Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 4)

[2021] NSWLEC 123

Land and Environment Court

New South Wales

Medium Neutral Citation:

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

Hearing dates:

2-6, 10 August 2021; 30, 31 August 2021 (written submissions)

Date of orders:

05 November 2021

Decision date:

05 November 2021

Jurisdiction:

Class 5

Before:

Pain J

Decision:

See [360]-[361]

Catchwords:

CRIMINAL – sentencing of company for offence of operation of waste facility without approval – defendant company a consumer of recovered fines created pursuant to resource recovery exemptions made under Protection of the Environment Operations (Waste) Regulation 2005 – unable to rely on recovered fines exemption from requirement to have environment protection licence for waste facility due to failure to comply with conditions imposed on consumer – recovered fines contained asbestos of which it had no knowledge – no moral culpability arising from circumstances of offence – subjective circumstances considered – cap and contain order made

CRIMINAL – sentencing of individual defendant for offence of operation of waste facility without approval – guilt by operation of special executive liability – no moral culpability arising from circumstances of the offence – substantial extenuating circumstances – application of s 10(1)(a) of Crimes Sentencing Procedure Act 1999

Legislation Cited:

Batch Process Recovered Fines Exemption 2010

Contaminated Land Management Act 1997 (NSW)

Continuous Process Recovered Fines Exemption 2010

Crimes (Sentencing Procedure) Act 1999 (NSW) ss 3A, 10, 21A, 23

Criminal Procedure Act 1986 (NSW) ss 257B, 257G, former 253, Ch 4 Pt 5 Div 4

Excavated Natural Material Exemption 2012

National Environment Protection (Assessment of Site Contamination Measure) 1999 (Cth) Sch B1

Protection of the Environment Operations (Waste) Regulation 2005 (NSW) cll 3B, 39, 42, 51, 51A

Protection of the Environment Operations Act 1997 (NSW) ss 3, 5, 48, 120, 142A, 143, 144, 169, 191, 216, 241, 245, 248, 250, 286, Sch 1, Dictionary, Pt 8.3, (former Pt 3A)

Waste Avoidance and Resource Recovery Act 2001 (NSW)

Cases Cited:

Aslan v R [2014] NSWCCA 114

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

Bankstown City Council v Hanna (2014) 205 LGERA 39; [2014] NSWLEC 152

BulgaUnderground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37

Calderbank v Calderbank [1975] 3 All ER 333

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

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

Chief Executive, Office of Environment and Heritage v Merriman [2018] NSWLEC 96

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

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

Environment Protection Authority v Abbas [2021] NSWLEC 57

Environment Protection Authority v Ashmore [2014] NSWLEC 136

Environment Protection Authority v Barnes [2006] NSWCCA 246

Environment Protection Authority v Foxman Environmental Development Services (No 2) [2016] NSWLEC 120

Environment Protection Authority v Gilder [2018] NSWLEC 119

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 Pty Ltd; Environment Protection Authority v Mackenzie (No 3) [2020] NSWLEC 90

Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 2) [2019] NSWCCA 202

Environment Protection Authority v Laison [2015] NSWLEC 89

Environment Protection Authority v Mouawad (No 2) [2020] NSWLEC 166

Environment Protection Authority v N (1992) 26 NSWLR 352

Environment Protection Authority v Rixa Quarries (No.2) Pty Ltd (No 2) [2017] NSWLEC 93

Environment Protection Authority v Robinson [2004] NSWLEC 629

Environment Protection Authority v Robinson [2011] NSWLEC 14

Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299; [2006] NSWLEC 419

Garrett v Freeman (No 5) (2009) 164 LGERA 287; [2009] NSWLEC 1

Garrett v Williams (2006) 160 LGERA 115; [2006] NSWLEC 785

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

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

Hunter Quarriers Pty Ltd v Morrison (2017) 96 NSWLR 658; [2017] NSWCCA 326

Kenny v R [2010] NSWCCA 6

Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59

Lim Chin Aik v The Queen [1963] AC 160

Magaming v The Queen (2013) 252 CLR 381; [2013] HCA 40

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

Maxwell v The Queen (1996) 184 CLR 501; [1996] HCA 46

Milne v Attorney-General for the State of Tasmania (1956) 95 CLR 460; [1956] HCA 48

Morrison v Defence Maritime Services Pty Ltd (2007) 156 LGERA 365; [2007] NSWLEC 552

Moseley v Queanbeyan-Palerang Regional Council (No 2) [2017] NSWLEC 52

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

Newcastle City Council v Pace Farm Egg Products Pty Limited (No 3) [2005] NSWLEC 423

R v Anderson [1981] VR 155

R v Donald [2013] NSWCCA 238

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

R v Paris [2001] NSWCCA 83

R v Peel [1971] 1 NSWLR 247

R v Taouk (1992) 65 A Crim R 387

R v Visconti [1982] 2 NSWLR 104

R v Wran [2016] NSWSC 1015

R v Wright (2013) 229 A Crim R 245; [2013] NSWCCA 82

Silvano v The Queen (2008) 184 A Crim R 593; [2008] NSWCCA 118

Thorneloe v Filipowksi (2001) 52 NSWLR 60; [2001] NSWCCA 213

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

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

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

Texts Cited:

ANZECC September 1999, Guidelines for the Assessment of On-Site Containment of Contaminated Soil and the National Environment Protection (Assessment of Site Contamination) Measure 1999

ANZECC, Australian and New Zealand Guidelines for Fresh and Marine Quality Water (August 2018)

ANZG, Water Quality Guidelines - Accounting for Local Conditions (accessed 27 July 2021)

Australian and New Zealand Guidelines for Fresh and Marine Water Quality – Default Guidelines for Toxicants, default guideline values for arsenic, cadmium, chromium (CrIII), chromium (CrVI), copper, lead, mercury, nickel and zinc (accessed 27 July 2021)

NSW Department of Environment and Conservation, Guidelines for the Assessment and Management of Groundwater Contamination (March 2007)

NSW EPA Contaminated Land Management: Guidelines for the NSW Site Auditor Scheme (3rd ed, 2017)

NSW Judicial Commission Sentencing Bench Book (as at 28 October 2021)

Solid Waste Landfill Guidelines (2nd ed, 2016)

Western Australian Department of Health, Guidelines for the Remediation and Management of Asbestos-Contaminated Sites in Western Australia (May 2009)

Category:

Sentence

Parties:

Proceedings 2016/157886
Environment Protection Authority (Prosecutor)
Grafil Pty Ltd (Defendant)

Proceedings 2016/157995
Environment Protection Authority (Prosecutor)
Robert Mackenzie (Defendant)

Representation:

Counsel:
P English (Prosecutor)
T Howard SC and C Ireland (Defendants)

Solicitors:
Environment Protection Authority (Prosecutor)
Johnson Winter & Slattery (Defendants)

File Number(s):

2016/157886, 2016/157995

TABLE OF CONTENTS

Crimes Sentencing Procedure Act 1999

Objective circumstances

Protection of the Environment Operations Act 1997

Protection of the Environment Operations (Waste) Regulation 2005

Waste Avoidance and Resource Recovery Act 2001

Resource recovery exemptions

Excavated Natural Material exemption 2012 extract

Continuous Process Recovered Fines exemption 2010

Summary of Grafil No 1

Summary of Grafil CCA

Material in the stockpiles was “waste” as defined, questions 2, 5

Activity was the scheduled activity of waste disposal (application to land), questions 3, 4

Activity was the scheduled activity of waste storage, questions 6, 7

Activity was not exempt, questions 1, 8, 11, 12

Legal consequence of the presence of asbestos in the material, questions 9, 10

Activity without lawful authority of a development consent, question 15

A continuing offence proved, question 13

Offences not time barred, question 14

Summary of Grafil No 3

Particular facts relied on by Defendants for sentencing hearing

Documentary evidence relied on by the Defendants from Grafil No 1

Additional evidence on sentence

EPA

Affidavit of Mr Matthews

Defendants

Affidavit of Mr Mackenzie

Mr Mackenzie oral evidence

Affidavit of Mr Hannam

Character references for Mr Mackenzie

Affidavit of Dr Allnutt

Hydrological evidence

Evidence of Dr Martens

Evidence of Mr Lau

Oral evidence of Dr Martens and Mr Lau

Hydrological evidence on surface and groundwater contamination

Presence of asbestos

Cap and contain remediation strategy

Statutory scheme for recovered fines problematic in application to consumers

(i) Asbestos and the operation of the recovered fines exemptions

Source of asbestos

Defendants’ submissions

EPA’s submissions

Prosecutor’s submissions on practical matters relating to asbestos and recovered fines

Consideration of asbestos and recovered fines

(ii) Compliance with certain conditions of the exemptions by consumer

Defendants’ submissions

EPA’s submissions

Consideration of compliance with conditions of the exemptions by consumer

(iii) Record keeping requirements of the exemptions

Defendants’ submissions

EPA’s submissions

Consideration of record keeping requirements of exemptions

(iv) Deemed disposal of waste

Defendants’ submissions

Consideration of deemed disposal of waste

Consideration of the statutory scheme for recovered fines

Nature of offence

State of mind

Reasons for offence

Consideration

Maximum penalty

Factors in s 241(1) Protection of the Environment Operations Act 1997

Extent of environmental harm caused or likely to be caused, s 241(1)(a)

Practical measures that may be taken to prevent or mitigate harm, s 241(1)(b)

Foreseeability of harm by the defendant, s 241(1)(c)

Control over causes of the offence, s 241(1)(d)

Complying with orders, s 241(1)(e)

Presence of asbestos in the environment, s 241(1)(f)

Finding on objective seriousness

Application of s 10(1)(a) Crimes Sentencing Procedure Act 1999

Mr Mackenzie’s submissions on s 10(1)(a) order

Character and antecedents of the defendant, s 10(3)(a)

Trivial nature of the offence, s 10(3)(b)

Extenuating circumstances, s 10(3)(c)

Any other matters appropriate to consider, s 10(3)(d)

EPA’s submissions on s 10(1)(a) order

Consideration of s 10(1)(a) order

Extra-curial punishment

Subjective considerations for Grafil

Injury, loss or damage caused by offence not substantial, s 21A(3)(a)

Prior convictions, s 21A(3)(e)

Good character, s 21A(3)(f)

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

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

Sentencing principles

Deterrence

Even-handedness/parity

Further orders under Pt 8.3 of the POEO Act

Cap and contain order, s 245

Publication order, s 250(1)(a)

Legal costs

Defendants’ submissions on legal costs

Apportionment of costs of these proceedings

EPA’s submissions on legal costs

Legal principles

Application of the legal principles

Trial and remitter

Sentence

Finding on legal costs

Investigation costs

Defendants’ legal costs

Conclusion on penalty for Grafil

Orders

Proceedings 2016/157886 - Environment Protection Authority v Grafil Pty Ltd

Proceedings 2016/157995 - Environment Protection Authority v Mackenzie

Judgment

1. The Defendant Grafil Pty Ltd (Grafil) has been charged with an offence under s 144(1) of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) of using land it occupies at Salt Ash in the Port Stephens local government area (LGA) being Lot 8 DP 833768 (Lot 8) as a waste facility without an environment protection licence (EPL). One of its directors Mr Robert Mackenzie was also charged under the special executive liability provision in s 169(1) of the POEO Act. The charge period was 29 October 2012 to 15 May 2013. After a four-week trial the Defendants were found not guilty in Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie [2018] NSWLEC 99 (“Grafil No 1”). A stated case by the Environment Protection Authority (EPA) to the Court of Criminal Appeal (CCA) resulted in legal findings in Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (2019) 101 NSWLR 245; [2019] NSWCCA 174 (“Grafil CCA”) with the consequence that the Defendants were found guilty of the offences on remitter from the CCA: Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 3) [2020] NSWLEC 90 (“Grafil No 3”). Mr Mackenzie was found guilty by virtue of the operation of s 169(1) because Grafil was guilty. The matters are now before the Court again for sentencing.

2. The offences are strict liability and therefore none of the elements of the offences have a mens rea element. When sentencing, any matter adverse to a defendant must be proved by a prosecutor beyond reasonable doubt, R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at 281 (“R v Olbrich”). Any contested matter relied on by a defendant must be established on the balance of probabilities, R v Olbrich at 281.

Crimes Sentencing Procedure Act1999

3. Relevant sections of the Crimes (Sentencing Procedure) Act 1999 (NSW) (CSP Act) state:

Part 1 Preliminary

…

3A   Purposes of sentencing

The purposes for which a court may impose a sentence on an offender are as follows—

(a) to ensure that the offender is adequately punished for the offence,

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

(c) to protect the community from the offender,

(d) to promote the rehabilitation of the offender,

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

(f) to denounce the conduct of the offender,

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

…

Part 2 Penalties that may be imposed

…

Division 3 Non-custodial alternatives

10   Dismissal of charges and conditional discharge of offender

(1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders—

(a) an order directing that the relevant charge be dismissed,

(b) an order discharging the person under a conditional release order (in which case the court proceeds to make a conditional release order under section 9),

(c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program.

…

(3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors—

(a) the person’s character, antecedents, age, health and mental condition,

(b) the trivial nature of the offence,

(c) the extenuating circumstances in which the offence was committed,

(d) any other matter that the court thinks proper to consider.

4. The sentence must reflect all the relevant objective circumstances of the offence and subjective circumstances of a defendant: Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 at 490 (Jacobs J) and Veen v The Queen(No 2) (1988) 164 CLR 465; [1988] HCA 14 (“Veen No 2”) at 472-473 (Mason CJ, Brennan, Dawson and Toohey JJ), 490-491 (Deane J). The sentence should not exceed what is justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances: Veen No 2 at 472, 485-486, 490-491, 496 and Hoare v The Queen (1989) 167 CLR 348; [1989] HCA 33 (“Hoare”) at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).

5. The CSP Act (in particular, Pt 3 Div 1) contains provisions relevant to sentencing procedures. Section 21A of the CSP Act sets out aggravating (subs (2)), mitigating (subs (3)) and other factors to be taken into account in sentencing. In identifying the relevant objective circumstances, s 241(1) of the POEO Act identifies the factors to be taken into consideration in imposing a penalty for offences committed under that Act (so far as they are relevant).

Objective circumstances

6. A number of matters must be considered in determining the objective circumstances of these offences. Detailed consideration of the legal regime for waste management under the POEO Act and the (former) Protection of the Environment Operations (Waste) Regulation 2005 (NSW) (Waste Regulation) for building and demolition material, considered during the four-week trial on liability in Grafil No 1 and in Grafil CCA, is necessary to address the significant issues that arise from the operation of that scheme in the circumstances of the Defendants relevant to sentencing. It is therefore necessary to set out again that statutory regime in large part and consider parts of Grafil No 1 at length, the findings in Grafil CCA and the findings in Grafil No 3.

Protection of the Environment Operations Act 1997

7. All references to legislation are to the version in force during the charge period as follows:

Chapter 1 Preliminary

…

3 Objects of Act

The objects of this Act are as follows:

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

…

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

(i)  pollution prevention and cleaner production,

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

(iia)  the elimination of harmful wastes,

(iii)  the reduction in the use of materials and the re-use, recovery or recycling of materials,

(iv)  the making of progressive environmental improvements, including the reduction of pollution at source,

(v)  the monitoring and reporting of environmental quality on a regular basis,

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

…

(g)  to assist in the achievement of the objectives of the Waste Avoidance and Resource Recovery Act 2001.

…

5 Scheduled activities

(1) Listing of activities

The activities listed in Schedule 1 are scheduled activities for the purposes of this Act.

…

Chapter 3 Environment protection licences

Part 3.1 Introduction

…

48 Licensing requirement—scheduled activities (premises-based)

(1) Application of section

This section applies to scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on.

(2) Offence

A person who is the occupier of any premises at which any such scheduled activity is carried on is guilty of an offence, unless the person is, at the time that activity is carried on, the holder of a licence that authorises that activity to be carried on at those premises.

Maximum penalty:

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

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

…

Chapter 5 Environment protection offence

…

Part 5.6 Land pollution and waste

…

Division 3 Waste offences

143 Unlawful transporting or depositing of waste

(1) Offence

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

(a) the person, and

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

are each guilty of an offence.

…

(2) Proof of lawfulness

In any proceedings for an offence under this section the defendant bears the onus of proving that the place to which the waste was transported can lawfully be used as a waste facility for that waste.

…

144 Use of land as waste facility without lawful authority

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

Maximum penalty:

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

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

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

…

Part 5.9 General offences

…

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

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

(a) (Repealed)

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

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

(1A) For the purposes of this section, each of the following provisions attract special executive liability:

…

(p) section 144 (1),

…

8. I note that the charge period was 29 October 2012 to 15 May 2013. The above version of s 169 was in force from 11 January 2013 to 30 May 2013 and therefore covered the latter part of the charge period. Two other versions of s 169 were in force from 31 March 2012 to 31 December 2012 and 1 January 2013 to 10 January 2013 covering the earlier part of the charge period. The differences between those versions does not have any material impact on this matter and are not therefore set out.

9. Another relevant section of the POEO Act follows:

Chapter 9 Miscellaneous

Part 9.1 Exemptions

…

286 Exemptions by regulation

(1) The regulations may exempt, or provide for the exemption of:

(a) any person or class of persons, or

(b) any premises or class of premises, or

(c) any area or class of areas, or

(d) any activity or class of activities, or

(e) any other matter or thing or class of matters or things,

from any specified provision or provisions of this Act or the regulations, in such circumstances (if any) and subject to such conditions (if any) as may be specified or referred to in the regulations.

…

10. By reference to the Dictionary of the POEO Act, the terms “waste” and “waste facility” are defined as follows:

In this Act:

…

waste includes:

(a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or

(b) any discarded, rejected, unwanted, surplus or abandoned substance, or

(c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, processing, recovery or purification by a separate operation from that which produced the substance, or

(d) any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations, or

(e) any substance prescribed by the regulations to be waste.

A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered.

waste facility means any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations).

11. Schedule 1 of the POEO Act provides:

Schedule 1 Scheduled activities

Part 1 Premises-based activities

1 Application of Part

(1) 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 (the activity is premises-based).

…

39 Waste disposal (application to land)

(1) This clause applies to waste disposal by application to land, meaning the application to land of waste received from off site, including (but not limited to) application by any of the following methods:

(a) spraying, spreading or depositing on the land,

(b) ploughing, injecting or mixing into the land,

(c) filling, raising, reclaiming or contouring the land.

(2) However, this clause does not apply to an activity that involves any of the following:

(a) sites inside the regulated area that, over any period of time, receive from off site a total of no more than 200 tonnes of the following waste (and no other waste):

(i) building and demolition waste only,

(ii) building and demolition waste mixed with virgin excavated natural material,

...

(3) The activity to which this clause applies is declared to be a scheduled activity.

(4) For the purposes of this clause, 1 litre of waste is taken to weigh 1 kilogram.

…

42 Waste storage

(1) This clause applies to waste storage, meaning the receiving from off site and storing (including storage for transfer) of waste.

(2) However, this clause does not apply to any of the following:

(a) the storage of stormwater,

(b) the storage of up to 60 tonnes at any time of grease trap waste, waste lead acid batteries or waste oil collected for recovery (but not when accompanied by any other kind of waste),

(c) the storage of sewage within a sewage treatment system,

(d) the storage and transfer of liquid waste that is generated and treated on site prior to sewer discharge, or lawful discharge to waters.

(3) The activity to which this clause applies is declared to be a scheduled activity if:

(a) more than 5 tonnes of hazardous waste, restricted solid waste, liquid waste, clinical or related waste or asbestos waste is stored on the premises at any time, or

(b) more than 50 tonnes of waste tyres or 5,000 waste tyres is stored on the premises at any time, or

(c) more than 2,500 tonnes or 2,500 cubic metres, whichever is the lesser, of waste (other than waste referred to in paragraph (a) or (b)) is stored on the premises at any time, or

(d) more than 30,000 tonnes of waste (other than waste referred to in paragraph (a) or (b)) is received per year from off site.

(4) For the purposes of this clause, 1 litre of waste is taken to weigh 1 kilogram.

…

Part 3 Definitions

Division 1 Waste classifications

49 Definitions of waste classifications

(1) In this Schedule:

…

special waste means any of the following:

(a) clinical and related waste,

(b) asbestos waste,

(c) waste tyres,

(d) anything that is classified as special waste pursuant to an EPA Gazettal notice.

…

Division 2 Other definitions

50 Other definitions

(1) In this Schedule:

…

asbestos means the fibrous form of those mineral silicates that belong to the serpentine or amphibole groups of rock-forming minerals, including actinolite, amosite (brown asbestos), anthophyllite, chrysotile (white asbestos), crocidolite (blue asbestos) and tremolite.

asbestos waste means any waste that contains asbestos.

…

12. I recorded in Grafil No 1 the EPA submitted that by virtue of ss 5(1) and 48 of the POEO Act and cll 39 and 42 of Sch 1 to the POEO Act, “waste disposal” (application to land) and “waste storage” are scheduled activities for which an EPL is required for any premises at which those activities are carried on.

13. Salt Ash is located in the Port Stephens LGA. The Port Stephens LGA is listed as a “regulated area” in Sch 1 to the POEO Act.

Protection of the Environment Operations (Waste) Regulation 2005

14. Clause 3B of the Waste Regulation prescribes the following for the purpose of par (d) of the definition of “waste” in the Dictionary of the POEO Act set out above:

Part 1 Preliminary

…

3B Definition of “waste”

(1) For the purposes of paragraph (d) of the definition of waste in the Dictionary to the Act, the following circumstances are prescribed:

(a) in relation to substances that are applied to land, the application to land by:

(i) spraying, spreading or depositing on the land, or

(ii) ploughing, injecting or mixing into the land, or

(iii) filling, raising, reclaiming or contouring the land,

(b) in relation to substances that are used as fuel, all circumstances.

(2) Subclause (1) (a) does not apply where the substances concerned are either bulk agricultural crop materials or manure.

…

15. Other relevant clauses of the Waste Regulation provide:

Part 4 Management of special wastes

42 Special requirements relating to asbestos waste

(1) This clause applies to any activity that involves the transportation, disposal, re-use or recycling of any type of asbestos waste, regardless of whether the activity is required to be licensed.

(2) A person who carries on an activity to which this clause applies must comply with the requirements specified in this clause in relation to the activity concerned.

Maximum penalty: 400 penalty units in the case of a corporation, 200 penalty units in the case of an individual.

…

(4) The requirements relating to the off site disposal of asbestos waste are as follows:

(a) asbestos waste in any form must be disposed of only at a landfill site that may lawfully receive the waste,

…

(5) A person must not cause or permit asbestos waste in any form to be re-used or recycled.

(6) In this clause:

bonded asbestos material means any material (other than friable asbestos material) that contains asbestos.

friable asbestos material means any material that contains asbestos and is in the form of a powder or can be crumbled, pulverised or reduced to powder by hand pressure when dry.

…

Part 6 Miscellaneous

…

51 General provisions relating to exemptions

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

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

(a) any person or class of persons, or

(b) any premises or class of premises, or

(c) any area or class of areas, or

(d) any activity or class of activities, or

(e) any other matter or thing or class of matters or things.

(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.

…

(6) An exemption under this clause is subject to such conditions as may be imposed by the EPA.

(7) In giving an exemption under this clause, the EPA may, in relation to a general exemption, and must, in relation to a specific exemption, identify a person (or class of persons) to whom the exemption relates (the responsible person).

(8) A general exemption may be amended or revoked by the EPA by way of notice published in the Gazette.

…

(10) If an exemption is given under this clause for which a responsible person is identified, the responsible person must comply with the conditions to which the exemption is subject.

Maximum penalty: 400 penalty units in the case of a corporation, 200 penalty units in the case of an individual.

51A Exemptions relating to certain waste

(1) This clause applies to:

(a) waste that is waste by virtue of paragraph (d) of the definition of waste in the Dictionary to the Act, and

(b) any other waste that is used in connection with a process of thermal treatment, and

(c) coal washery rejects (within the meaning of Part 2).

(2) The EPA may from time to time grant an exemption under clause 51 that exempts a person or class of persons from any one or more of the following provisions in relation to an activity or class of activities relating to waste to which this clause applies:

(a) the provisions of sections 47–49 and 88 of the Act,

(b) the provisions of Schedule 1 to the Act, either in total or as they apply to a particular type of activity,

(c) the provisions of Part 3 and clauses 45 and 47 of this Regulation.

…

Waste Avoidance and Resource Recovery Act 2001

16. Relevant sections of the Waste Avoidance and Resource Recovery Act 2001 (NSW) (WARR Act) are extracted in Grafil No 1 at [19]. The WARR Act is aimed at avoiding waste by facilitating re-use and recycling. The Defendants referred to the following three waste strategy documents created under the WARR Act, identified in Grafil No 1 at [21]-[23].

17. The Waste Avoidance and Resource Recovery Strategy 2003 (Ex 35 in Grafil No 1) was developed by Resource NSW to reduce waste generated and increase use of renewable and recovered resources. It identified that products and materials commonly called “waste” by the community must be seen as resources that can be reused (pp 1, 7). A diagram of “key parts” in the materials recovery system identified disposal facility operators, material re-processors and re-users, transporters, consumers (individuals, households, businesses, state and local government), inter alia (p 59).

18. The NSW Waste Avoidance Resource Recovery Strategy 2007 (Ex 36 in Grafil No 1) updated the waste strategy document published in 2003. It identified the need for a supportive policy and regulatory framework to enable exemptions for waste materials used as fuel or applied to land and that industry should be provided with regulatory certainty (pp 33-34). The document identified that contamination of demolition waste with asbestos was an was an issue driving reduced construction waste recycling (p 43).

19. The Waste Avoidance and Resource Recovery Strategy Progress Report 2012-13 (Ex 37 in Grafil No 1) identified that the regulatory framework for waste was under the POEO Act, WARR Act and the Waste Regulation (p 28).

Resource recovery exemptions

20. Resource recovery exemptions have been gazetted by the EPA under cl 51 and cl 51A of the Waste Regulation. These exemptions were promulgated by the EPA under the Waste Regulation to implement the objects of the WARR Act, see Grafil No 1 at [313]. The exemptions apply to exempt a class of persons from obligations under the POEO Act, including a requirement to hold an EPL for an activity identified in Sch 1, such as storage of more than 2,500 tonnes or 2,500 m³ of waste, whichever is the lesser. Three resource recovery exemptions were referred to in Grafil No 1 and are set out therein at [16]-[18]. Two exemptions in force in the charge period, the Excavated Natural Material (ENM) Exemption 2012 (ENM exemption) and the Continuous Process Recovered Fines (CPRF) Exemption 2010 (CPRF exemption), are the most relevant to the facts and submissions in this sentencing hearing. The Batch Process Recovered Fines (BPRF) Exemption 2010 (BPRF exemption) need not be referred to in this judgment as it has no application to the circumstances of the offences. To understand the issues on sentence the CPRF exemption is set out again in full and the ENM exemption in part.

Excavated Natural Material exemption 2012 extract

21. Relevant extracts of the ENM exemption are set out below (the notes to the ENM exemption being omitted):

PROTECTION OF THE ENVIRONMENT OPERATIONS (WASTE) REGULATION 2005 - GENERAL EXEMPTION UNDER PART 6, CLAUSE 51 AND 51A

The Excavated Natural Material Exemption 2012

Name

1. This exemption is to be known as “The excavated natural material exemption 2012”.

Commencement

2. This exemption commences on 19 October 2012. “The excavated natural material exemption 2008” which commenced 25 July 2008 is revoked from 19 October 2012.

Duration

3. This exemption is valid until revoked by the Environment Protection Authority (EPA) by notice published in the New South Wales Government Gazette.

Legislation

4. Under the Protection of the Environment Operations (Waste) Regulation 2005 (the Regulation):

4.1. Clause 51 (2) authorises the EPA to grant an exemption in relation to any matter or thing including an activity or class of activities, and

4.2. Clause 51A authorises the EPA to exempt a person from any of the following provisions in relation to an activity or class of activities relating to certain waste that is to be land applied or used as a fuel:

• the provisions of sections 47 to 49 and 88 of the Protection of the Environment Operations Act 1997 (the Act),

• the provisions of Schedule 1 to the Act, either in total or as they apply to a particular activity, and

• the provisions of Part 3 and clauses 45 and 47 of the Regulation.

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

Column 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

This Notice of Exemption is a general exemption for the purposes of clause 51(3) of the Regulation.

Definitions

6. In this Notice of Exemption:

Bgl means below ground level, referring to soil at depth beneath the ground surface.

Characterisation means sampling and testing that must be conducted on the material for the range of chemicals and other attributes listed in Column 1 of Table 2.

Composite sample means a sample that combines 5 sub-samples of equal size into a single sample for the purpose of analysis.

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.

Discrete sample means a sample collected and analysed individually that will not be composited.

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.

Excavated natural material does not include material located in a hotspot; that has been processed; or that contains asbestos, Acid Sulfate Soils (ASS), Potential Acid Sulfate soils (PASS) or sulfidic ores.

Generator means a person who generates excavated natural material for supply to a consumer.

Hotspot means a cylindrical volume which extends through the soil profile from the ground surface to the proposed depth of excavation, where the level of any contaminant listed in Column 1 of Table 2 is greater than the absolute maximum concentration in Column 3 of Table  2.

In situ material means material that exists on or below the ground level. It does not include stockpiled material.

In situ sampling means sampling undertaken on in situ material.

Relevant waste means excavated natural material that meets the requirements of Section 7.

Stockpiled material means material that has been excavated from the ground and temporarily stored on the ground prior to use.

Systematic sampling means sampling at points that are selected at even intervals and are statistically unbiased.

Validation means ensuring that test results comply with the conditions of this exemption prior to material being supplied to a consumer.

General conditions

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

7.1. The chemical concentration or other attribute of the excavated natural material listed in Column 1 of Table 2 must not exceed any of the following:

7.1.1. For characterisation tests, the maximum average (based on the arithmetic mean) concentration or value listed in Column 2 of Table 2, and

7.1.2. The absolute maximum concentration or value listed in Column 3 of Table 2.

7.2. The excavated natural material can only be applied to land as engineering fill or used in earthworks.

Generator responsibilities

8. The following conditions must be met by the generator for this exemption to apply:

8.1. The generator must prepare a written sampling plan which includes information on sample preparation and storage. The plan must be kept for a period of three years;

8.2. The generator must undertake sampling and analysis of the material for Acid Sulfate Soil (ASS) and Potential Acid Sulfate Soil (PASS), in accordance with the NSW Acid Sulfate Soil Manual, Acid Sulfate Soils Management Advisory Council, 1998 and the updated Laboratory Methods Guidelines version 2.1 - June 2004 where:

8.2.1. the pH measured in the material is below 5, and/or

8.2.2. the review of the applicable Acid Sulfate Soil Risk Maps (published by the former Department of Land and Water Conservation and available at htm) indicates the potential presence of Acid Sulfate Soils (ASS).

8.3. For stockpiled material, the generator must:

8.3.1. undertake sampling in accordance with Australian Standard 1141.3.1-1996 Methods for sampling and testing aggregates — Sampling - Aggregates (or equivalent);

8.3.2. undertake characterisation according to the requirements listed in Columns 1 and 2 of Table 3 for the range of chemicals and other attributes listed in Column 1 of Table 2; and

8.3.3. store the excavated natural material appropriately until the characterisation test results are validated (i.e. obtained and assessed as compliant with this exemption).

8.4. For in situ material, the generator must:

8.4.1. undertake characterisation for the range of chemicals and other attributes listed in Column 1 of Table 2 according to the requirements listed in Columns 1, 2, and 3 of Table 4. When the ground surface is not comprised of soil (e.g. concrete slab), samples must be taken at the depth at which the soil commences.

8.4.2. undertake sampling at depth according to Column 1 of Table 5.

8.4.3. collect additional soil samples (and analyse them for the range of chemicals and other attributes listed in Column 1 of Table 2), at any depth exhibiting discolouration, staining, odour or other indicators of contamination inconsistent with soil samples collected at the depth intervals indicated in Table 5.

8.4.4. segregate and exclude hotspots identified in accordance with Table 4, from material excavated for reuse under this exemption.

8.5. For both stockpiled and in situ material the generator must:

8.5.1. keep a written record of all characterisation test results, volume of excavated material, and detected hotspot material for a period of three years; and

8.5.2. provide a written statement of compliance to the consumer with each transaction, certifying that the excavated natural material complies with the relevant conditions of this exemption.

Consumer responsibilities

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

9.1. The consumer must ensure that the excavated natural material is fit for purpose and poses minimal risk of harm to human health or the environment.

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.

9.[3] The consumer must land apply the relevant waste within a reasonable period of time.

Chemical and other material property requirements

10. This Notice of Exemption only applies to excavated natural material where the chemical and other attributes listed in Column 1 of Table 2 comply with the chemical concentrations and other values listed in Column 2 and Column 3 of Table 2, when analysed according to test methods specified in Column 4 of Table 2.

…

Sampling requirements

11. This Notice of Exemption only applies to excavated natural material sampled according to the requirements in Tables 3, 4 and 5.

11.1. Stockpiled excavated natural material must be sampled as per the requirements in Table 3.

11.1.1.   Composite sampling must be undertaken for analysis of attributes 1 to 10 and 18 in Column 1 of Table 2. Discrete sampling must be undertaken for analysis of attributes 11 to 17 in Column 1 of Table 2.

11.1.2.   Sampling must be undertaken in a manner that ensures all parts of the stockpile are equally accessible for representative sampling.

11.1.[3] For stockpiles greater than 4,000 tonnes the number of samples described in Table 3 must be repeated.

Table 3

Sampling of Stockpiled Material
Column 1 Quantity (tonnes)	Column 2 Number of samples	Column 3 Validation
<500	3	Required
500-1,000	4
1,000-2,000	5
2,000-3,000	7
3,000-4,000	10

11.2. In situ material must be sampled by collecting discrete samples as per the requirements of Tables 4 and 5.

11.2.1. Sites larger than 50,000 m² should be subdivided into smaller areas and sampled as per Table 4.

…

Test method

12. All testing must be undertaken by analytical laboratories accredited by the National Association of Testing Authorities (NATA), or equivalent. All chemicals and other attributes listed in Column 1 of Table 2 must be measured in accordance with the test methods specified below:

…

[Notes omitted]

Continuous Process Recovered Fines exemption 2010

22. The CPRF exemption is set out below in full:

PROTECTION OF THE ENVIRONMENT OPERATIONS (WASTE) REGULATION 2005 - GENERAL EXEMPTION UNDER PART 6, CLAUSE 51 AND 51A

The “continuous process” recovered fines exemption September 2010

Name

1. This exemption is to be known as “The `continuous process’ recovered fines exemption September 2010”.

Commencement

2. This exemption commences on 13 September 2010. “The `continuous process’ recovered fines exemption April 2010” which commenced 1 April 2010 is revoked from 13 September 2010.

Duration

3. This exemption is valid until revoked by the Environment Protection Authority (EPA) by notice published in the Government Gazette.

Legislation

4. Under the Protection of the Environment Operations (Waste) Regulation 2005 (the Regulation):

4.1. Clause 51 authorises the EPA to grant an exemption in relation to any matter or thing including an activity or class of activities, and

4.2. Clause 51A authorises the EPA to exempt a person or class of persons from any of the following provisions in relation to an activity or class of activities relating to certain waste that is to be land applied or used as a fuel:

• the provisions of sections 47 to 49 and 88 of the Protection of the Environment Operations Act 1997 (the Act),

• the provisions of Schedule 1 to the Act, either in total or as they apply to a particular activity, and

• the provisions of Part 3 and clauses 45 and 47 of the Regulation.

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 only where the responsible person complies with the conditions referred to in Column 3 of the table.

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

Column 1	Column 2	Column 3
Responsible person	Provisions from which the responsible person is exempt	Conditions to be met by the responsible person
Processor	section 48 of the Act in respect of clause 39 of Schedule 1 to the Act	all requirements specified in section 7, 8, 10 and 11
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 7,9,10 and 11

This Notice of Exemption is a general exemption for the purposes of clause 51(3) of the Regulation.

Definitions

6. In this Notice of Exemption:

Characterisation means sampling and testing that must be conducted on the “continuous process” recovered fines for the range of chemicals and other attributes listed in Column 1 of Table 2.

“Continuous process” recovered fines means a soil or sand substitute with a typical particle size of less than 9.5 mm that is derived from the processing of mixed construction and demolition waste including residues from the processing of skip bin waste.

Composite sample means a sample that combines 5 discrete sub-samples into a single sample for the purpose of analysis.

Consumer means a person who applies, causes, or permits the application to land of “continuous process” recovered fines within the definitions of “application to land” in accordance with the Act. The consumer may be the landholder responsible for the land to which recovered fines are applied.

Processor means a person who processes, mixes, blends, or otherwise incorporates “continuous process” recovered fines into a material for supply to a consumer.

Relevant waste means “continuous process” recovered fines that meet the requirements of Section 7.

Routine sampling means sampling and testing that must be conducted on the “continuous process” recovered fines on an ongoing and regular basis.

Validation means ensuring that test results comply with the conditions of this exemption prior to supply to a consumer or another processor who does not blend or alter the nature of the “continuous process” recovered fines.

General conditions

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

7.1. The chemical concentration or other attribute of the “continuous process” recovered fines listed in Column 1 of Table 2 must not exceed any of the following:

7.1.1. the absolute maximum concentration or other value listed in Column 4 of Table 2,

7.1.2. for characterisation tests, the maximum average (based on the arithmetic mean) concentration or other value listed in Column 2 of Table 2, and

7.1.3. for routine tests, the maximum average (based on the arithmetic mean) concentration or other value listed in Column 3 of Table 2.

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:

7.2.1. Construction of dams or related water storage infrastructure,

7.2.2. Mine site rehabilitation,

7.2.3. Quarry rehabilitation,

7.2.4. Sand dredge pond rehabilitation,

7.2.5. Back-filling of quarry voids,

7.2.6. Raising or reshaping of land used for agricultural purposes, and

7.2.7. Construction of roads on private land unless:

(a) the relevant waste is applied to land to the minimum extent necessary for the construction of a road, and

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

(c) it is to provide access (temporary or permanent) to a development approved by a Council, or

(d) the works undertaken are either exempt or complying development.

Processor responsibilities

8. The following conditions must be met by the processor for this exemption to apply:

8.1. Sampling must be undertaken in accordance with Australian Standard 1141 Methods for sampling and testing aggregates (or equivalent). Sampling and information on sample storage and preparation must be detailed in a written sampling plan. A record of weekly sampling times and other operational information should be kept on-site.

8.2. The “continuous process” recovered fines must be sampled according to the requirements listed Column 1 and Column 2 of Table 3.

8.3. Where there is a change in inputs that is likely to affect the properties of the “continuous process” recovered fines, characterisation must be repeated. Blending of any materials into “continuous process” recovered fines after sampling as required in Table 3 would be regarded as a change in inputs.

8.4. Characterisation samples can be used for routine testing and subsequent calculations.

8.5. Processors must keep a written record of all characterisation and routine test results for a period of three years.

8.6. Records of the quantity of “continuous process” recovered fines supplied to the consumer and either the consumer's name and address or the registration details of the vehicle used to transport the “continuous process” recovered fines, must be kept for a period of three years.

8.7. The processor of “continuous process” recovered fines must provide a written statement of compliance to the consumer with each transaction, certifying that the “continuous process” recovered fines complies with the relevant conditions of this exemption.

8.8. The processor of “continuous process” recovered fines must make information on the latest characterisation and routine test results available to the consumer or the EPA upon request.

8.9. The processor of “continuous process” recovered fines must use due diligence to ensure that the relevant waste is utilised in applications that are consistent with the conditions of this exemption.

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.

9.2. The relevant waste must not be applied in or beneath water including groundwater.

9.3. The consumer must land apply the relevant waste within a reasonable period of time.

Chemical and other material property requirements

10. This Notice of Exemption only applies to “continuous process” recovered fines where the chemical and other attributes listed in Column 1 of Table 2 comply with the chemical concentrations and other values listed in Column 2, Column 3 and Column 4 of Table 2, when analysed according to test methods specified in Column 5 of Table 2.

Table 2

Column 1	Column 2	Column 3	Column 4	Column 5
Chemicals and other attributes	Maximum average concentration for characterisation (mg/kg “dry weight” unless otherwise specified)	Maximum average concentration for routine testing (mg/kg “dry weight” unless otherwise specified)	Absolute maximum concentration (mg/kg “dry weight” unless otherwise specified)	Test method specified within Section
1. Mercury	0.5	No testing required	1.5	12.1
2. Cadmium	0.5	No testing required	1.5	12.2
3. Lead	100	100	250	12.2
4. Arsenic	20	No testing required	40	12.2
5. Chromium (total)	60	60	150	12.2
6. Copper	70	70	200	12.2
7. Nickel	40	No testing required	80	12.2
8. Zinc	250	250	600	12.2
9. Total Organic Carbon	5%	No testing required	10%	12.3
10. Electrical Conductivity	2.5 dS/m	2.5 dS/m	3.5 dS/m	12.4
11. pH*	7.5-9	7.5-9	7.0-10	12.4
12. Total Polycyclic Aromatic Hydrocarbons (PAHs)	20	No testing required	80	12.5
13. Benzo(a)pyrene	1	No testing required	6	12.5
14. Total Petroleum Hydrocarbons (TPHs) C6-C9	80	No testing required	150	12.6
15. Total Petroleum Hydrocarbons (TPHs) C10-C36	800	No testing required	1600	12.6
16. Individual Chlorinated Hydrocarbons	Not applicable	No testing required	1	12.7
17. Individual Organochlorine Pesticides	Not applicable	No testing required	1	12.8
18. Individual Polychlorinated Biphenyls (PCBs)	Not applicable	No testing required	1	12.9
19. Glass, metal and rigid plastics	0.1%	0.1%	0.3%	12.10
20. Plastics – light flexible film	0.05	0.05%	0.1%	12.10
21. Proportion (by weight) retained on a 0.425 mm sieve	80%	No testing required	90%	12.11
22. Proportion (by weight) retained on a 9.5 mm sieve	Not applicable	No testing required	5%	12.11
23. Proportion (by weight) retained on a 26.5 mm sieve	Not applicable	No testing required	0%	12.11

*Note: The ranges given for pH are for the minimum and maximum acceptable pH values in the “continuous process” recovered fines.

Sampling and testing requirements

11. This Notice of Exemption only applies to “continuous process” recovered fines sampled according to the requirements in Table 3.

Table 3

Column 1	Column 2	Column 3	Column 4
Characterisation frequency	Routine sampling frequency	Once off sampling frequency	Validation
One composite sample per fortnight.	One composite sample to be collected each week. 5 composite samples to be collected in a 5 week period for assessing “Maximum average concentrations” (in Table 2, Column 3).	Not applicable.	Not required.

Test methods

12. All testing must be undertaken by analytical laboratories accredited by the National Association of Testing Authorities, or equivalent. All chemicals and other attributes listed in Column 1 of Table 2 must be measured in accordance with the test methods specified below:

12.1. Test methods for measuring the mercury concentration in “continuous process” recovered fines:

12.1.1 Particle size reduction & sample splitting may be required.

12.1.2 USEPA SW-846 Method 7471B Mercury in solid or semisolid waste (manual cold vapour technique), or an equivalent analytical method with a detection limit < 20% of the stated absolute maximum concentration in Table 2, Column 4 (i.e. 0.3 mg/kg dry weight).

12.1.3 Report as mg/kg dry weight.

12.2. Test methods for measuring chemicals 2-8 in “continuous process” recovered fines:

12.2.1 Particle size reduction & sample splitting may be required.

12.2.2 Sample preparation by digestion using USEPA SW-846 Method 3051A Microwave assisted acid digestion of sediments, sludges, soils, and oils (or an equivalent analytical method).

12.2.3 Analysis using USEPA SW-846 Method 6010C Inductively coupled plasma - atomic emission spectrometry, or an equivalent analytical method with a detection limit < 10% of the stated absolute maximum concentration in Table 2, Column 4 (i.e. 25 mg/kg dry weight for lead).

12.2.4 Report as mg/kg dry weight.

12.3. Test methods for measuring the total organic carbon content in “continuous process” recovered fines:

12.3.1   Method 105 (Organic Carbon). In Schedule B (3): Guideline on Laboratory Analysis of Potentially Contaminated Soils, National Environment Protection (Assessment of Site Contamination) Measure 1999 (or an equivalent analytical method).

12.3.2   Reporting as % total organic carbon.

12.4. Test methods for measuring the electrical conductivity and pH in “continuous process” recovered fines:

12.4.1   Sample preparation by mixing 1 part recovered fines with 5 parts distilled water.

12.4.2   Analysis using Method 103 (pH) and 104 (Electrical Conductivity). In Schedule B (3): Guideline on Laboratory Analysis of Potentially Contaminated Soils, National Environment Protection (Assessment of Site Contamination) Measure 1999 (or an equivalent analytical method).

12.4.3   Report electrical conductivity in deciSiemens per metre (dS/m).

12.5. Test method for measuring PAHs and benzo(a)pyrene in “continuous process” recovered fines:

12.5.1 Analysis using USEPA SW-846 Method 8100 Polynuclear aromatic hydrocarbons (or an equivalent analytical method).

12.5.2 Calculate the sum of all 16 PAHs for total PAHs.

12.5.3 Report total PAHs as mg/kg dry weight.

12.5.4 Report benzo(a)pyrene as mg/kg.

12.6. Test method for measuring TPHs in “continuous process” recovered fines:

12.6.1.   Method 506 (Petroleum Hydrocarbons). In Schedule B (3): Guideline on Laboratory Analysis of Potentially Contaminated Soils, National Environment Protection (Assessment of Site Contamination) Measure 1999 (or an equivalent analytical method).

12.6.2.   Report C6 – C9 as mg/kg.

12.6.3.   Report C10 – C36 as mg/kg.

12.7. Test methods for measuring chlorinated hydrocarbons in “continuous process” recovered fines:

12.7.1. Analysis using USEPA SW-846 Method 8021B Aromatic and halogenated volatiles by gas chromatography using photoionization and/or electrolytic conductivity detectors (or an equivalent analytical method).

12.7.2. Measure the following chlorinated hydrocarbons: carbon tetrachloride, chlorobenzene, chloroform, 1,2-dichlorobenzene, 1,4-dichlorobenzene, 1,2-dichloroethane, 1,1-dichloroethene, 1,2-dichlorothene, dichloromethane (methylene chloride), 1,1,1,2-tetrachloroethane, 1,1,2,2-tetrachloroethane, 1,2,4-trichlorobenzene, 1,1,1-trichloroethane, 1,1,2-trichloroethane, trichloroethene, vinyl chloride and hexachlorobutadiene concentrations.

12.7.3. Report individual listed chlorinated hydrocarbons as mg/kg.

12.8. Test methods for measuring organochlorine pesticides in “continuous process” recovered fines:

12.8.1. Analysis using USEPA SW-846 Method 808IB Organochlorine pesticides by gas chromatography (or an equivalent analytical method).

12.8.2. Measure the following organochlorine pesticides: aldrin, alpha BHC, beta BHC, gamma BHC (lindane), delta BHC, chlordane, DDT, DDD, DDE, dieldrin, endrin, endrin aldehyde, heptachlor, heptachlor epoxide, hexachlorobenzene, methoxychlor and endosulfan (includes endosulfan I, endosulfan II and endosulfan sulphate).

12.8.3. Report individual listed organochlorine pesticides as mg/kg.

12.9. Test methods for measuring the PCBs in “continuous process” recovered fines:

12.9.1.   USEPA SW-846 Method 8082A Polychlorinated Biphenyls (PCBs) by gas chromatography (or an equivalent analytical method).

12.9.2. Measure the following PCBs: Aroclor 1016 (CAS Registry No. 12674-11-2), Aroclor 1221 (CAS Registry No. 11104-28-2), Aroclor 1232 (CAS Registry No. 11141-16-5), Aroclor 1242 (CAS Registry No. 53469-21-9), Aroclor 1248 (CAS Registry No. 12672-29-6), Aroclor 1254 (CAS Registry No. 11097-69-1), Aroclor 1260 (CAS Registry No. 11096-82-5).

12.9.3. Report individual listed PCBs as mg/kg.

12.10. Test method for measuring 19-20 in “continuous process” recovered fines:

12.10.1. NSW Roads & Traffic Authority Test Method T276 Foreign Materials Content of Recycled Crushed Concrete (or an equivalent method), using a 2.36 mm sieve.

12.10.2. Report as %.

12.11. Test method for measuring 21-23 in “continuous process” recovered fines:

12.11.1. NSW Roads & Traffic Authority Test Method T106 Coarse particle distribution in road construction materials (by dry sieving) and T107 Fine particle distribution in road construction materials (or an equivalent method).

12.11.2. Report as %.

Exemption Granted

Mark Gorta,

Manager, Waste Management Section

Environment Protection Authority

by delegation

Notes

The EPA may amend or revoke this exemption at any time. It is the responsibility of the generator, processor and consumer to ensure that they comply with all relevant requirements of the most current exemption. The current version of an exemption will be available on the EPA website: gazetting this general exemption, the EPA is exempting the relevant waste from the specific requirements of the Act and Regulations as stated in this exemption. The EPA is not in any way endorsing the use of this substance or guaranteeing that the substance will confer benefit.

The use of exempted material remains subject to other relevant environmental regulations within the Act and Regulations. For example, a person who pollutes land (s142A) or water (s120), or does not meet the special requirements for asbestos waste (clause 42), regardless of having an exemption, is guilty of an offence and subject to prosecution.

For the purposes of arrangements between a generator, a processor and a consumer, a “transaction” is taken to mean the contractual agreement between the two parties which specifies the exchange of waste material from one party to another. A “statement of compliance” must be in writing and be provided with each transaction.

The conditions set out in this exemption are designed to minimise the risk of potential harm to the environment, human health or agriculture, however, neither this exemption nor these conditions guarantee that the environment, human health or agriculture will not be harmed.

The consumer should assess whether or not the exempted material is fit for the purpose the material is proposed to be used and whether this use will cause harm. The consumer may need to seek expert engineering or technical advice.

This exemption does not apply to any material received at a premises that is required to be licensed for waste disposal (application to land) activities under the provisions of the Act. This exemption does not remove the need for a site at which processing occurs to be licensed, if required under Schedule 1 of the Act.

This exemption does not alter the requirements of any other relevant legislation that must be met in utilising this material, including for example, the need to prepare a Material Safety Data Sheet (MSDS).

Regardless of any exemption provided by the EPA, the person who causes or permits the application of the substance to land must ensure that the action is lawful and consistent with the development consent requirements of the land.

All records required to be kept under this exemption must be made available to authorised officers of the EPA upon request.

Failure to comply with the conditions of this Notice of Exemption may constitute an offence under clause 51 of the Regulation and the responsible person will be required to comply with the normal regulatory provisions.

Summary of Grafil No 1

23. In Grafil No 1 the liability of Grafil under s 144(1) of the POEO Act for use of land as a waste facility without an EPL was in issue over a four-week hearing. The three elements of the charge are set out at [3]-[5]. Grafil admitted the first element, that it was the occupier of Lot 8. The second element is that Grafil used Lot 8 as a waste facility. Third, that the use of Lot 8 as a waste facility was without lawful authority. The extensive evidence relied on by the EPA to prove the offence beyond reasonable doubt was set out at [25]-[233]. The list of 24 affidavits read by the EPA is at [27].

24. Additional documents were tendered in relation to the development history of Grafil’s sand mining operations together with an affidavit of Mr Holm Department of Planning NSW officer and Mr Wickham Port Stephens Council (the Council) officer. The development history of Grafil’s sand mining operations was set out at [28]-[38].

25. The affidavit of Mr Jamieson EPA officer was read and summarised at [39]-[46] concerning Grafil’s dealings with the EPA and the Council from 2009 to March 2013.

26. The EPA’s investigation of Grafil on Lot 8 through carrying out Operation Trojan is summarised at [48]-[61]. Operation Trojan commenced about October 2012 and involved following trucks from various recycling centres in Sydney to ascertain where outgoing material was being sent. EPA officers conducted surveillance from adjoining bushland at the rear of Lot 8 on 12, 15, 27, 28 November 2012 and 7, 8 and 9 May 2013. The EPA disclosed images obtained from two static cameras placed outside Lot 8 dated 13 and 14 May 2013.

27. The search and seizure operation by various EPA officers on Lot 8 on 15 May 2013 is described at [62]-[84]. Documents were seized from Grafil’s office as set out at [85]-[89]. A verbal and written clean-up notice was issued to Grafil, at [90]-[91]. Mr Mackenzie’s accountant’s office was also the subject of a search and seizure operation on 15 May 2013. No documents from that operation were before the Court, at [92]. A search and seizure operation was also carried out at Bingo Group’s (Bingo) premises on the same day, according to the affidavit and cross-examination of Mr Wade investigator with the Office of Environment and Heritage, further details about which are at [94]-[98].

28. Interviews carried out by various EPA officers between 15 November 2013 to 11 September 2015 are identified at [99]-[101]. Five transporters, Mr Gilder of Bulk Logistics Pty Ltd (Bulk Logistics), Mr Sneddon of AH & PJ Sneddon Bulk Haulage Pty Ltd (Sneddons), Mr Maddox of Maddox Haulage Pty Ltd (Maddox), Mr Mulligan of Mullown Pty Ltd (Mullown) and Mr Papworth of BD & RA Papworth Pty Ltd (Papworth) were interviewed by various EPA officers. Six processors, Mr Ryan, Mr Sarkis and Mr Butler of Bingo, Mr Foxman of Botany Building Recyclers Pty Ltd (BBR) (in liquidation), Mr Scarlis of KLF Holdings Pty Ltd (KLF) and Mr Ulizzi of Aussie Skips (NSW) Pty Ltd (Aussie Skips) were interviewed by various EPA officers. Mr Robert Mackenzie was interviewed twice by EPA officers. Mr Bruce Mackenzie his father was interviewed once by EPA officers.

29. Section 191 notices under the POEO Act to obtain records and information were issued to several transport companies, being Maddox, Bulk Logistics, Sneddons, Papworth and Mullown, as identified at [102]-[106]. Two affidavits of transporters Mr Mulligan of Mullown and Mr Sneddon of Sneddons were set out at [107]-[120] attesting to obtaining material from Aussie Skips and other processors. Records of interview with Mr Gilder of Bulk Logistics, Mr Maddox of Maddox and Mr Papworth of Papworth are summarised at [121]-[130]. These affidavits and records of interview detailed how the transporters had drivers collect material from nominated processors and take it to Lot 8. Delivery of the same material to other sites in Salt Ash and around the Hunter region for the purpose of building roads is also identified, including at [114], [131].

30. Other sites including the Mortimer property in Salt Ash (at [52]), Mr Hufnagl’s property in Salt Ash (at [114]), Mr Mulligan’s property in Millers Point (at [114]), Mr Sansom’s property at Salt Ash (at [114]), other unspecified locations other than Lot 8 around the Hunter region (at [131]), the Newcastle area generally (at [176], [498]), unspecified locations other than Lot 8 (at [182]), various locations outside Sydney, not just Lot 8 (at [239]), and various other properties in the area received the same material for the purpose of building roads (at [384]).

31. Receipt of a notice for the purposes of s 143 of the POEO Act (s 143 notice) identifying that premises can be lawfully used as a waste facility, prepared by Mr Mackenzie, by Mr Mulligan, Mr Ulizzi and Mr Sneddon (the transporters) is identified at [132]-[135].

32. The EPA submitted that the material in the two stockpiles on Lot 8 (stockpiles 1 and 2) came primarily from recycling centres operated by four different processors of waste material. It sought an order that it be able to cross-examine certain processors in relation to whether the materials caused to be transported were tested and complied with the resource recovery exemptions, at [136]. The evidence of the processors Mr Ulizzi of Aussie Skips, Mr Ryan of Bingo, Mr Foxman of BBR and Mr Scarlis of KLF is set out at [137]-[161]. Section 191 notices were issued to the four processors and others seeking information and records, including in relation to testing carried out for the CPRF and ENM exemptions at [162]-[167]. Other records were sought, see at [168]. Record collation of transport records by Ms Moore EPA officer and the difficulties with that are set out at [169]-[182].

33. The nature of the material in stockpiles 1 and 2 on Lot 8 was the subject of evidence consisting of investigations by various EPA officers including water sampling on 27-30 October 2015 and the Salt Ash Waste Investigation Report (the AECOM report) dated 9 June 2016 prepared by Ms Blefari senior environmental scientist with AECOM Australia Pty Ltd (AECOM), at [183]-[191]. AECOM was formerly URS Australia Pty Ltd (URS). The stated purpose of the AECOM report was to determine whether the stockpiles on Lot 8 were compliant with the physical and chemical criteria in the CPRF exemption. Ms Blefari agreed in cross-examination that the AECOM report did not try to compare the results of the sampling with the average maximum concentrations in the CPRF exemption because it was not possible to obtain an average result for particular analytes across an entire stockpile from individual samples taken for the purposes of the report, at [192]. The CPRF exemption requirements applied to a production process rather than an analysis of an in-situ stockpile.

34. Mr Dean environmental scientist with AECOM was responsible for the sampling and analysis of material from 42 test pit locations on stockpiles 1 and 2, at [196]. Mr Fifield engineering geologist with AECOM collected bulk soil samples based on asbestos sightings, at [197], [204]. Mr Walker engineering geologist with AECOM prepared a geotechnical report based on the bulk sampling completed by AECOM, at [199]-[203]. Dr Martens civil and environmental engineer with Martens & Associates Pty Ltd provided an expert report on whether the material complied with the CPRF and ENM exemptions, was fit for the purpose of a road, was “applied to land”, posed a risk to human health and would pose a risk to human health if removed inter alia, at [205].

35. Surveys of the stockpiles were taken, at [206]-[216]. Dr Prifti unit head within the Waste Strategy section of the EPA addressed the statutory scheme and whether the material in stockpiles 1 and 2 complied with the CPRF and ENM exemptions based on the documents supplied by the four processors about their testing regimes, at [217]-[223]. Dr Prifti considered the presence of asbestos in the stockpiles meant the CPRF exemption requirements could not be met. The material in stockpile 1 also exceeded the maximum concentrations for cadmium, lead, nickel and mercury and in stockpile 2 exceeded the maximum concentrations for cadmium, lead, nickel and mercury and did not comply with the maximum chemical concentrations in the CPRF exemption or the ENM exemption. To determine whether the material taken to Lot 8 from three processors was compliant with the exemptions Dr Prifti assessed whether the processors met the sampling frequency requirements in the CPRF and ENM exemptions in the charge period, concluding they did not, at [224]-[227].

36. An outline of the exemption system is set out at [236]-[238]. Processors being principally four recycling facilities (Bingo, KLF, Aussie Skips and BBR) received waste often in skip bins from building sites. This material was sorted and processed to create recovered fines (KLF, Aussie Skips and BBR) and ENM (Bingo) where possible. The processors are forbidden from receiving asbestos under their EPLs. All have asbestos management plans directed to removing asbestos. The exemptions required sampling and testing for certain chemicals and particle sizes and the processors must certify to consumers that the processed material is recovered fines or ENM which meets testing requirements inter alia. A summary of how Lot 8 came to the attention of the EPA through Operation Trojan was set out at [239].

37. The presence of stockpiles 1 and 2 during the charge period was not disputed by Grafil. Grafil did not dispute that the material being brought by transporters generally came from the four processors (Bingo, KLF, Aussie Skips and BBR), at [240]. The precise volume of material in stockpiles 1 and 2 was unknown.

38. The first element of the offence that Grafil was the occupier of Lot 8 in the charge period was admitted. The second element of the s 144(1) offence required proof beyond reasonable doubt that firstly the material placed in stockpiles 1 and 2 on Lot 8 in the charge period was waste. Secondly, that Grafil used Lot 8 as a waste facility, meaning storage and disposal in respect of that waste. I held it was not waste at [264]-[284]. I held at [285]-[305] that material was not applied to land or stored in being temporarily stockpiled.

39. The third element (part 1) concerned use as a waste facility without lawful authority being an EPL, considered at [308]-[320]. The application of the ENM and CPRF exemptions to the material deposited in stockpiles 1 and 2 on Lot 8 obviated the need for Grafil to have an EPL under cl 39 and/or cl 42 of Sch 1 to the POEO Act. The requirement for an EPL by virtue of par (d) of the definition of “waste” in the Dictionary to the POEO Act did not apply if material satisfied the exemptions. Differences between the two exemptions are identified at [310]. The EPA accepted during the hearing that ENM brought to Lot 8 complied with the chemical parameters of the ENM exemption and did not contain asbestos at [311]. The EPA submitted that Grafil had not complied with the consumer responsibilities under the ENM exemption and also that the failures of three processors (KLF, BBR, Aussie Skips) to correctly sample and test under the CPRF exemption meant it could not apply for Grafil’s benefit. The construction of the exemptions was considered at [312]-[319], where I held that the Notes to the exemptions did not have legal effect inter alia.

40. I held that the EPA bore the onus of proof in relation to s 144(1) in the context of the resource recovery exemptions of negativing that the material brought onto Lot 8 during the charge period satisfied the CPRF exemption, at [325]-[337]. The EPA bore the onus of proving the CPRF and ENM exemptions did not apply in the charge period, at [342]. Construction of the CPRF exemption in light of cl 42 of the Waste Regulation concerning asbestos was considered at [343]-[351], where I held that the presence of asbestos was irrelevant to the application of the CPRF exemption. I then held that a processor and a consumer had no responsibility under the CPRF exemption to exclude asbestos, at [352]-[372].

41. Compliance with conditions of the CPRF exemption by consumers, including for use of material for building a road in Condition 7.2.7, was the subject of evidence of Mr Robert Mackenzie, Mr Bruce Mackenzie, Dr Martens, Mr Walker engineering geologist with AECOM and Mr Mostyn engineer, at [380]-[402]. I found that Condition 7.2.7(a) concerning minimum extent of material was complied with in the charge period, at [414]-[422], and that the material on Lot 8 was suitable for building a road, at [423]-[429]. I also held that there was no failure to comply with the requirement in Condition 9.3 of the ENM and the CPRF exemptions that the material for a road be applied within a reasonable time, at [434]-[435]. But for the EPA prohibiting the use of the material for the planned access road the material would have been used for that purpose.

42. Condition 7.2.7(b) of the CPRF exemption required development consent under the EPA Act for a road. I found that an approval granted by the Minister under Pt 3A (now repealed) of the EPA Act (Pt 3A approval) which applied to Lot 8 could satisfy that requirement, at [436]-[438].

43. I found that Grafil failed to comply with record keeping requirements in the CPRF and ENM exemptions in the charge period. I found that the CPRF exemption continued to apply notwithstanding the failure to keep records, at [440]-[445].

44. Condition 9.2 of the CPRF exemption requires that a consumer not place material in or beneath water including groundwater. Expert evidence was called from Dr Martens by the EPA to the effect that as stockpile 1 was placed along a linear pond the material in it could be in direct contact with surface and groundwater. I found non-compliance with this condition was not established by the EPA, at [452]-[454].

45. The EPA argued that the material in stockpiles 1 and 2 did not meet the chemical and physical (particle size) attribute requirements in Condition 10 Table 2 of the CPRF exemption at [455]-[483]. I observed that the evidence on this topic was voluminous and complicated, that the EPA stated in closing that this issue was not an important part of its case, and consequently I would not deal with every aspect, at [455]. Compliance with the sampling and testing conditions in the CPRF exemption by processors was also considered at [484]-[500], where I found that the consumer was not responsible for sampling and testing by processors, and that testing of CPRF exemption material after the charge period was legally irrelevant as two threshold issues, at [467]-[483]. Further I held that the EPA had not established that the processors failed to sample and test material as required by the CPRF exemption in the charge period, at [484]-[499]. The EPA relied on Dr Prifti’s evidence that the processors had not complied with the chemical concentration requirements of the CPRF exemption as required by Conditions 8,11 and 12 of the CPRF exemptions in order to comply with Condition 10. The AECOM report prepared by Ms Blefari based on sampling in October 2015 summarised at [185]-[189] and Dr Prifti’s evidence of the alleged failures of the three processors to correctly sample and test was relied on by the EPA.

(b) the court makes an order under section 10 of the Crimes (Sentencing Procedure) Act 1999 in respect of an offence.

Defendants’ submissions on legal costs

318. The Defendants submitted that the EPA should be entitled to the payment of only 25% of its legal costs. The sum of the EPA’s legal costs will have increased considerably since April 2021. The Court’s power to award costs to a prosecutor in s 257B of the CP Act is discretionary, as indicated by the word “may”. The Court may order a defendant to pay all or some of a prosecutor’s costs, which is made clear by the words “such costs as the court specifies or … as may be determined under section 257G …” That being the case, this Court has on numerous occasions ordered that defendants pay only a portion of a prosecutor’s costs.

319. In Newcastle City Council v Pace Farm Egg Products Pty Limited (No 3) [2005] NSWLEC 423 (“Pace”) at [41], the Court ordered the defendant to pay 30% of the prosecutor’s costs of the proceedings, as agreed or assessed, pursuant to the now repealed s 253 of the CP Act. Section 253 of the CP Act was identical in all material respects to the current ss 257B and 257G of the CP Act. That order in Pace was made on the basis that:

1. The prosecution involved a charge under s 120 of the POEO Act of polluting waters known as Warabrook Lagoon by placing egg waste in a position where it was likely to fall or descend into the lagoon. Although the bulk of the time was spent by the prosecutor at hearing seeking to prove that egg waste had reached the lagoon, the defendant was found guilty on a less serious basis than the principal case argued by the prosecutor that there had been actual pollution of the lagoon, Pace at [3], [5], [39].

2. The prosecutor submitted that the likely harm to the environment was significant, but it was ultimately found to be likely that only a small amount of egg waste would have reached Warabrook Lagoon, suggesting the harm likely to be caused was minimal, Pace at [6], [9].

3. The Court rejected the evidence of the prosecutor’s expert suggesting that the quantity of the spill was in the range of 1,000 to 4,000 litres, finding instead that the spill was likely to be small, somewhere between 300 to 1,000 litres: Pace at [8].

4. The prosecutor was not successful in its application to amend the summons and its particulars, save for an amendment to the description of the pollutant which was uncontested. The application occupied approximately one of the seven days of the hearing, Pace at [37], [39].

320. In Morrison v Defence Maritime Services Pty Ltd (2007) 156 LGERA 365; [2007] NSWLEC 552 (“Morrison”), the Court ordered the defendants in each matter to pay 50% of the prosecutor’s costs, as agreed or assessed, other than costs attributable to the reports of two prosecution experts (which were excluded entirely), Morrison at [30], [36]. Morrison was a case involving charges of oil pollution of Sydney Harbour waters. The prosecutor’s pre-hearing particulars of the volume, duration and locations of oil discharged included that between 40 and 85 litres of oil were discharged on the day in question over a minimum distance of 4.85 km within Sydney Harbour, and that the oil discharge would have a high likelihood of causing oil to coat intertidal habitats and associated flora and fauna, Morrison at [9]-[10]. The Court held that there was a discharge of between five and 15 litres at one location, and a very small amount at another, Morrison at [15]. The Court held that the issue of a continuous discharge of oil was a large, strongly contested and discrete issue which vitally affected findings as to the quantum, duration and locations of oil discharge, environmental harm and culpability, and that a great deal of evidence went to that issue, Morrison at [28]. Given that two of the prosecution’s expert reports were based on the assumption of a continuing discharge, the Court excluded the prosecutor’s costs attributable to those reports, Morrison at [30].

321. Morrison considered former s 253 of the CP Act. The key statements of principle emerging from that case may be summarised as:

1. Where a prosecutor has succeeded only upon a portion of its case, the circumstances may make it reasonable that it bear the expense of litigating that portion upon which it has failed, Morrison at [17].

2. Consistent with the approach in Latoudis v Casey (1990) 170 CLR 534; [1990] HCA 59 the apportionment principles applicable in a civil context are the same in criminal proceedings, save insofar as they may be modified by statute, Morrison at [18]; BulgaUnderground Operations Pty Ltd v Nash (2016) 93 NSWLR 338; [2016] NSWCCA 37 (“Bulga”) at [221].

3. When considering apportionment of costs in a criminal case, a balance has to be maintained between not discouraging litigants from canvassing all material issues and not rewarding them for unreasonable conduct in the pursuit of issues, recognising that a prosecutor has a public duty to put all material issues before the Court, Morrison at [20].

322. Although the position in Latoudis v Casey has been qualified in NSW by the introduction of the provisions now found in Ch 4 (Summary procedure), Pt 5 (Summary jurisdiction of Supreme Court and other higher courts), Div 4 (Costs) of the CP Act, the underlying reasoning in that case informs the approach when considering whether a prosecutor should be deprived of costs to the extent that the prosecutor fails on a dominant or severable and substantial issue. That is, costs are awarded not by way of punishment of the unsuccessful party, but instead as a means of indemnifying the successful party against the expense to which they have been put by reason of legal proceedings, Morrison at [22] citing Latoudis v Casey at 543 per Mason CJ.

323. The apportionment of costs is not an exercise in mathematical precision, but rather a matter of impression and evaluation which may necessitate a broad-brush approach, Morrison at [29], [36] (and the case law cited therein).

324. Whilst mathematical precision is not possible in the apportionment of costs, a decision maker must nonetheless identify the considerations which lead him or her to apportion in a particular manner, Bulga at [231].

Apportionment of costs of these proceedings

325. The Defendants submitted on the question of apportionment of costs that the EPA should not be entitled to any of the costs that it has incurred in relation to the following categories of evidence and/or legal submissions which collectively occupied a considerable portion of the 20-day trial:

1. The evidence of Ms Moore, senior operations officer with the EPA, which sought to assess the tonnages of loads delivered by transporters to Lot 8 during the charge period. The Court held at [243] in Grafil No 1 it could not rely on any of the primary documents exhibited to Ms Moore’s affidavit, nor on the subsequent spreadsheets prepared and produced during the course of the hearing.

2. The evidence of Ms Blefari, senior environmental scientist with AECOM, dealing with whether the stockpiles on Lot 8 were compliant with the physical and chemical criteria set out in the exemptions. The AECOM report was based on sampling conducted in October 2015 and Ms Blefari did not apply the CPRF exemption to the results in her report given that the CPRF exemption applied to a production process rather than to the analysis of an in situ stockpile, Grafil No 1 at [185]-[186], [192], [476]. Furthermore, adopting the CPRF testing regime meant that it was futile to determine whether material was compliant with the exemption by testing at a later time at a stockpile where the material was placed, Grafil No 1 at [475].

3. The evidence of Mr Walker, senior engineering geologist with AECOM, dealing with whether the stockpiled material was suitable for use in a road based on the NSW Roads and Maritime Services Material Specification R44 Earthworks Specification. That report was also based on bulk sampling conducted in October 2015, Grafil No 1 at [199]-[200]. The Court held in Grafil No 1 at [424] that this expert evidence was irrelevant and even if relevant, Mr Walker considered an RMS specification which was not proven by the prosecutor to have any application to the type of road in question. Mr Walker also had no relevant experience in road design or building, Grafil No 1 at [425].

4. The evidence of Dr Martens, civil and environmental engineer, which was conducted on a desktop basis and dealt with the matters recorded, Grafil No 1 at [205]. The Court held in Grafil No 1 at [424] that the expert evidence of Dr Martens that the material was not fit for the purpose of private road construction was irrelevant. Even if relevant, it was observed that the Council Infrastructure Specification 242 Flexible Pavements (November 2016) Policy to which Dr Martens referred had not been proven to be a relevant assessment criterion by the EPA, Grafil No 1 at [426].

5. The evidence of Mr McClenahan, registered surveyor with Brunskill McClenahan & Associates (BMA). The Court could not rely upon the calculations of volume presented in the BMA 2013 and 2015 surveys, Grafil No 1 at [245].

6. The evidence of Dr Prifti, unit head with the EPA, dealing with the subject matters recorded in Grafil No 1 at [217]. In assessing whether the material in stockpiles 1 and 2 complied with the exemptions, Dr Prifti had regard to the chemical and physical properties of the material based on the results from the AECOM report, Grafil No 1 at [217]-[218]. The quantities assumed by Dr Prifti were derived from the analysis of Ms Moore which was later found to be incorrect, Grafil No 1 at [224].

7. Evidence regarding the deposition of material in or beneath water during the charge period (Grafil No 1 at [454]) whether there was a failure to apply material within a reasonable time (Grafil No 1 at [434]-[435]) and seeking to prove that the sampling and testing requirements in the CPRF exemption were not complied with by the processors. With regards to the latter, the Court stated in Grafil No 1 at [455] that the evidence on this topic was voluminous and complicated, yet in closing submissions the EPA stated that this issue was not an important part of its case. At [467], the Court also stated that a large part of the EPA’s evidence was directed to establishing that the material in the stockpiles did not meet the chemical concentrations in Condition 10, Table 2 of the CPRF exemption, but it was held that the general conditions in Condition 7.1 could only be relevant to processors given their obligation to sample and test in accordance with Conditions 10, 11 and 12 as required by Condition 8, Grafil No 1 at [472].

8. Submissions directed to the question of whether the CPRF exemption should be construed as if it contained a condition about asbestos (Grafil No 1 at [351], [365], [371]-[372]) as well as extensive submissions directed to whether a processor or consumer has any responsibilities in relation to the exclusion of asbestos under the CPRF exemption, about which the Court noted in Grafil No 1 at [352] the EPA had adduced much evidence.

326. The EPA’s case on sentence and the basis for the findings of guilt are now heavily focused on a failure to keep records and the failure to obtain the modification to the Pt 3A approval in time. This focus is radically different to the prosecution case run over a period of 20 days in the contested criminal trial.

327. The Defendants submit, therefore, that in all the circumstances the Court in its costs discretion pursuant to ss 257B and 257G of the CP Act, would award the EPA 25% of its legal costs as agreed or assessed.

EPA’s submissions on legal costs

328. The Court would not make an apportionment in any order for payment of the EPA’s legal costs at trial. The specific matters upon which the Defendants rely in [325] above concern evidence, rather than issues, and on the authorities do not justify an order for apportionment.

329. In relation to sentence, it would be open to the Court to consider making some reduction in the payment of the EPA’s legal costs on account of the fact that the EPA no longer presses for an order for the removal of the stockpiles.

Legal principles

330. An order for costs is made to indemnify the successful party as to the expense to which it has been put by reason of the legal proceedings. It is not awarded as punishment against the unsuccessful party, Latoudis v Casey at 543 per Mason CJ; Morrison at [22] per Biscoe J. Ordinarily, a successful party should not be deprived of costs unless there is material to justify a contrary order being made, Milne v Attorney-General for the State of Tasmania (1956) 95 CLR 460; [1956] HCA 48 at 477; Bulga at [226] per Bathurst CJ, Hidden and Davies JJ.

331. As a condition precedent to apportioning costs, there must be a finding that a prosecutor has succeeded “only on a portion of its case”, Morrison at [17] per Biscoe J. In applying this principle, a distinction is commonly drawn between cases which involve clearly discrete issues for determination, and those in which all issues are inseparable, or at least sufficiently linked, with respect to the overall disposition of the particular matter: Bulga at [220].

332. In criminal proceedings especially, where a prosecutor has a public duty to put all material issues before the court, a balance has to be maintained between not discouraging litigants from canvassing all material issues and not rewarding them for unreasonable conduct in the pursuit of issues, Morrison at [20]; Bulga at [221].

Application of the legal principles

Trial and remitter

333. In relation to proof of the Defendants’ criminal liability, on remitter following GrafilCCA, the EPA has been successful. There was no portion of the case on liability in respect of which the EPA failed.

334. Pace is of limited assistance to the Defendants. In that case, the Court made an order for payment of 30% of the prosecutor’s costs on the basis that the defendant was found guilty of a water pollution offence against s 120 of the POEO Act “albeit on a less serious basis than the primary case argued by the Prosecutor”, Pace at [26]. That is not the case in these proceedings, in respect of which the Court has found that between 24,000-44,000 tonnes of waste was imported onto Lot 8, Grafil No 1 at [247]. Furthermore, the concurrent evidence adduced over the course of the sentencing proceedings has confirmed that the asbestos fragments within stockpiles 1 and 2, being widespread and randomly distributed, came with the waste delivered to the premises. The waste accordingly is, and was during the charge period, asbestos waste, Grafil No 1 at [527]. Unlike in Pace, there has been no unsuccessful application by the EPA to amend the summonses.

335. Morrison is of limited assistance to the Defendants. The defendant in that case had issued offers in accordance with the principles from Calderbank v Calderbank [1975] 3 All ER 333 on factual bases that were more objectively serious than those found by the trial judge, at [11]-[12], [15]. There have been no such offers or concessions made in this case. Furthermore, in Morrison, the Court at [26], [36], made an order for a 50% apportionment of costs on the basis that the prosecutor had failed to prove the continuing offence alleged in the summons, whereas the EPA in this case has proved the offences particularised in the summonses without amendment or waiver. Although the CCA rejected the submission the EPA advanced at trial with respect to the invalidating effect of cl 42 of the Waste Regulation on the operation of the resource recovery exemptions (Grafil CCA at [333]), this error did not affect the finding of liability in relation to the lawful authority element of the charge against s 144(1) of the POEO Act, Grafil No 3 at [34]-[45]. Proof of the offences against the Defendants was not dependent on a finding that the stockpiles are asbestos waste.

336. The matters referred to in support of the Defendants’ application for an apportionment of costs in respect of the trial relate to evidence (in [325] above) and not issues. The present state of the authorities does not support the apportionment of costs by reference to evidence. Even if this were an available approach, the following responses demonstrate why no apportionment of costs is justified in reliance on these factors:

1. As to [325(1)] above, the evidence of EPA officer Ms Moore in relation to waste tonnages was necessary because Grafil failed to comply with the record keeping requirements under Condition 9.1 of the CPRF exemption and Condition 9.2 of the ENM exemption. Evidence of this nature in relation to waste mass was necessary for proving exceedances of the limit thresholds under cll 39 and 42 of Sch 1 to the POEO Act. Given the Court’s finding that 24,000-44,000 tonnes of waste was stored at Lot 8, the summary tonnage evidence assembled by Ms Moore was sufficient for this purpose. There was no failure by the EPA on this issue at trial.

2. Contrary to the suggestion (in [325(2)] above), the evidence of Ms Blefari of AECOM was relevant to the process of characterising the composition of stockpiles 1 and 2, including in so far as concerns asbestos, and was not limited to assessing the composition of the stockpiles against the CPRF exemption. In so far as a finding of five tonnes of asbestos waste is necessary to trigger cl 42(3)(a) of Sch 1 to the POEO Act, this evidence was directly relevant to liability on the basis of the EPA’s case in relation to waste storage, Grafil CCA [180], [189]. The AECOM report was also relied on by all expert witnesses called in the case, including for the purposes of opining in relation to the specific consequences arising from the contaminant composition of the waste materials, for example, Grafil No 1 at [218], [477] (Dr Prifti); Grafil No 1 [339]-[340] (Mr Mostyn); Grafil No 1 [465], [477] (Dr Martens); Mr Lau and Dr Martens in the sentencing hearing.

3. In relation to the Salt Ash Waste Assessment – Geotechnical Investigation Report of Mr Walker engineering geologist with AECOM, the Defendants’ reliance in [325(3)] on the finding in Grafil No 1 at [424] is misplaced in circumstances where the finding was based on the application of the incorrect onus and standard of proof, and is contrary to the CCA’s conclusion regarding the proper construction of the CPRF exemption, Grafil CCA at [289]-[292]. Mr Walker’s evidence as to particle sizes was also relied on by both Dr Martens (Grafil No 1 at [464]) and Mr Mostyn (Grafil No 1 at [399]).

4. The submission immediately above also applies in response to the Defendants’ submission above in [325(4)] in relation to Dr Martens’ evidence on the fitness of the waste materials comprising stockpiles 1 and 2 for the construction of a road, Grafil No 1 at [424].

5. In relation to the Defendants’ submissions in [325(5)] above, while Pain J may have found that the surveying evidence of Mr McClenahan was unreliable on account of an assumption that the ground beneath the stockpiles was flat, like all of the evidence referred to in the Defendants’ costs submissions above in [325], the surveying evidence was material and of a nature that an investigating authority would ordinarily be expected to present to the Court.

6. As to [325(6)] above and the evidence of Dr Prifti, the submissions made in [336(3)] are repeated. Whether the material taken to Lot 8 during the charge period complied with the CPRF and ENM exemptions based on the documents supplied by the four processors about their testing regimes was relevant to the application of those exemptions, Grafil No 1 at [217], Grafil CCA at [289]-[292].

7. The submissions made in [325(7)] above in relation to various aspects of the CPRF exemption are based on the application of the incorrect onus and standard of proof, Grafil CCA at [228]. The submissions made in [(3)336(3)] are repeated.

8. In relation to submission made as to asbestos and cl 42 of the Waste Regulation in [325(8)] above, see above in [335].

337. The Court would make no apportionment of costs in respect of the trial.

Sentence

338. The EPA’s case on sentence and the basis for the findings of guilt are not now heavily focused on the failure to keep records and the failure to obtain the modification to the Pt 3A approval in time. First, these are not new aspects of the EPA’s case, EPA’s submissions at trial at pars 124, 127 (Ex 9). Secondly, the EPA’s case is broader than these two failings, particularly in so far as the stockpiling of recovered fines on Lot 8, in conjunction with a Pt 3A approval, was not authorised by Condition 7.2.7 of the CPRF exemption (Grafil CCA at [290]), and neither the stockpiling of recovered fines or ENM would have been ancillary to the activities authorised by the modified Pt 3A application even once approved, Grafil CCA at [372].

339. On sentence, the only apparent issue in respect of which the EPA has not succeeded is in relation to the original order it sought for removal of the waste materials comprising stockpiles 1 and 2. The position that both parties are now taking in relation to the need for a capping solution has involved a compromise: the EPA has had to accept that it has only been proved that the stockpiles are causing the potential for environmental harm to receiving groundwaters, while the Defendants have resiled from their original position being that there was no need for any remediation of the stockpiles.

340. In the course of a five-year proceeding, this discrete issue could only justify a minor apportionment of costs, in the order of 5%.

341. For the sake of completeness, and without conceding it is open to be made, an order for a dismissal of the charge against Mr Mackenzie would not justify an apportionment of costs, s 257B(b) of the CP Act.

Finding on legal costs

342. The Court has discretion whether to award costs in whole or in part to a prosecutor pursuant to s 257B of the CP Act. The statements of principle identified by the parties, albeit with varying emphases, the Defendants above in [322]-[324] and the EPA in [330]-[332], are correct.

343. While both parties have referred to the facts in Pace and Morrison in some detail neither case can be a strict guide to any particular approach to whether costs should be awarded in a criminal matter as each case must inevitably depend on its own facts, and these vary markedly from case to case. As the parties submitted, costs were considered in those cases under former s 253 of the CP Act. Section 257B is in similar terms. Those cases are examples of where the Court has in criminal sentencing exercised its discretion not to award the whole costs of a prosecutor as it was not successful on a portion of its case which was a dominant or separable issue and the Court considered an award of costs in relation to those aspects was not warranted.

344. In Pace, following the prosecutor successfully proving guilt for water pollution at trial, the issue of whether all the prosecutor’s costs should be ordered to be paid by the defendant arose in sentencing. As summarised above in the Defendants’ submissions in [319], only a third of the prosecutor’s costs were awarded because the prosecutor failed to prove a substantial part of its case on sentence, namely that actual environmental harm had occurred because egg waste entered a certain lagoon. The situation here for the EPA is arguably similar given the large number of parts of its case at trial in relation to which it was not successful, taking into account the legal findings in Grafil CCA. In Morrison, a sentencing matter where the defendants pleaded guilty, relevant considerations as at [17]-[25] included that, as agreed by the parties, where a prosecutor has succeeded only on a portion of its case, the circumstances may make it reasonable that it bear the expense of litigating that portion on which it had failed. That observation is essentially applicable to the EPA here. There were a number of discrete issues in relation to which the EPA was unsuccessful at trial and which were the subject of extensive evidence.

345. I do not therefore agree with the EPA’s submission that because it succeeded following Grafil CCA in having the Defendants found guilty that there are no severable issues with attendant evidence relied on at trial unsuccessfully by the EPA relevant to this costs consideration. The three issues on which the EPA succeeded have been identified above, firstly, the failure of the Defendants to keep the records specified in Condition 9.1 of the CPRF exemption and Condition 9.2 of the ENM exemption (see Grafil No 1 at [440]-[445]), secondly, the failure to have in place a development consent under the EPA Act for the planned access road (see Grafil No 3 at [44]), and thirdly, temporary stockpiling of material resulting in the application of waste to land Grafil CCA at [175]-[197] finding that any stockpiling of material on land is the application of waste to land. These issues had a very short factual compass compared to the many other matters the EPA chose to raise at the lengthy trial.

346. I have summarised above in [23]-[51] what occurred at trial and identified in [188] the ways the EPA’s case on how the exemptions should operate for a consumer now varies from its case at trial. The issues and evidence particularly in relation to the operation of the CPRF exemption in relation to the obligations and actions of the processors and in relation to the presence of asbestos was extensive and occupied a large part of the 20-day hearing. As identified in [188] above the EPA sought to attribute to the Defendants the failure of the processors to carry out the sampling and testing required under the CPRF exemption. The evidence adduced which was particularly voluminous at trial concerned the processors’ evidence about their testing regimes, the laboratory records being subpoenaed and records of interviews conducted with them inter alia. Further, the EPA sought to prove that the material in the two stockpiles on Lot 8 did not meet the CPRF exemption characteristics, relying on extensive expert evidence about what was in the stockpiles. As noted in [188(4)] above the EPA is seeking to recover costs for the matters which it did not succeed in at trial and in relation to which its position in the sentencing hearing has changed.

347. The characterisation of the conduct of the trial by the Defendants above in [325] is generally correct in identifying issues in relation to which the EPA was not successful and in relation to which substantial evidence was adduced and a substantial amount of court time occupied. The matters identified by the Defendants are discrete matters which did not assist the EPA to prove any elements of the case on which it succeeded.

348. In relation to Ms Moore’s evidence as to the volume of material delivered by the transporters to Lot 8, the extensive inadequacies of her tabulation of the records of transporters was identified in Grafil No 1 at [241]-[243]. The EPA submitted that this evidence was necessary in relation to waste mass for proving exceedance of the limit thresholds under cll 39 (limit of 200 tonnes of building and demolition waste applied to land) and 42 (limit of 2,500 tonnes or 2,500 m³ of waste stored on premises at any one time) of Sch 1 to the POEO Act. The Defendants should not have to bear the cost in criminal proceedings of inadequate evidence collation by the EPA.

349. In relation to the AECOM report it was largely directed to characterising the composition of stockpiles 1 and 2 for the purposes of considering the resource recovery exemptions including in relation to the presence of asbestos. The EPA submitted that it was also relied on by all the expert witnesses in the case and on sentencing by Mr Lau and Dr Martens.

350. On the matter of asbestos, the subject of extensive evidence in relation to sampling and testing in the AECOM report, further documentary evidence and Dr Martens’ and Mr Lau’s evidence as discussed above in [131]-[132], [142]-[143], [155]-[158], the Defendants are not liable legally for its presence in the stockpiles. That evidence while relevant to the EPA’s case at trial was ultimately irrelevant to the liability case given the findings in Grafil No 1 and Grafil CCA on this issue.

351. While the EPA submitted that it has a responsibility to place all material issues before the Court, that is not carte blanche to raise every issue it wishes to, not least because of the substantial cost to the Defendants, the court system in the amount of time occupied by a trial, as well as the EPA’s costs. Had the matters on which the EPA succeeded alone been pursued at trial I consider a week, at most, of hearing time would have been necessary.

352. In relation to the sentencing hearing, close to three of the six days were spent hearing expert evidence of hydrological engineers Mr Lau and Dr Martens and submissions about their evidence. The EPA emphasised for most of the sentencing hearing that due to the presence of asbestos in the material in the two stockpiles on Lot 8 an order for removal was necessary as the material could not otherwise be recycled or re-used given cl 42 of the Waste Regulation. As has been identified above in [166] and [178], the Defendants had no knowledge of the presence of asbestos in the material and no ability to prevent its arrival given the scheme operated under the CPRF exemption. Until the beginning of the fifth day of the sentencing hearing the EPA maintained that an order for removal of that material, which it agreed would cost in the range of about $15-$20 million, should be made. On any view such an order would have been a massive impost on the Defendants who were entirely unwitting consumers in relation to the presence of asbestos in the material they received. Such an order was also clearly not warranted by the very limited potential for environmental harm identified at the sentencing hearing. Had the EPA not taken such an onerous position the evidence on environmental harm could have been dealt with far more expeditiously.

353. This suggests that 25% of costs as agreed or assessed in relation to the trial and the sentencing hearing payable by Grafil should be awarded to the EPA. Joint and several liability for costs by both Defendants is not warranted given that Mr Mackenzie is liable by virtue of s 169(1).

354. I note that the amount of the EPA’s costs can be considered as part of the exercise of sentencing discretion, Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78], [88] per Kirby J (Mason P and Hoeben J agreeing).

Investigation costs

355. Pursuant to s 248(1) of the POEO Act the EPA seeks an order that the EPA’s investigation costs and expenses are payable on a joint and several basis in the amount of $187,088.03. These costs are identified in the affidavit of Mr Matthews summarised above in [81] and are largely the costs of the AECOM report relied on in Grafil No 1. The EPA submitted that the AECOM report was essential to the evidence prepared in the case at trial, being referred to by a number of witnesses, and for the sentencing hearing being referred to by Mr Lau. Such an order is opposed by the Defendants.

356. None of the legal bases on which the EPA has been successful in establishing liability required the AECOM report to be prepared. Its use was largely directed to issues which the EPA was not able to prove at trial, namely whether the stockpiles complied with the testing requirements of the CPRF exemption or the presence of asbestos. Accepting that obtaining such a report may have had some relevance to understanding what material had been deposited on Lot 8 for the purposes of the sentencing hearing, I will require Grafil to pay 25% of the investigation costs being $46,772.

Defendants’ legal costs

357. I observe that in a matter that has essentially been a “test case” on the operation of the resource recovery exemptions in relation to s 144(1), a strict liability offence under the POEO Act, the legal and other costs incurred by the Defendants has been very large indeed. Legal costs incurred by the Defendants as at 31 March 2021 were more than $1,650,000 as identified in Mr Hannam’s affidavit above in [119].

Conclusion on penalty for Grafil

358. When sentencing, the Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a “value judgment as to what is the appropriate sentence given all the factors of the case”, Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [26] unanimously following Markarian v The Queen at [51] per McHugh J.

359. Given the low objective seriousness of the offence, the absence of actual environmental harm, the potential for environmental harm from the presence of asbestos not arising from Grafil’s actions, subjective factors as identified above in [286]-[291], its liability for legal costs of the EPA at 25% likely being well over $285,543, its liability for 25% of investigation costs of $46,772 and the cost of the cap and contain order being a minimum liability of $250,000, amounting to a total minimum liability of $582,315, no additional penalty will be imposed on Grafil.

Orders

Proceedings 2016/157886 - Environment Protection Authority v Grafil Pty Ltd

360. In proceedings 2016/157886, the Court orders that:

1. The Defendant Grafil Pty Ltd is convicted of the offence with which it has been charged under s 144(1) of the Protection of the Environment Operations Act 1997 (POEO Act).

2. The Defendant Grafil Pty Ltd is ordered to pay 25% of the Environment Protection Authority's (EPA) legal costs of the proceedings in a quantum as agreed or assessed, but subject to the costs order made by the Court in Environment Protection Authority v Grafil Pty Ltd; Environment Protection Authority v Mackenzie (No 2) [2018] NSWLEC 210.

3. The Defendant Grafil Pty Ltd is ordered to pay 25% of the EPA’s investigation costs being $46,772 pursuant to s 248(1) of the POEO Act.

4. Pursuant to s 245 of the POEO Act, the Defendant Grafil Pty Ltd is ordered to take such steps as are specified below within such time as is specified (or such further time as the Court on application may allow):

1. By no later than four weeks after the making of these orders, engage an environmental consultant who is certified under the Certified Environmental Practitioner (CEnvP) Scheme or Registered Environmental Assessment Practitioner (REAP) Scheme to develop a remedial action plan (the RAP) that provides for the capping and retention of the waste referred to in the judgment of the Court as Stockpiles 1 and 2 present on Lot 8 DP 833768 (the Premises) in accordance with these orders.

2. The RAP is to include provisions considered by the environmental consultant retained pursuant to order 4(a) above to be reasonably required in order for the capping and retention of Stockpiles 1 and 2 to be in accordance with the ANZECC September 1999 Guidelines for the Assessment of On-Site Containment of Contaminated Soil and the National Environment Protection (Assessment of Site Contamination) Measure 1999 (as amended). The RAP is to be prepared in consideration of the findings of the Site Investigation Report prepared in respect of the Premises by JBS&G Australia Pty Ltd dated 27 April 2021. In particular, the RAP is to provide for:

1. the controlled excavation of a 2 m strip along the eastern end of Stockpile 1 adjoining the perimeter drain and the relocation of this excavated material onto the western end of Stockpile 1 or the northern end of Stockpile 2;

2. the reshaping of the area excavated in accordance with order 4(b)(i) above and the area on which excavated material is relocated in accordance with order 4(b)(i) above;

3. the installation of a 300 mm capping layer comprised of natural sand soils present on the Premises;

4. the placement of a visual marker layer to visually distinguish between the materials stockpiled in Stockpiles 1 and 2, and the overlying capping material;

5. the re-seeding of the surface of Stockpiles 1 and 2 with grass, to the extent that any areas are not already grassed over; and

6. the preparation of a long-term Environmental Management Plan.

3. By no later than 12 weeks after the making of these orders, the RAP is to be submitted to a site auditor accredited under the Contaminated Land Management Act 1997 (the Site Auditor).

4. The Defendant Grafil Pty Ltd, by itself and/or through its consultant retained pursuant to order 4(a) above, is to engage with the Site Auditor in good faith to meet the reasonable requirements of the Site Auditor for approval of the RAP by no later than 18 weeks after the making of these orders.

5. Within 8 months of the RAP being approved by the Site Auditor, the Defendant Grafil Pty Ltd is to implement the actions required under the RAP.

6. By no later than 10 weeks after the implementation of the actions required under the RAP, the Defendant Grafil Pty Ltd is to arrange for the Site Auditor to inspect Stockpiles 1 and 2 and seek the Site Auditor's written confirmation that the RAP has been satisfactorily implemented.

7. The Defendant Grafil Pty Ltd by itself and/or through its consultant retained pursuant to order 4(a) above, is to engage with the Site Auditor in good faith to meet the reasonable requirements of the Site Auditor in order to obtain written confirmation of the satisfactory implementation of the RAP by the Site Auditor under order 4(f) above.

8. Within 21 days of receiving written confirmation from the Site Auditor of the satisfactory implementation of the RAP in accordance with order 4(g) above, the Defendant Grafil Pty Ltd is to provide a copy of the Site Auditor's written confirmation to the New South Wales EPA of the satisfactory implementation of the RAP. This may be provided by email to [email protected].

5. In the event the Defendant Grafil Pty Ltd exercises its entitlement under s 245 of the POEO Act to apply to the Court for further time to take the steps specified in order 4, the Defendant Grafil Pty Ltd has liberty to so apply on three days written notice.

Proceedings 2016/157995 - Environment Protection Authority v Mackenzie

361. In proceedings 2016/157995, the Court orders that:

1. The charge against the Defendant Robert Mackenzie be dismissed pursuant to s 10(1)(a) of the Crimes (Sentencing Procedure) Act 1999 without proceeding to conviction.

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Decision last updated: 08 November 2021