (including but not limited to materials such as sandstone, shale, clay and soil) that has:

(a)   been excavated from the ground, and

(b)   contains at least 98% (by weight) natural material, and

(c) does not meet the definition of Virgin Excavated Natural Material in the Act.

24. There was no dispute before the sentencing judge that the first respondent was a “consumer” as defined in cl 6, nor was there any dispute that the waste which was the subject of the charge against each respondent fell within the definition of “Excavated Natural Material” (ENM).

25. Clause 9 of the ENM exemption included the following provisions:

Consumer responsibilities

9.   The following conditions must be met by the consumer for this exemption to apply:

…

9.2.   The consumer must keep records of the quantity of the excavated natural material received as well as the suppliers’ name and address, for a period of three years.

…

The CPRF Exemption

26. Clause 5 of the CPRF exemption was in similar terms to cl 5 of the ENM exemption. It operated to exempt a consumer (which was defined in the same terms as in cl 6 of the ENM exemption and thus included the first respondent) from the licencing requirements prescribed by s 48 of the POEO Act in relation to the scheduled activities of waste disposal and waste storage, in respect of “continuous process recovered fines” (recovered fines). The term “recovered fines” was defined in cl 6 of the CPRF exemption to mean:

… a soil or sand substitute with a typical particle size of less than 9.5mm that is derived from the processing of mixed construction and demolition waste including residues from the processing of skip bin waste.

27. Deriving the benefit of the CPRF exemption was conditional upon compliance, by the consumer, with cls 7, 9, 10 and 11. Clause 7 was in (inter alia) the following terms:

General conditions

7.   This Notice of Exemption is subject to the following conditions:

…

7.2   The “continuous process” recovered fines can only be applied to land for the purposes of construction or landscaping. This approval does not apply to any of the following applications:

…

7.2.7   Construction of roads on private land unless:

….

(b)   a development consent for the development has been granted under the relevant Environmental Planning Instrument (EPI)

…

28. Clause 9 of the CPRF exemption included the following:

Consumer responsibilities

9. The following conditions must be met by the consumer for this exemption to apply:

9.1. Records of the quantity of the “continuous process” recovered fines received by the consumer and the suppliers' name and address must be kept for a period of three years. [13]

…

13. Sentence judgment at [22].

Approvals and consents issued to the first respondent

29. The first respondent traded under the name “Macka’s Sand & Soil Supplies” and operated its business from a parcel of land which included Lot 8. It was the holder of an EPL permitting it to carry out “land-based extractive activity” and “crushing, grinding or separating works”. [14]

    14. Sentence judgment at [75](1).

30. On 20 September 2009, pursuant to Part 3A of the Environmental Planning and Assessment Act 1979 (NSW), the first respondent was granted an approval (the Part 3A approval) to construct an access road to facilitate the transport of sand from a nominated extraction point to a nearby processing facility. [15]

    15. Sentence judgment at [50]; [75](2); [76](1).

31. The access road had not been constructed at the time of the offending. [16] The waste which was deposited onto Lot 8 and which was the subject of the charges was suitable for use as road base, and thus suitable (in the belief of the second respondent [17] ) for the construction of the access road, subject to it not containing asbestos waste which prevented its re-use or recycling. [18] Construction of the access road required approximately 34,000 tonnes of road base. [19]

    16. Sentence judgment at [50]; [75](2).

    17. Sentence judgment at [76](1) – (3).

    18. Sentence judgment at [75](3)-(4); [215].

    19. Sentence judgment at [76](2).

32. The Part 3A approval was modified on 30 September 2013 to provide for an alternate proposed access road. It was further modified on 15 March 2016 to allow a diversion of the proposed access road. [20] Those modifications to the Part 3A approval were therefore made after the offending occurred. The first respondent intended to use the waste which was deposited on to Lot 8 to construct the access road pursuant to the modified Part 3A approval. [21] But for the prosecutions brought by the appellant, the waste would have been used for that purpose, such that, once deposited, it would not have remained permanently on Lot 8. [22]

    20. Sentence judgment at [50].

    21. Sentence judgment at [75](12).

    22. Sentence judgment at [243].

The offending – the use of Lot 8 as a waste facility

33. The receipt and stockpiling of the waste by the first respondent constituted the scheduled activities of waste disposal and waste storage [23] and took place between about 29 October 2012 and 15 May 2013. [24] During the entirety of that period, Lot 8 was occupied by the first respondent. [25] Between 24,000 and 44,000 tonnes of waste, in the form of both recovered fines and ENM, were received and stockpiled on Lot 8. [26] The waste included dark brown soil mixed with bricks, concrete, glass, plastic, wood, timber and tiles. [27] The purpose of receiving and stockpiling the waste was to use it in the construction of the access road once that was permitted by the modified Part 3A approval. [28] Ultimately, the appellant intervened and prevented the waste being used for that purpose. As a result, the first respondent was put to the cost of acquiring other material which was suitable for construction of the access road, at a cost of $200,000.00. [29]

    23. POEO Act, s 48; Sch 1, Cls 39 and 42.

    24. Sentence judgment at [55] – [56]; [75](9).

    25. Sentence judgment at [38]; [75](6).

    26. Sentence judgment at [75](7); [86].

    27. Sentence judgment at [75](6) – (8).

    28. Sentence judgment at [87].

    29. Sentence judgment at [93].

34. The first respondent did not have an EPL in relation to the scheduled activities of waste disposal and waste storage. [30] Accordingly, it could only carry out those activities if it could avail itself of an exemption. Both the ENM exemption [31] and the CPRF exemption [32] required a consumer in the position of the first respondent to maintain records of the quantity of material it had received, and the name and address of the supplier, for a period of 3 years. No such records were kept by either the first respondent or the second respondent.

    30. Sentence judgment at [69].

    31. At cl 9.2.

    32. At cl 9.1.

35. Both the ENM and CPRF exemptions also required sampling and testing for certain chemicals and particle sizes. The processors were required to certify the consumers that the processed material was recovered fines or excavated natural material which met the testing requirements. [33] Asbestos was present in the waste. [34] In that regard, each of the processors who brought the waste on to Lot 8:

    33. Sentence judgment at [36];[76](13).

    34. Sentence judgment at [61].

1. was forbidden to receive asbestos;

2. had an asbestos management plan in place;

3. was required to conduct sampling and testing of the waste for the purposes of the ENM exemption and the CPRF exemption; and

4. was required to certify to consumers that the material deposited on to Lot 8 was recovered fines or excavated natural material which satisfied the exemptions. [35]

35. Sentence judgment at [75](5).

THE OBJECTIVE SERIOUSNESS OF THE OFFENDING

36. In assessing the objective seriousness of the offending, the sentencing judge expressly recognised the necessity for any sentence imposed to reflect (inter alia) “all the relevant objective circumstances of the offence”. [36] In that regard, her Honour found (inter alia) that:

    36. Sentence judgment at [4].

1. a consumer was obliged to keep records pursuant to condition 9.1 of the CPRF exemption, and condition 9.2 of the ENM exemption; [37]

2. that obligation was readily understandable, and required a consumer to keep a record, for 3 years, of the quantity of material received, and the supplier’s name and address; [38]

3. the first respondent did not comply with that obligation; [39] and

4. the first respondent did not have in place a modified Pt 3A approval permitting construction of the access road for which the material was intended to be used, [40] as a consequence of which it was unable to have the benefit of any exemption. [41]

   37. Sentence judgment at [200].

   38. Sentence judgment at [200].

   39. Sentence judgment at [75](9) – (10).

   40. Sentence judgment at [214].

   41. Sentence judgment at [228].

37. Whilst these findings addressed the obligations under the ENM and the CPRF exemptions, they did not directly address the gravamen of the actual offending, which was the use of Lot 8 as a waste facility without authority.

38. The sentencing judge found that the failure of a consumer to meet obligations imposed by the system of exemptions had “substantial legal and practical ramifications”. [42] Those ramifications included what her Honour described as “the practical difficulty (impossibility) of complying with the consumer obligations under the CPRF exemption, particularly in relation to the sampling and testing obligations of the processors”. [43] In addressing the obligations of a consumer under the system of exemptions, her Honour found that record keeping requirements which were imposed by each of the ENM and CPRF exemptions, with which the respondents did not comply, were “onerous in the sense that the legal consequence of not complying with this condition in full is that they do not have the benefit of an exemption, with potentially grave legal and financial consequences”. [44] Her Honour went on to say: [45]

[202] I accept [the appellant’s] submission that a consumer doing what is required aids in the regulatory task but a consumer's failure to do so does not mean such information is not available. [The appellant] could have found out the same information required to be kept by [the first respondent] from the processors.

42. Sentence judgment at [185].

43. Sentence judgment at [187].

44. Sentence judgment at [200].

45. Sentence judgment at [202].

39. Again, these considerations did not specifically address the circumstances of the actual offending, namely the use of Lot 8 as a waste facility without lawful authority. Moreover, the fact (if it be the fact) that the appellant could have ascertained the relevant information from the processors was largely, if not entirely, irrelevant to any issue on sentence.

39. The sentencing judge went on to observe that a “fundamental consideration for environmental offences is the extent to which the defendant’s conduct offends against the legislative objectives expressed in the offence”. [46] Having recounted the submissions of the parties in relation to this issue, and having made reference to the previous judgment of this Court, her Honour concluded: [47]

[214] … [The respondents] are guilty because, firstly, they did not keep the records required by Condition 9.1 of the CPRF exemption and Condition 9.2 of the ENM exemption. Secondly, [the first respondent] did not have development consent for the intended road under the EPA Act rather it had a Pt 3A approval for which it was seeking a modification. Thirdly, if [the respondents’] understanding of [the previous judgment of this Court] is correct the temporary stockpiling of the material was found to be the application of waste to land and required an EPL. Consequently [the respondents] cannot obtain the benefit of the exemptions.

46. Sentence judgment at [208].

47. Sentence judgment at [214].

41. Although not relied upon by the appellant as a patent error, the conclusion of the sentencing judge that the respondents were guilty because “they did not keep the records required …” was not a correct classification of the offending. As I have pointed out, the respondents were guilty of the offending because Lot 8 was used as a waste facility without authority. The respondents were not charged with failing to keep records.

42. The sentencing judge then turned to the state of mind of each of the respondents, and said: [48]

[218] … What is important is that the offending or breach of the CPRF exemption and [the appellant's] regulatory regime, and the planning regime, were not intentional – [the second respondent] was in fact of the view he was being careful to comply with the regulatory regime by specifying that only clean fill would be received, receiving from reputable the [the appellant’s] licensed facilities, opening up his premises for regular [appellant] inspection, and specifically storing the stockpiled material until the Department of Planning modified the extant Pt 3A approval to formally authorise the alternative access road.

48. Sentence judgment at [218].

43. Her Honour went on to say: [49]

[219] In my view, [the appellant] relying on intentional stockpiling as relevant to state of mind in relation to a strict liability offence needs to be carefully considered. Such a submission has the danger of impermissibly inflating the seriousness of the strict liability offence in s144(1). No culpability arises from identifying that [the respondents] had recovered fines brought to Lot 8 for free and stockpiled them with the intention of using them on an access road through utilisation of the recovered fines exemptions and I accept [the respondents’] submissions in the immediately preceding paragraph in this regard.

49. Sentence judgment at [219].

44. The sentencing judge concluded [50] that the fact that the first respondent had been carrying on a commercial business at the time of the offending, and the fact that the offending occurred in the course of operating that business, did not mean that the offending was committed for financial gain. Whilst accepting that stockpiling of the waste had saved both of the respondents significant cost, [51] her Honour concluded: [52]

[224] … Saving money in this context by [the respondents] is not relevant to the objective seriousness of these strict liability offences. Nor does the fact that [the first respondent] was carrying out a commercial operation have any relevance to culpability. That is simply what [the first respondent] as a consumer of recovered fines was doing at the time of the offences.

50. Sentence judgment at [223].

51. Sentence judgment at [220].

52. Sentence judgment at [224].

45. The sentencing judge recognised that the maximum penalty for the offending was relevant to determining the objective seriousness of the offending, and that it reflected the Parliament’s public expression of such seriousness. [53] In that regard, her Honour then proceeded to cite the submissions advanced on behalf of the respondents in this respect, [54] namely that s 144(1) of the POEO:

1. captured a wide spectrum of conduct;

2. fell into the category of provision in respect of which “the maximum penalty has been set at a high catch-all level”; and

3. specified a maximum penalty which provided virtually no assistance in determining the appropriate penalty, particularly given the low moral culpability of the respondents.

   53. Sentence judgment at [225].

   54. Sentence judgment at [227].

46. Although it is not entirely clear whether her Honour actually accepted those submissions, I have proceeded on the assumption that she did so. That being the case, her Honour’s apparent acceptance of a submission that the maximum penalty provided virtually no assistance in determining the appropriate penalty did not sit entirely comfortably with her earlier observation that the maximum penalty was relevant to determining the question of objective seriousness.

47. Her Honour then turned to s 241(1) of the POEO Act which sets out a number of matters to be considered in imposing a penalty for an offence contrary to s 144(1). In doing so, her Honour said: [55]

[228] As [the respondents] submitted, the breaches they have been found guilty of in relation to s 144(1) concern, firstly, the failure to keep records as required by Condition 9.1 of the CPRF exemption and Condition 9.2 of the ENM exemption. Secondly, a development consent under the EPA Act was required by Condition 7.2.7 of the CPRF exemption. At the time of the offences the [respondents] had in place a Pt 3A approval including for an access road. The [respondents] were seeking a modification of the Pt 3A approval for an access road in a different location at the time of the offences. The failure to have in place the modified Pt 3A approval for the road for which the material was intended to be used resulted in the [respondents] being unable to have the benefit of the exemptions. Thirdly, it appears that temporarily stockpiling the material because it was waste was also a breach of the POEO Act because that was applying it to land (as noted above in [204]-[205] the implications of such a finding are unclear). Those are the factors in relation to which s 241(1) of the POEO Act should be addressed.

55. Sentence judgment at [228].

48. Again it is not entirely clear whether her Honour accepted the submissions to which she referred, but I have inferred that she did so. Assuming that to be the case, I again emphasise that the respondents were not guilty of an offence contrary to s 144(1) of the POEO Act because they failed to keep records or failed to have a modified Part 3A approval in place. They were guilty because they used land as a waste facility without lawful authority.

49. In further addressing the provisions of s 241(1) of the POEO Act, the sentencing judge found that:

1. although asbestos was present in the waste it did not constitute harm caused, or likely to be caused, by the offending; [56]

   56. Sentence judgment at [236] – [237]; POEO Act s 241(1)(a).

2. there was nothing that either of the respondents could have done to prevent asbestos coming on to Lot 8; [57]

3. it had not been established that there was any actual harm occasioned to that part of Lot 8 on which the waste had been stockpiled; [58]

4. there was no harm arising from the offending which the respondents could have foreseen; [59]

5. the respondents had control over obtaining approval for the alternative access road in a timely manner; [60] and

6. the ability to temporarily stockpile material before being used in the construction of the access road was a practical necessity for a consumer such as the first respondent. [61]

   57. Sentence judgment at [238]; POEO Act s 241(1)(b).

   58. Sentence judgment at [239]; POEO Act s 241(1)(b).

   59. Sentence judgment at [244]; POEO Act s 241(1)(c).

   60. Sentence judgment at [247]; POEO Act s 241(1)(d).

   61. Sentence judgment at [245] – [248]; POEO Act s 241(1)(d).

50. As to the presence of asbestos in the waste, the sentencing judge found that there was no obligation for consumers to view test results under the CPRF exemption, and that there was no requirement for asbestos testing under either the CPRF exemption or the ENM exemption. [62] Her Honour found that the management of asbestos in the context of the system of exemptions was highly problematic because providing material satisfied the testing regime specified in Conditions 10, 11, 12 of the CPRF exemption, [63] unwitting consumers may have no knowledge that they had received asbestos.

    62. Sentence judgment [177].

    63. Sentence judgment at [178].

51. The ultimate conclusion of the sentencing judge as to the objective seriousness of the offending was expressed as follows: [64]

[250] No failure in moral culpability of either [respondent] arises from the circumstances giving rise to the strict liability offence under s 144(1) of the POEO Act and the special executive liability provision in s 169(1). The complexity of the statutory waste scheme under the POEO Act and Waste Regulation for consumers has been discussed above in [162]-[206]. The legal and financial risks to consumers of the statutory scheme concerning the operations of the exemptions are substantial. It is reasonable to describe the breaches giving rise to the offences as not substantial in the context of the regulatory scheme, namely the failure to keep records in Condition 9.1 of the CPRF exemption and Condition 9.2 of the ENM exemption. Similarly, the failure to wait for approval for the modified access road under the Pt 3A approval which was obtained after the charge period is also fairly described as not a substantial breach. As identified in [204] above, the implications of the finding in Grafil CCA concerning temporary stockpiling on land being disposal of waste to land, possibly preventing reliance on the exemptions at all, are yet to be fully understood. Expecting [the first respondent] to have been aware that temporary stockpiling of material was disposal of waste on land was not a matter [the first respondent] could or should have been aware of before Grafil CCA.

[251] The extensive evidence adduced on environmental impacts has not established any actual environmental harm, as [the appellant] conceded. Nor did the evidence demonstrate beyond reasonable doubt any likelihood of harm other than in relation to the presence of asbestos. The presence of asbestos in the material deposited on Lot 8 did not arise from any action or inaction of [the respondents].

[252] The circumstances of the offence under s 144(1) are in the low range of objective seriousness.

SPECIFIC DETERRENCE

64. Sentence judgment at [250] – [252].

52. The sentencing judge found [65] that there was no need for any penalty imposed on the first respondent to reflect a need for specific deterrence. In light of the conclusions which were reached in respect of the second respondent’s subjective case (which are set out below), it would appear that her Honour also concluded that specific deterrence had no role to play in his case, although no such finding was expressly stated.

    65. Sentence judgment at [297].

GENERAL DETERRENCE

53. In relation to the issue of general deterrence, the sentencing judge said the following: [66]

[293] As submitted by [the respondents], in relation to general deterrence, the frequency with which recovered fines are deposited elsewhere in this locality and generally without action by the appellant suggests that any significant element or portion of any fine referable to the general deterrence purpose of sentencing would run contrary to Walden v Hensler (1987) 163 CLR 561; [1987] HCA 54 by requiring the [the first respondent] to shoulder an unfair burden of community education, at 570 per Brennan J. The Defendants submitted that this case does not present comfortably as an appropriate vehicle for general deterrence including because of Grafil’s low moral culpability and because of the incoherent regulatory regime that exposed it to liability.

[294] [The respondents] submitted that any fine imposed would be minimal and proportionate to the very low objective seriousness of the offending and strong subjective case of [the respondents], including the extra-curial punishment they have already suffered.

[295] I agree with these submissions in relation to general deterrence.

THE RESPECTIVE SUBJECTIVE CASES

66. Sentence judgment at [293] – [295].

The first respondent

54. The principal findings of the sentencing judge in terms of the subjective circumstances of the first respondent were as follows:

1. the absence of environmental harm was a mitigating factor; [67]

2. the good character of, and contributions to the community by, the second respondent, could be attributed to the first respondent, as a consequence of which the first respondent should be regarded as being of good corporate character; [68]

3. the second respondent, on behalf of the first respondent, has expressed contrition and remorse for the failures of which the first respondent was found guilty, not in a qualified way, but in terms which reflected acceptance (on the part of both respondents) of the criminality involved in the offending; [69] and

4. through the conduct of the second respondent, the first respondent had co-operated with the authorities as far as was possible in the circumstances. [70]

67. Sentence judgment at [286].

68. Sentence judgment at [288].

69. Sentence judgment at [289].

70. Sentence judgment at [290]-[291].

The second respondent

55. The principal findings of the sentencing judge in terms of the subjective circumstances of the second respondent were as follows:

1. the second respondent believed that it was lawful for him to receive and stockpile the waste for the purposes of road construction, and believed that he was following all applicable procedures, to the point where, had he been told not to receive the waste by the appellant, he would have immediately ceased to do so; [71]

   71. Sentence judgment at [95]; [97]; [254].

2. the second respondent had stockpiled the waste on Lot 8 (as opposed to stockpiling it closer to the location of the proposed access road) to eliminate any suggestion that he was trying to use the waste prior to obtaining the necessary planning approval; [72]

   72. Sentence judgment at [88].

3. upon the appellant’s intervention, the second respondent immediately complied with all directions in relation to the waste; [73]

   73. Sentence judgment at [101].

4. the second respondent was “very sorry” for not having retained the records which he now knew were required to be maintained, and regretted not having had the required approval in place before stockpiling the waste; [74]

5. the conduct of the search and seizure operation on 15 May 2013 had caused the second respondent significant trauma from which he was yet to recover; [75]

6. the second respondent was a person of prior good character as demonstrated by (inter alia) his devotion to his family and his business, his contributions to the community, the character evidence adduced on his behalf, and the fact that this was the first “criminal issue” he had faced; [76]

7. the second respondent had been diagnosed with a major depressive disorder after being charged, which had affected both his personal relationships with his family and his work performance; [77] and

8. the second respondent had experienced extra-curial punishment in light of the length of time proceedings had taken to resolve, the deterioration in his relationship with the local Indigenous community, and the significant reputational harm and associated difficulties with his customers which had been brought about by negative media publicity. [78]

74. Sentence judgment at [100].

75. Sentence judgment at [258].

76. Sentence judgment at [103] – [104]; [120] – [124]; [274].

77. Sentence judgment at [103]; [125]; [260]; [280].

78. Sentence judgment at [102]; [260].

THE APPELLANT’S INVESTIGATION OF THE OFFENDING

56. Before turning to the grounds of appeal, I consider it necessary to address a discrete aspect of the sentence judgment, namely the assessment, by the sentencing judge, of the appellant’s investigation into the respondents’ offending. Given that the appellant did not rely upon this aspect of her Honour’s judgment as constituting patent error, I should make it clear that I have not taken it into account in reaching my conclusions as to the various grounds of appeal. That said, it remains the case that part of the role of this Court is to provide guidance to sentencing judges, and it is in that context that I address the matter.

57. In the course of the sentencing judgment, her Honour was repeatedly critical of the appellant’s conduct of the investigation into the offending. To begin with, her Honour said: [79]

[76](14) [The appellant] was aware at all relevant times from October 2012 that materials produced at certain skip bin facilities in Sydney were being transported from those skip bin facilities to places which included a stockpile on Lot 8.

[76](15) [The appellant] systematically (using undercover surveillance techniques) monitored the growth of the subject stockpiles on Lot 8 from the first load delivered there in November 2012 right through until the time they conducted their raid on 15 May 2013, by which time the stockpiles had reached their completion in the sense that no further material has since been added to them, Grafil No 1 at [54]-[61], [90].

79. Sentence judgment at [76](14) – (15).

58. Her Honour then said: [80]

[240] [The respondents] submitted that there is a stand-out practical measure that could have been taken by [the appellant] to prevent the commission of the offences, namely raising its concerns about what was happening with [the second respondent]. Then the receipt of the material would have immediately ceased. Instead [the appellant] chose to monitor in secret the generation, supply, transportation, delivery and stockpiling of this material on Lot 8. During the whole period that [the appellant] monitored delivery of material to Lot 8 it did nothing to alert [the respondents], the processor or transporters to any concern it may have had in relation to the generation, supply, transportation, receipt or stockpiling of the material on Lot 8. [The appellant] cannot shy away from its own responsibility for its decision to sit on its hands and let the stockpiles grow while it watched in secret, doing nothing to stop it. [The appellant] cannot shy away from its responsibility for deciding not to communicate any concerns about the transactions either to [the first respondent], the holder of the EPL or to the processors who were licence holders of the facilities which generated and supplied the material, or to the transporters who transported it by trucks up a public road to Lot 8.

[241] [The respondents] submitted that given the regular inspections and the compliant attitude of [the respondents], the amazement recorded in [the second respondent’s] affidavit …. is well justified. It has not been adequately explained why [the appellant] felt the need to conduct clandestine surveillance of Lot 8 when, if there had been any concern at all, all [the appellant] needed to do was knock on [the respondents’] front door. All activities were being carried out by [the respondents] in the open and on display, the material was transported on public roads and the stockpiles were in plain view.

80. Sentence judgment at [240] – [241].

59. Once again her Honour did not expressly state whether she accepted the various submissions to which she referred in those passages. However, in light of what followed I have inferred that she did so.

60. Later, in the context of addressing a submission advanced on behalf of the second respondent that the charge against him should be dismissed pursuant to s 10 of the Sentencing Act, her Honour said: [81]

[254] [The second respondent] submitted that such an order is warranted in the circumstances of this case given the need for a court to provide individualised justice. [The appellant] undertook covert surveillance over the whole time the recovered fines were delivered to Lot 8 when [the second respondent’s] evidence quite sensibly was that he would have stopped receiving the material immediately if approached by [the appellant]. [The appellant] systematically monitored, in secret, the growth of the subject stockpiles from the first load delivered there in October 2012 right through to the time of [the appellant’s] raid on [the first respondent], [the second respondent] and Lot 8 on 15 May 2013. This was done by covert surveillance by [the appellant’s] officers from adjacent bushland and also by the placement of static automated cameras in the national park outside Lot 8, Grafil No 1 at [182].

[255]… [The respondents] came to the attention of [the appellant] in the course of Operation Trojan, a surveillance operation which observed that trucks carrying recovered fines were going to sites other than Lot 8. … It was a clandestine operation, with [the appellant’s] principal witness in the trial having been directed not to mention Operation Trojan in her affidavit. … The only prosecutions arising from Operation Trojan are of [the respondents]. There was a nil response to [the respondents’] notice to produce dated 24 February 2021 as amended on 26 May 2021 requesting all documents comprising court initiating processes and penalty notices from 1 March 2012 arising from Operation Trojan against persons other than [the respondents]. There is no evidence that at any time [the appellant] ever stopped to sample a single load from the Sydney recyclers which was transported to Lot 8. [The second respondent] submitted there is no evidence [the appellant] has taken any punitive action against any consumer of recovered fines exported from waste facilities in Sydney apart from [the respondents]. [The second respondent] feels unfairly targeted by [the appellant].

81. Sentence judgment at [254] – [255].

61. Finally, her Honour said: [82]

[257] This is a strict liability offence and the actions of [the second respondent], the transporters and the processors were all conducted in what to them was the usual course of business. There was nothing clandestine about these activities. [The appellant’s] waste compliance officers’ behaviour is more akin to the investigation of a mens rea crime by a law enforcement agency, like drug dealing. [The appellant] is a regulator administering the waste regulatory system in NSW and issued EPLs for scheduled activities carried on at Lot 8. R v Taouk (1992) 65 A Crim R 387 … was an entirely different situation concerning serious criminal activity an element of which involved mens rea. The failure of [the appellant] to raise any concerns with [the first respondent] an entity regulated by them under the EPL system, has resulted in [the second respondent] being criminally liable for something he did not know was wrong. Had [the appellant] acted more in keeping with its role these offences could have been entirely avoided.

82. Sentence judgment at [257].

62. The essence of the consistent, and indeed strident, criticism of the appellant’s conduct of the investigation by the sentencing judge is encapsulated in that paragraph of the sentence judgment extracted immediately above. In particular, it is apparent from the final sentence of that paragraph that her Honour attributed some degree of responsibility for the commission of the offences to the appellant. That responsibility was apparently said to stem from what her Honour obviously viewed as an investigation which was inappropriately conducted in a number of respects, and one in which the appellant had encouraged, if not facilitated, the commission of the offences by the respondents. It is not clear from the sentence judgment how, having reached such a conclusion, her Honour took it into account on sentence. However, in the circumstances I am left to conclude that her Honour regarded the appellant’s conduct of the investigation as a mitigating factor which was to be taken into account in favour of the respondents.

63. In my view, for the reasons that follow, her Honour’s criticisms of the investigation were largely, if not wholly, unwarranted, and were, in some respects, erroneous. Such criticisms provided no support whatsoever for a conclusion that the appellant’s conduct of the investigation was a mitigating factor.

64. There have been instances in which appellate Courts have expressed disapproval of the actions of investigative authorities where such actions have amounted to inciting or encouraging criminal offending. In such cases, the view has been expressed that offenders who are so incited or encouraged may have some legitimate expectation of leniency. For example, in R v Birtles [83] Lord Chief Justice Parker said the following:

… [B]ut it certainly seems to this court, doing the best that they can in the matter, that there is a real possibility that the defendant was encouraged, by the informer and indeed by the police officer concerned, to carry out this raid on the post office. Whether or not he would have done it without that, again no one can say, but there is, as it seems to this court, a real likelihood that he was encouraged to commit an offence which otherwise he would not have committed.

It is in those circumstances that this court is asked to review this sentence. On that assumption, that he so encouraged, the court is quite satisfied that some reduction in sentence is called for.

83. [1969] 1 WLR 1047 at 1049.

65. However, as was pointed out by the Full Court of the Supreme Court of South Australia in R v Mandica & Spakianos,[84] such a ground for leniency is not made out where the investigative conduct in question amounts to nothing more than detecting the offence, and obtaining evidence against an offender who is only too ready to commit it. It is important to distinguish between that type of investigative conduct, and the type referred to in Birtles, namely investigative conduct by which the person under investigation is encouraged by the relevant authority to commit an offence which he or she would not otherwise have committed. In the present case, the conduct of the appellant fell into the former category, not the latter. Contrary to the conclusions reached by the sentencing judge, there is nothing whatsoever to suggest that the appellant’s conduct in the course of its investigation encouraged either of the respondents to engage in the offending, nor is there anything to suggest that the appellant’s conduct of its investigation had facilitated the offending.

    84. (1980) 4 A Crim R 34 at 42 per King CJ, Jacobs and Mohr JJ agreeing.

66. Further, the conclusion of the sentencing judge that any offending would have ceased had the appellant “knocked on the respondents’ front door” was reached with the benefit of hindsight, in the sense that it was obviously based upon the acceptance of the evidence of the second respondent. [85] There is nothing to support the proposition that the appellant was somehow aware of that position when the investigation was on foot. To use that evidence to criticise the appellant, in circumstances where the appellant was obviously unaware of it at the material time, was, in my view, unfair.

    85. See [55](i) above.

67. In the course of reaching her conclusions regarding the appellant’s conduct of the investigation, the sentencing judge cited the decision of this Court in Taouk v R [86] and expressed the view that the circumstances of that case reflected “an entirely different situation” to those of the present case. The basis of that distinction was said to be that the circumstances in Taouk involved “serious criminal activity an element of which involved mens rea”. Two observations should be made in respect of that aspect of the sentence judgment.

    86. (1992) 65 A Crim R 387, cited by her Honour in the sentence judgment at [257].

68. First, the fact that the offending in the present case did not require proof of mens rea on the part of either respondent was, in my view, of limited significance. The absence of a requirement to prove mens rea did not support a conclusion that the offending was not serious, nor did it support a conclusion that the investigation was conducted in an inappropriate way. As the sentencing judge expressly recognised, the maximum penalty prescribed for the offending reflects the seriousness with which the Parliament views it.

69. Secondly, even accepting that the facts in Taouk are distinguishable on the basis to which her Honour referred, the greater significance of the Court’s decision in that case lies in the observations of Badgery-Parker J who, after reviewing a number of authorities, said the following: [87]

In several of these cases, there are hints that impropriety on the part of the police is the factor which leads to mitigation of sentence; but in my view that is not the substance of what the courts were saying. As it seems to me, the real thrust of the decisions is that even where the conduct of the police was regarded by the court as within the bounds of acceptable police procedures, nevertheless if there was a possibility that the offence might not have been committed had the police not in some way facilitated it, that might be regarded as a matter which diminished the culpability of the offender…The sentencing process is concerned with the level of culpability of the offender who, whether as a result of police incitement, inducement or encouragement or otherwise, embarks upon criminal conduct.

87. At 403, Clarke JA and Abadee J agreeing.

70. The appellant did not facilitate the respondents’ offending. What the appellant did, and what it was entitled to do, was investigate such offending which was, by its very nature, serious. Moreover, as Badgery-Parker J pointed out, the sentencing process is ultimately concerned with assessing the level of culpability of an offender who, irrespective of what investigative procedures may or may not have been adopted, embarks on criminal conduct.

71. Finally, her Honour was critical of the fact that the appellant acted in a clandestine fashion. The fact that serious offending is investigated by the use of clandestine methodology, so as not to alert the offender, is hardly surprising. It was not a matter which warranted criticism of the appellant.

72. It follows from all of these considerations that any suggestion that in investigating the offending, the appellant somehow acted improperly, and/or acted beyond the proper boundaries of its role, should be firmly rejected. No aspect of the appellant’s investigation diminished the culpability of either of the respondents, or otherwise mitigated their offending.

THE GROUNDS OF APPEAL

Ground 1 – The sentencing judge erred in finding that there was no failure in moral culpability on the part of the respondents arising from the circumstances of the offence

The reasons of the sentencing judge

73. The reasons of the sentencing judge which bear upon this ground of appeal have been set out above. [88]

SUBMISSIONS OF THE PARTIES

88. At [51]; [53].

Submissions of the appellant

74. Senior counsel for the appellant advanced a number of submissions in support of this ground. To begin with, it was submitted that in finding that the respondents’ breaches were “not substantial”, her Honour had characterised those breaches as amounting principally to a failure to keep proper records, accompanied by a failure to await the outcome of the proposed modification to the Part 3A approval. It was submitted that such characterisations were erroneous, and had distracted the sentencing judge from properly assessing the gravamen of the offending. Senior counsel submitted that the correct categorisation of the offending was the stockpiling, on Lot 8, of 24,000 to 44,000 tonnes of waste containing asbestos without:

1. the requisite authorisation or exemption; and

2. a development consent or other approval permitting waste related activities on that land.

75. It was submitted that in applying a principal focus to the respondents’ failure to keep records so as to comply with the relevant exemptions, her Honour had failed to properly recognise the gravamen of the offending, namely the use of Lot 8 as a waste facility without lawful authority. Senior counsel submitted that an accurate assessment of the gravamen of the offending required the sentencing judge to recognise that it involved:

1. bringing a significant quantity of waste containing asbestos onto Lot 8;

2. without authority;

3. over a period of 6½ months;

4. in circumstances where there was no environmental control over, or regulation of, that activity.

76. It was submitted that in doing so, both respondents had engaged in “cutting corners” in order to save money.

77. Senior counsel for the appellant further submitted that in criticising aspects of the regulatory scheme, her Honour had erred by failing in her duty to uphold and apply the law. It was submitted that regardless of any shortcomings within the scheme, it remained the responsibility of the first respondent, as a consumer, to understand and comply with its obligations. It was submitted that in focussing upon what she regarded as the “incoherent” nature of the scheme, her Honour had erred by adopting an incorrect and unjustified approach which had, in turn, adversely affected her assessment of the respondents’ moral culpability.

78. Senior counsel further submitted that her Honour’s finding that the first respondent was not aware that temporary stockpiling of material constituted disposal of waste on land ran contrary to the principle that ignorance of the law is no excuse. It was submitted that in this particular respect, the reasons of the sentencing judge reflected the application of an incorrect principle, and an incorrect approach to sentencing, both of which were directly relevant to her Honour’s finding that the respondents were morally blameless.

79. Finally, it was emphasised that the offending in each case centred upon the use of the land as a waste facility without lawful authority which had resulted in waste containing asbestos being disposed of, and stored, on Lot 8. It was submitted that this constituted an aspect of the harm caused, or likely to be caused, to the environment, which her Honour had failed to recognise and which had resulted in her Honour acting upon a wrong principle in a way which directly affected her assessment of the respondents’ moral culpability. It was submitted that this error was compounded by a further error in finding that the absence of environmental harm was a mitigating factor. It was submitted that it was a well-established principle of sentencing that the absence of a factor which would otherwise elevate the seriousness of offending was not to be regarded as a mitigating factor and that this amounted to a further error.

Submissions of the respondents

80. The primary submission of senior counsel for the respondents was that the appellant had failed to identify any error of principle on the part of the sentencing judge, or any finding made by her Honour that was not reasonably open. It was submitted that properly understood, the submissions advanced in support of this ground amounted to little more than the fact that the appellant had assessed the gravamen of the offending in a manner different to that of the sentencing judge. It was submitted that such a complaint was incapable of attracting appellate intervention.

81. Senior counsel for the respondents further submitted that the appellant’s complaint that the sentencing judge had placed undue emphasis on the nature of the scheme of exemptions amounted to no more than an expression of the appellant’s disagreement with the sentencing judge’s identification of the pitfalls of the scheme. It was submitted that the appellant had failed to demonstrate how any finding made by the sentencing judge concerning the regulatory scheme was factually or legally incorrect, or how it reflected in any form of appealable error.

82. As to the appellant’s complaint that the sentencing judge had applied an incorrect legal principle by relying on the “ignorance” of the respondents, it was submitted that there was no such error. Senior counsel submitted that whilst, a matter of principle, ignorance did not provide the respondents with a defence to the charge in either case, such ignorance remained a relevant matter to be taken into account in mitigation.

83. Finally, senior counsel submitted that the presence of asbestos in the material had not been brought about by the conduct of the respondents, and that the proposition that the sentencing judge had erred by treating the absence of that factor as a matter in mitigation was misconceived. It was submitted that such a proposition was directly contrary to s 21A(3)(a) of the Sentencing Act which expressly identifies, as a mitigating factor, the fact that the injury, loss or damage caused by the offence is not substantial, and mandates consideration of that factor. It was submitted that plainly, the absence of environmental harm fell within the ambit of matters which were required to be considered under that section.

CONSIDERATION

84. In the context of imposing a sentence for criminal offending, the term “moral culpability” refers to an offender’s general blameworthiness. In Paterson v R [89] the following was in said in respect of the notion of moral culpability, and its relationship to the objective seriousness of an offence:

[29] In relation to ground 1, it is necessary to address how the sentencing judge addressed the submissions of the parties concerning two separate but related concepts of importance to sentencing, namely the “objective seriousness” of an offence and the “moral culpability” of the offender. As its name implies, the former involves an objective assessment of the seriousness of the crime and the matters causally related to it. The latter is concerned with an offender’s moral blameworthiness for an offence. A determination of moral culpability can involve a consideration of a wider set of subjective factors affecting an offender than the former.

…

[31] An assessment of an offender’s moral culpability includes both a consideration of the objective seriousness of their offence but also extends to a consideration of some of their personal circumstances, including circumstances which may affect their capacity to reason, appreciate the full wrongfulness of their actions or control their conduct.

89. Paterson v R [2021] NSWCCA 273 at [29] – [30] citations omitted (Paterson).

85. Some of the submissions advanced on behalf of the appellant in support of this ground had a tendency to stray from its terms. For the purposes of considering this ground, and in determining whether error has been established, it is necessary to focus upon the finding(s) of the sentencing judge, and the factors which were relied upon to support those findings.

86. The principal finding of the sentencing judge relative to this ground was that there was no failure in moral culpability of either respondent. [90] Her Honour cited a number of factors in support of that finding.

    90. Sentence judgment at [250]; [293].

87. The first of those factors was what the sentencing judge referred to as “the complexity of the statutory waste scheme under the POEO Act and Waste Regulation for consumers”. [91] How this was said to bear upon the issue of moral culpability, and how it supported a conclusion that there was no failure in moral culpability on the part of either of the respondents, was not explained.

    91. Sentence judgment at [250].

88. Moreover, I am unable to accept that the relevant scheme was particularly complex. It involved a number of fundamental, and easily understood, concepts, including that:

1. waste disposal and storage were scheduled activities, the conduct of which required (in the absence of an exemption) authorisation in the form of a licence;

1. it was an offence to carry on such activities without such a licence;

2. it was open to a consumer to seek to rely upon one or other exemptions from the responsibility to have a licence;

3. in the present case, each of the relevant exemptions required the keeping of records, for a period of 3 years, specifying the quantity of the waste material received and the details of the processor who provided it.

89. Such a system does not, in my view, carry with it the attendant complexity to which her Honour referred. Indeed, as her Honour herself had earlier pointed out, the record keeping requirement imposed by the relevant exemptions was “readily understandable”. [92] There is a degree of displacement between that conclusion, and a conclusion that the scheme was complex.

    92. Sentence judgment at [200].

90. A further matter on which the sentencing judge relied to support her conclusion as to moral culpability was that the “legal and financial risks to consumers of the statutory scheme concerning the operations of the exemptions are substantial”. [93] Even if it is accepted that this was the case, her Honour did not explain how that circumstance bore on the issue of moral culpability, or, more specifically, how it operated to eliminate any degree of moral culpability on the part of the respondents altogether.

    93. Sentence judgment at [250].

91. In support of her conclusion as to moral culpability, the sentencing judge also relied upon her conclusion that it was “reasonable to describe the breaches giving rise to the offences as not substantial in the context of the regulatory scheme, namely the failure to keep records in Condition 9.1 of the CPRF exemption and Condition. 9.2 of the ENM exemption”. [94] For the reasons I have previously pointed out, the respondents were not charged with breaching a requirement to keep records. They were charged with using land as a waste facility without authority. That absence of authority came about because the first respondent did not have a licence for that purpose. The failure to keep records meant that the first respondent could not rely upon either of the relevant exemptions. In that (very tangential) sense, the failure of the respondents to keep records was relevant to the offending. However, irrespective of how it is viewed, that failure did not constitute the offending. Her Honour’s effective conclusion that it did was an error. It is clear that her Honour took that erroneous conclusion into account to support her finding as to moral culpability.

    94. Sentence judgment at [250].

92. In my view, that error lead to a further error, namely the conclusion that the offending was “not substantial”, which was similarly relied upon by her Honour to support the finding as to moral culpability. I accept that conclusions as to the objective seriousness of offending are regarded as conclusions which are quintessentially for a sentencing judge, and with which this Court will be reluctant to interfere. [95] The ultimate question will be whether or not the finding was open [96] and a lack of clarity in the findings of a sentencing judge may require this Court to make its own evaluation. [97] Leaving aside the identified errors which lead to it, the conclusion of the sentencing judge that the offending was not substantial is entirely at odds with the objective fact that it involved (inter alia) the use of the land as a waste facility over a period of almost 7 months, in the course of which between 24,000 and 44,000 tonnes of waste, in the form of both recovered fines and ENM, were deposited onto Lot 8, in circumstances where the entirety of those activities were carried out without any environmental or regulatory control of any kind.

    95. See Mulato v R [2006] NSWCCA 282 at [37] per Spigelman CJ and at [46] per Simpson J (as her Honour then was) (Mulato).

    96. Mulato at [37] per Spigelman CJ.

    97. Mulato at [46] per Simpson J.

93. The sentencing judge also found that there was no failure in the respondents’ moral culpability because “the failure to wait for approval for the modified access road under the Pt 3A approval which was obtained after the charge period (was) also fairly described as not a substantial breach”. How that issue was said to reduce the respondents’ moral culpability was not explained. It is necessary to emphasise that the respondents were not charged with a breach of anything to do with the Part 3A approval.

94. As I have pointed out, moral culpability is concerned with an offender’s moral blameworthiness for an offence. The sentencing judge failed to explain how those matters upon which she relied supported her finding that there was no failure in moral culpability on the part of either respondent. Some of the matters upon which her Honour relied were, for the reasons I have expressed, erroneous. It follows that I am satisfied that ground 1 is made out.

95. Error having been established, it is necessary for the Court to re-sentence the respondents, subject to the residual discretion not to intervene which I have considered below. It nevertheless remains appropriate that ground 2 be considered, given that it was a subject of full argument. As a re-sentencing exercise will be required, it is both unnecessary and undesirable to consider ground 3 which asserts that the sentence in each case was manifestly inadequate.

Ground 2 – The sentencing judge erred in finding that general deterrence had no role to play in the respondents’ sentences and/or that the respondents were not an appropriate vehicle for general deterrence

The findings of the sentencing judge

96. The findings of the sentencing judge relevant to this ground of appeal are set out above. [98] In reaching those findings, her Honour approached the issue of general deterrence in what might be described as a “global” way by simply referring to the “the [respondents]” without really distinguishing between them. For the reasons developed more fully below, that approach assumes some significance in the case of the second respondent.

SUBMISSIONS OF THE PARTIES

98. At [53].

Submissions of the appellant

97. Senior counsel for the appellant submitted that the conclusions of the sentencing judge as to the relevance of general deterrence reflected a series of errors.

98. First, it was submitted that her Honour had erred by failing to properly apply the relevant principles regarding general deterrence, and/or give proper effect to them. In this regard, senior counsel for the appellants emphasised the characteristics of the offending to which I have already referred and which, it was submitted, supported a conclusion that the objective seriousness of the offending was high.

99. Secondly, it was submitted that by storing the waste without a licence to do so, the respondents had acted in a way which undermined the statutory scheme, and that the sentencing judge had failed to take this into account when considering the issue of general deterrence.

100. Thirdly, it was submitted that the sentencing judge had taken into account an irrelevant consideration by making reference to recovered fines being deposited by other people in the same local municipality, in the absence of any action having been taken by the appellant.

Submissions of the respondents

101. Senior counsel for the respondents submitted that on a fair reading of the sentence judgment, the sentencing judge had not found that general deterrence had no role to play. It was submitted that when properly read, her Honour’s conclusions reflected the fact that, having acknowledged the role to be played by general deterrence in the sentencing process, her Honour had expressly (and properly) accepted a submission that a sentence which had regard to any significant element of general deterrence would result in the respondents shouldering an unfair burden of community education.

102. It was further submitted that her Honour had also properly accepted the submission that the case did not “present comfortably” as an appropriate vehicle for general deterrence because of the low moral culpability of the respondents, and what her Honour considered were the shortcomings in the regulatory scheme which had exposed them to liability. It was submitted that this did not equate to a finding that no component of the penalty imposed on the first respondent reflected general deterrence.

103. It was submitted that in all the circumstances, general deterrence was not ignored and that no error was established.

CONSIDERATION

104. It is appropriate to commence a consideration of this ground by setting out a number of fundamental principles.

105. To begin with, s 3A of the Sentencing Act states the purposes of sentencing. One of those stated purposes is: [99]

to prevent crime by deterring the offender and other persons from committing similar offences.

99. Section 3A(b).

106. That object reflects the position at common law as articulated by Street CJ in R v Rushby: [100]

… one of the main purposes of punishment… is to protect the public from the commission of such crimes by making it clear to the offender and to other persons with similar impulses that, if they yield to them, they will meet with severe punishment. In all civilised countries, in all ages, that has been the main purpose of punishment, and it still continues so. The fact that punishment does not entirely prevent all similar crimes should not obscure the cogent fact that the fear of severe punishment does, and will, prevent the commission of many offences that would have been committed if it was thought that the offender could escape without punishment, or with only a light punishment. If a Court is weakly merciful, and does not impose a sentence commensurate with the seriousness of the crime, it fails in its duty to see that the sentences are such as to operate as a powerful factor to prevent the commission of such offences. On the other hand, justice and humanity both require that the previous character and conduct, and probable future life and conduct of the individual offender, and the effect of the sentence on these, should also be given the most careful consideration, although this factor is necessarily subsidiarity to the main considerations that determine that appropriate amount of punishment.

100. (1977) 1 NSWLR 594 at 597 citing R v Radich [1954] NZLR 86.

107. Consistent with these observations, the following was said in Veen v The Queen(No.2): [101]

The purposes of criminal punishment are various: protection of society, deterrence of the offender, and of others who might be tempted to offend, retribution and reform (emphasis added).

101. (1988) 164 CLR 465; [1988] HCA 14 at 476 per Mason CJ, Brennan, Dawson and Toohey JJ.

108. In R v Miria [102] an issue arose from a comment made by a sentencing judge to the effect that the “general deterrent effect of any sentence is debatable”. Grove J said the following: [103]

     102. [2009] NSWCCA 68.

     103. At [11] – [15], Blanch and Latham JJ agreeing.

[11] It is true that the remark by [the sentencing judge] concerning debatability has precedent but there is no authority permitting a judge to dismiss general deterrence as a factor for sentence assessment. Of course, in circumstances which are found to be appropriate a particular offender may not be a suitable vehicle for manifesting general deterrence, for example if a mental condition disables the offender from appreciating the level of his wrongdoing: cf R v Scognamiglio [1991] 56 A Crim R 81. Nothing attracting that kind of consideration was suggested to be the case in this instance.

[12] The respondent relied upon the opening words of Spigelman CJ in an extract from R v Wong & Leung [1999] NSWCCA 420; (1999) 48 NSWLR 340 where his Honour said (at 363):

“There are significant differences of opinion as to the deterrent effect of sentences, particularly, the deterrent effect of marginal changes in sentence. Nevertheless, the fact that penalties operate as a deterrent is a structural assumption of our criminal justice system. Legislation would be required to change the traditional approach of the courts to this matter.”

[13] Although the remarks of [the sentencing judge] echoed the initial observation of the Chief Justice, he did not heed the important qualification which recognized the legal imperative to include general deterrence in sentence assessment.

[14] In fact, as the Crown submissions observe, legislation has been passed subsequent to that statement and by its mandate it has resolved the debate so far as this State is concerned by declaring that a purpose for which sentence may be imposed is specifically “to prevent crime by deterring the offender and other persons from committing similar offences”: Crimes (Sentencing Procedure) Act 1999 s 3A(b).

[15] The Crown’s submission that his Honour erred in this regard should be sustained (emphasis added in each case).

109. It has been expressly recognised that principles of general deterrence form an important aspect of sentencing in environmental crime. For example, in Bentley v BGP Properties Pty Limited [104] Preston CJ said the following:

[139] The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed.

[140] This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines.

104. (2006) 145 LGERA 234; [2006] NSWLEC 34 at [139] – [140] (citations omitted).

110. Bearing in mind these general principles, I turn to the conclusions of the sentencing judge.

111. Her Honour’s ultimate conclusion was that she “agreed” with the submissions advanced on behalf of the respondents as to general deterrence. [105] Those submissions encapsulated the following propositions, which her Honour obviously accepted:

     105. Sentence judgment at [295] set out at [53] above.

1. the present case did not present comfortably as an appropriate vehicle for general deterrence because of the first respondent’s low moral culpability and because of the incoherent regulatory scheme that exposed it to liability;

2. the subjective case of each respondent was strong;

3. the objective seriousness of the offending was low; and

4. the frequency with which recovered fines were deposited, both in the location of Lot 8 and generally, without action by the appellant suggested that any significant element or portion of any fine referable to general deterrence would run contrary to the decision in Walden v Hensler. [106]

   106. (1987) 163 CLR 561; [1987] HCA 54.

112. For the reasons that follow, her Honour’s findings reflect a number of errors.

113. To begin with, her Honour’s acceptance of the submission, and thus her apparent finding, that the present case did not “present comfortably as an appropriate vehicle for general deterrence” can only be construed as a finding that general deterrence had no role to play at all in the case of either respondent. At least in the case of the first respondent, that finding runs entirely contrary to one of the express purposes of sentencing set out in s 3A(b) of the Sentencing Act. It also runs contrary to the authorities to which I have referred.

114. Further, for the reasons I have previously set out, her Honour’s conclusion that the objective seriousness of the offending was low, was an error. Even if that were not the case, and her Honour’s categorisation of the offending was correct, it did not lead to the conclusion (again, at least in the case of the first respondent) that general deterrence had no role to play at all.

115. Further, and for the reasons set out in my consideration of ground 1, her Honour’s conclusion as to the absence of moral culpability on the part of the respondents was an error. It is apparent that her Honour used that erroneous conclusion to support her conclusions as to general deterrence.

116. Similarly, and again for the reasons I have set out, I do not accept that the regulatory scheme was properly regarded as “incoherent”. That factor was also relied upon to support the conclusion that general deterrence was not a relevant factor on sentence. At least in the case of the first respondent, that was an error.

117. Further in my view, at least in the case of the first respondent, her Honour erred in concluding that incorporating any element of general deterrence into any penalty to be imposed would be contrary to the decision in Walden. Walden was a prosecution for an offence contrary to s 54 of the Fauna Conservation Act 1974 (Qld) which prohibited the keeping of fauna by person who was not licenced to do so. Section 22 of the Criminal Code Act 1899 (Qld) provided that ignorance of the law did not afford any excuse for an act or omission which would otherwise constitute an offence, unless (inter alia) knowledge of the law by the offender was expressly declared to be an element of the offence. The full passage of the judgment of Brennan J (as his Honour then was) to which her Honour referred was in the following terms: [107]

The chief purpose of the criminal law is to deter those who are tempted to breach its provisions. If that purpose were limited to providing immediate deterrence, the first paragraph of s 22 would cast the net of criminal liability too widely, for the prescription of a penalty for engaging in prohibited conduct cannot deter a person who is about to engage in that conduct and does not know that the conduct attracts a penalty. Nevertheless, the width of the first paragraph works no injustice when the law prescribes a penalty for conduct which is generally regarded as offensive or otherwise immoral and deserving of punishment. There is no injustice in punishing a murderer who is unfamiliar with the law of homicide provided, of course, he is of sound mind when he commits the crime. But when a law proscribes conduct which an ordinary person without special knowledge of the law might engage in in the honest belief that he is lawfully entitled to do so, the secondary deterrent purpose — that is, the purpose of educating both the offender and the community in the law's proscriptions so that the law will come to be known and obeyed — must be invoked to justify the imposition of a penalty for breach. In such a case, care must be taken in imposing a penalty lest the offender be made to shoulder an unfair burden of community education. The second paragraph of s 22 restricts the net of criminal responsibility and avoids the real risk of injustice which would arise if the first paragraph of s 22 were applied to offences relating to property (emphasis added).

107. At p569 – 570.

118. Properly understood, this passage provides no support for her Honour’s conclusion that the circumstances of the case against the first respondent did not present comfortably as an appropriate vehicle for general deterrence. [108] On the contrary, Brennan J made express reference to the necessity to invoke what he described as the “secondary deterrent purpose”, namely the purpose of “educating both the offender and the community in the law’s proscriptions so that the law will come to be known and obeyed”. His Honour’s reference to the need for care when invoking that principle, so as to ensure that an offender is not left to shoulder an unfair burden of community education, should not be construed as incorporating, much less endorsing, the proposition which her Honour apparently accepted, namely that the “secondary deterrent purpose” had no role to play in the case of the first respondent at all.

     108. Sentence judgment at [293] set out at [53] above.

119. For these reasons, and insofar as her Honour found that general deterrence had no role to play in determining the sentence against the first respondent, error has been established and ground 2 is made out.

120. However, I have come to a different conclusion in terms of the applicability of principles of general deterrence in the case of the second respondent. The reasons for that conclusion are set out below. [109]

     109. At [135]; [139].

THE RESIDUAL DISCRETION

121. As I have previously observed, [110] even if error is established the appellant must satisfy this Court that the residual discretion to decline to intervene and re-sentence the respondents should not be exercised. There was no delay in bringing the appeal, and nothing said or done by the appellant on sentence contributed to the errors I have found, that were made by the sentencing judge. There is no reason why this Court should decline to intervene and re-exercise the sentencing discretion. That is particularly so in the case of the first respondent whose sentence was, in my view, so manifestly inadequate that, absent intervention by this Court, there is a risk that public confidence in the criminal justice system will be undermined.

     110. At [13] above.

122. Whilst there is obviously a great deal of commonality between the first and second respondents, it is important to exercise the sentencing discretion individually. To “group” them together would reflect an error in approach.

RE-SENTENCE

The first respondent

123. For the reasons I have already set out, it is necessary, in determining the question of objective seriousness, to focus upon the actual offending which was committed. The first respondent’s offending was that it used Lot 8 as a waste facility without lawful authority. Three matters of particular significance emerge.

124. The first, is that such use extended for a significant period of time, from about 29 October 2012 to about 15 May 2013. It follows that the offending was not fleeting.

125. The second, is that the amount of waste which was deposited on Lot 8 within that period was somewhere between 24,000 and 44,000 tonnes. As senior counsel for the appellant pointed out in the course of submissions, depositing that amount of waste, at a rate of 25 tonnes per load, meant that during the period of the offending there were somewhere between 960 and 1760 deliveries of waste made to Lot 8.

126. The third, is that these activities were carried out absent any form of environmental or regulatory control.

127. For the reasons I have already articulated, and subject to any subjective considerations, any sentence imposed in relation to environmental offence must have regard to considerations of general deterrence. [111] In the case of the first respondent, there are no factors which dilute the application of that principle in any way. This was not simply a case of the first respondent failing to keep records. The actions of the first respondent in permitting a significant amount of waste to be deposited on Lot 8 over a long period of time without first applying for, and obtaining, the necessary licence, or without complying with the obligations necessary to obtain an exemption, necessarily undermine the objectives of both the relevant regulatory scheme, as well as the legislative objectives of the offence itself. [112]

     111. See Bentley at [50] above; see also Axer Pty Ltd v Environmental Planning Authority (1993) 113 LGERA 357 at 359 (per Mahoney JA) and at 367 (per Badgery-Parker J).

     112. Environment Protection Authority v Hanna [2010] NSWLEC 98 at [38] – [39] cited in Environment Protection Authority v Geoff Robinson Pty Limited; Environment Protection Authority v Robinson [2011] NSWLEC 14.

128. The state of mind of an offender is relevant to determining the objective seriousness of an offence for the purposes of sentencing. An offence committed deliberately will be regarded as objectively more serious than one where the offence resulted from an accident. [113] There is no evidence that the first respondent deliberately went about the use of Lot 8 as a waste facility in the knowledge that it was committing an offence. In that sense, the offending should not be regarded as deliberate. I also accept that the first respondent is of prior good character and that it has, through the second respondent, expressed remorse.

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

129. It is necessary to specifically consider, in determining sentence, the provisions of s 241(1) of the POEO Act, which are in the following terms:

Matters to be considered in imposing penalty

(1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant)--

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

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

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

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

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

(f) the presence of asbestos in the environment.

(2) The court may take into consideration other matters that it considers relevant.

130. I am satisfied on the evidence that the first respondent had considerable control over the circumstances that gave rise to the offending. [114] However, the evidence does not establish that any harm was caused, or likely to be caused, to Lot 8 by the commission of the offence. [115] Although there were traces of asbestos in the waste, there is no evidence that this came to the attention of the first respondent, in circumstances where the processors were required to provide appropriate certifications to consumers.

     114. Section 241(1)(d).

     115. Section 241(1)(a), (b) and (c).

131. There is, in my view, a fundamental requirement that any sentence imposed on the first respondent ensures that it is adequately punished for the offence it committed, that it is held accountable for its actions, and that its conduct is denounced in a manner which is proportionate to the level of objective seriousness of the offending that I have assessed. [116] Whilst I accept that the payment of a prosecutor’s costs in a matter of this nature constitutes an aspect of punishment, [117] it is imperative that an actual financial penalty, in the form of a substantial fine, be imposed upon the first respondent to reflect the various matters to which I have referred. As Preston CJ pointed out in Bentley, the need for general deterrence in the context of the commission of environmental offences will not be met by the imposition of a nominal fine. Such a need will most certainly not be met when no fine is imposed at all.

     116. Environment Protection Authority v Custom Chemicals Pty Ltd [2016] NSWLEC 146 at [110] cited in Environment Protection Authority v Edward Gilder [2018] NSWLEC 119 at [179].

     117. EPA v Barnes [2006] NSWCCA 246 at [78].

132. In proposing the orders set out below, I have proceeded on the basis, as was made clear in the course of the hearing before this Court, that the orders requiring the first respondent to pay the legal and investigation costs of the appellant were not challenged. Those orders should therefore be confirmed.

The second respondent

133. The observations I have already made regarding the objective seriousness of the offending of the first respondent are equally applicable in the case of the second respondent, as is my assessment of the factors under s 241(1) of the POEO Act.

134. In terms of the second respondent’s subjective case, all of the principal findings made by the sentencing judge [118] are supported by the evidence and I adopt them for the purposes of re-sentence.

     118. Set out at [55] above.

135. The finding that the second respondent was diagnosed with a major depressive disorder after being charged with the offence is particularly important. The unchallenged evidence of Dr Allnutt is that such a condition is chronic, and that it originated from the fact of being charged for the offending. [119] The condition diagnosed by Dr Allnutt was of sufficient severity for him to take the step of referring the second respondent to an available mental health services with a recommendation that he engage with a psychologist at fortnightly intervals for a period of up to 12 months, and a psychiatrist, initially at weekly intervals, for a similar period. [120]

     119. AB 2072.

     120. AB 2072-2073.

136. Section 10(1)(a) of the Sentencing Act confers power on the Court to (inter alia) order, without proceeding to a conviction, that a charge against a person be dismissed. In determining whether that course should be taken, the Court must have regard to: [121]

     121. Section 10(3).

1. the person’s character, antecedents, age, health and mental condition;   

2. the trivial nature of the offence;

3. the extenuating circumstances in which the offence was committed; and

4. any other matter that the court considers proper to consider.

137. For the reasons I have stated, the offending was not trivial. That said, there is authority for the proposition that a conclusion that offending is trivial is not a pre-requisite to the application of s 10(1)(a) of the Sentencing Act. [122]

     122. See Chin v Ryde City Council [2004] NSWCCA 16; [2004] 133 LGERA 312 at [38]; Terrey v Department of Environment, Climate Change and Water [2011] NSWLEC 141; R v Piccin (No. 2) [2001] NSWCCA 323.

138. It is common ground that the second respondent is a person of no prior convictions. Moreover, there is unchallenged evidence of his positive good character and contributions to the community. [123] Given that the second respondent is now 53 years of age, his positive good character is of particular significance, having been earned over a long period of time. There is also evidence of the extra-curial punishment which he has suffered. [124]

     123. Sentence judgment at [104]; [120] – [124].

     124. Sentence judgment at [102].

139. I have already made reference to the evidence of the second respondent’s mental state. That is of particular significance because, unlike the first respondent, it does render the second respondent an inappropriate vehicle for general deterrence. [125] That serves as an important distinction between the two cases. There is no evidence to suggest that specific deterrence is a relevant consideration in the case of the second respondent. In fact, the evidence tends entirely to the contrary.

     125. Director of Public Prosecutions (DPP) (Cth) v De La Rosa (2010) 79 NSWLR 1; [2010] NSWCCA 194 at [177].

140. I am mindful of the repeated statements made by this Court which emphasise that there must be reasonable proportionality between any sentence and the objective gravity of offending, and that an offender’s subjective case, no matter how powerful, must not be permitted to result in a sentencing outcome which fails to reflect such gravity. [126] However, taking into account the entirety of the circumstances to which I have referred, I am persuaded that the charge against the second respondent should be dismissed pursuant to s 10(1)(a) of the Sentencing Act.

     126. See Edwards v R [2021] NSWCCA 57 at [65] per Bellew J (Payne JA and Button J agreeing) and the authorities cited therein.

141. The error which was identified in ground 1 has lead to the necessity to engage in a fresh exercise of the sentencing discretion. Having done so, I have come to the same conclusion as the sentencing judge in respect of the disposition of the charge against the second respondent. In those circumstances, the appropriate order in the case of the second respondent is simply that the appeal be dismissed.

ORDERS

142. In respect of the appeal brought against Grafil Pty Ltd I propose the following orders:

1. The appeal is allowed.

2. The first respondent, Grafil Pty Ltd, is fined the sum of $100,000.00.

3. The orders of the sentencing judge in respect of the conviction of Grafil Pty Limited, and the payment by Grafil Pty Limited of 25% of the appellant's legal costs of the proceedings as agreed or assessed, and the payment of 25% of the appellant’s investigation costs, being a sum of $46,772.00, are confirmed.

143. In respect of the appeal brought against Robert Bruce Mackenzie, I propose the following order:

1. The appeal is dismissed.

144. HAMILL J: I agree with Bellew J.

Endnotes

Decision last updated: 09 December 2022