Environment Protection Authority v Hochtief AG - [2006] NSWLEC 200

Land and Environment Court

of New South Wales

CITATION: Environment Protection Authority v Hochtief AG [2006] NSWLEC 200

PARTIES:
PROSECUTOR:
Environment Protection Authority
DEFENDANT:
Hochtief AG

FILE NUMBER(S): 50021; 50022 of 2005

CORAM: Biscoe J

KEY ISSUES: Environmental Offences - Prosecution :- intentional noise pollution – sentencing considerations

LEGISLATION CITED: Crimes (Sentencing Procedure) Act 1999 ss 21A, 22, 22A, 23
Protection of the Environment Operations Act 1997 ss 64(1), 241

CASES CITED: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357;
Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304;
Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683;
Chivers v Western Australia [2005] WASCA 97;
Dennison v Tasmania [2005] TASSC 54;
Environment Protection Authority v Bega Valley Shire Council [1998] NSWLEC 187;
Environment Protection Authority v Metalcorp Recyclers [2000] NSWLEC 259;
Environment Protection Authority v Metalcorp Recyclers Pty Ltd (2004) 136 LGERA 125;
Environment Protection Authority v Pasminco Broken Hill Mine Pty Ltd [2002] NSWLEC 70;
Environment Protection Authority v Port Kembla Copper Pty Ltd (2001) 115 LGERA 391;
Markarian v The Queen (2005) 79 ALJR 1048;
Moore v R [2005] NSWCCA 407;
R v Dib [2003] NSWCCA 117;
R v Holder [1983] 3 NSWLR 245;
R v MacBain [2005] NSWCCA 358;
R v Olbrich (1999) 199 CLR 270;
R v O’Neill [1979] 2 NSWLR 582;
R v Otto [2005] NSWCCA 333;
R v Sladic (2005) 92 SASR 36;
R v Thomson (2000) 49 NSWLR 383;
State Pollution Control Commission v CSR Ltd (1989) 75 LGRA 1

DATES OF HEARING: 10/04/2006-11/04/2006

DATE OF JUDGMENT:
04/28/2006

LEGAL REPRESENTATIVES:
PROSECUTOR:
Mr Rushton SC
SOLICITORS
Environment Protection Authority
DEFENDANT:
Mr I Lloyd QC
SOLICITORS
Minter Ellison

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

BISCOE J

28 April 2006

50021 and 50022 of 2005

ENVIRONMENT PROTECTION AUTHORITY v HOCHTIEF AG (ARBN 101525651)
JUDGMENT

HIS HONOUR:
A. INTRODUCTION

1 The defendant Hochtief AG, with its joint venturer Thiess Pty Ltd, was the New South Wales State Government contractor for the construction of the Epping to Chatswood component of the Parramatta Rail Link Project. The defendant has pleaded guilty to two noise pollution charges concerning its excavation activities over the Queen’s Birthday long weekend in June 2004. Most of the facts are agreed. The main issues are whether the defendant committed the offences intentionally, or only as a result of failure to adequately supervise a subcontractor; and the appropriate penalty.

2 The first charge is that between about 10 am on Sunday 13 June 2005 and 1:50 am on Monday 14 June 2004 (a public holiday) the defendant committed an offence against the Protection of the Environment Operations Act 1997, s 64(1) in that it was the holder of a licence, a condition of which was contravened by a person. The second charge is in the same terms except that it relates to the period between about 10 am and 6 pm on Monday 14 June 2004. The particulars of the contraventions are that excavation of cross-passage number 42 (CP 42) was carried out by rock hammering by the defendant’s contractor Kuipers Excavations and/or its employees, agents or sub-contractors. CP 42 was one of the cross passages required to provide emergency accessways between the two mainline rail tunnels and was located about 30 metres beneath the surface.

3 The licence was environment protection licence No 11735. The relevant condition permitted an excavation process known as rock hammering in CP 42 only until 1 pm on a Saturday and at no time thereafter on a Saturday, nor on a Sunday or Public Holiday. It is common ground that rock hammering, relevantly to the charges, occurred in CP 42 over the long weekend during the hours of approximately:

(a) 8:00 am on Sunday 13 June to 1:30 am on Monday 14 June; and
(b) 10:00 am to 6:00 pm on Monday 14 June.

4 It is also common ground that the said restrictive condition did not prevent another less noisy but slower excavation method known as grinding during those hours in CP 42.

5 There is an Agreed Statement of Facts as follows:

1. Offences

1.1 The defendant has pleaded guilty to two separate offences under section 64 (1) of the Protection of the Environment Operations Act 1997.

2. Background to Defendant

2.1 Hochtief AG (‘Hochtief’) is a German company registered in Australia having its registered office in Australia at Level 3, Bulletin Place, Sydney in the State of New South Wales. It carries on the business of construction and civil contracting.

2.2 In July 2002 a contract was awarded by the NSW Government’s Transport Infrastructure Development Corporation for the construction of the Epping to Chatswood component of the Parramatta Rail link project (‘ECRL’). The contract was awarded to the Thiess Hochtief Joint Venture (‘THJV’). THJV is an unincorporated joint venture between Hochtief and Thiess Pty Ltd (‘Thiess’).

2.3 Thiess is a corporation having its registered office at the ‘Thiess Centre’, 179 Grey Street, South Brisbane in the State of Queensland. It carries on the business of integrated engineering and services provider.

2.4 Under the terms of the contract, THJV accepted responsibility for the design and construction of two mainline rail tunnels, each 13km long, and four stations between Epping and Chatswood.

‘EPL’).

3. Mainline Tunnel Excavation

3.1 Two Tunnel Boring Machines (‘TBM’) are used to excavate the two mainline rail tunnels. These machines are very large. They are about 200 metres in length and roughly 7.5 metres in diameter. They simultaneously excavate rock using a large cylindrical shaped cutter head (about 13 metres in diameter) located at the front of the TBM. A conveyor belt above the TBM conveys the excavated spoil from the cutting face to the M2 work site. At the same time the TBM also lays concrete on the bottom of the tunnel, reinforces the ceiling of the tunnel with steel and it also lays tracks so it can move forward as it constructs the tunnel.

3.2 Each TBM must be constantly supplied with raw materials such as concrete and steel reinforcement. When the TBM is operating vehicles are constantly moving to and away from the TBM.

4. Cross Passages

4.1 Approximately 49 cross passages are required by Hochtief to provide access ways between the two mainline tunnels. Because the main line tunnels are not wide enough to have a two-way flow of traffic, in order to manage the logistics of these vehicle movements, wider cross passages are constructed every fourth cross passage.

4.2 The cross passages are located at approximately 240m spacings and provide emergency access from one tunnel to another when the railway line is operational.

4.3 Cross passages are built between the two mainline tunnels. There are two types of cross passages for the ECRL which include intermediate cross passages and widened cross passages. An intermediate cross passage is about 3.5 metres wide and 4.5 metres high.

4.4 Hochtief elected to widen certain cross passages to provide safe and efficient access for material movement between tunnels during construction. A widened cross passage is about 5 metres wide and 5 metres high. Widened cross passages also provide an additional means of safe egress for people working on the TBM's to evacuate a mainline tunnel in case of an emergency.

4.5 When the TBM is operating vehicles are constantly moving to and away from the TBM. Because the main line tunnels are not wide enough to have a two-way flow of traffic, in order to manage the logistics of these vehicle movements, wider cross passages are constructed every fourth cross passage, to allow vehicles to cross over from one mainline rail tunnel to the other. Cross passages between the two mainline rail tunnels are built about every 240 metres and each fourth one is wider for the reasons explained above.

4.6 The more wider cross passages that are constructed, and the closer a wide cross passage is to the TBM, the easier it is for vehicles to move to and from the TBM. If for example the closest wide cross passage to a TBM is 1000 metres, a vehicle that has just supplied materials to the TBM would have to go back 1000 metres to this cross passage (and cross to the other mainline tunnel) before another vehicle could access the TBM.

4.7 The excavation of the cross passages ideally requires one excavator in each of the mainline tunnels. If the excavation of a particular cross passage is in between the operating TBM and the supply of raw materials it would impede progress of the TBM, as the vehicles supplying the TBM cannot pass the excavator. After the cross passage is partially constructed the excavators move into this open space and out of the mainline rail tunnels so vehicles can pass. It is therefore preferable for engineering and operational reasons that the cross passages are constructed, or at least partially constructed, when the TBM is not operating.

4.8 The cross passages are excavated by an excavator fitted with a rock hammer attachment or a grinder attachment known as a "pineapple head".

5. The Licence

5.1 At the time of the offence the applicable EPL conditions were O13.1, O3.1 and O3.2. O13.1 specified the hours for work on cross passages and referred to condition O3.1. Condition O3.1 provided that licensed activities and scheduled development work occurring on the surface, or at or near ground level was only permitted to be carried out between the hours of:

(a) 7:00am to 6:00pm Monday to Friday; and

(b) 8:00am to 1:00 pm Saturday,

except as expressly permitted by condition O3.2 or other conditions of the EPL.

5.2 Rock hammering to excavate CP42 was prohibited by the EPL at all other times including Sundays and on Public Holidays. However other sub-surface activities were permitted outside of these time periods in limited circumstances.

5.4 Condition O3.1 of the EPL provides:

5.5 Condition O3.2 of the EPL provides:

Background to Kuipers Excavations Pty Ltd

6.1 Kuipers Excavations Pty Ltd (‘Kuipers Excavations’) is a corporation having its registered office at Lot 71, 5th Avenue, Llandilo NSW 2747. It carries on the business of general plant hire and excavation services.

6.2 William Albert Kuipers was the managing director of Kuipers Excavations. In mid May 2004 Stephen Schenk, TBM Engineer employed by Hochtief, contacted Mr Kuipers in relation to cross passage excavation for the ECRL.

6.3 In middle to late May 2004 Mr Kuipers met Mr Schenk and inspected the mainline tunnels and discussed cross passage excavation work with Mr Schenk. Mr Schenk told Mr Kuipers the times in which rock hammering and grinding of cross passages was permitted to be carried out under the EPL.

6.4 On 1 June 2004 Mr Schenk received a faxed tender from Kuipers Excavations to carry out cross passage excavation for the ECRL (‘Kuipers Excavation Tender’). On 3 June 2004 Mr Schenk sent an e-mail to Lindsay Rhodes (THJV Commercial Department) attaching the Kuipers Excavation Tender and requested Mr Rhodes to prepare a Minor Works Subcontract.

6.5 No written contract was in place between Kuipers and Hochtief at the time the work was performed, however there was a verbal agreement. The Minor Works Subcontract was executed by Mr Kuipers on 6 August 2004 and Stephen Burns, ECRL Project Director employed by Thiess, on 16 August 2004.

Long Weekend’):

(a) Mr Kuipers - excavator operator

(b) Daniel Mattick - excavator operator

(c) Brad Fairburn - excavator operator.

7. Background to Charter Contracting Pty Ltd

7.1 Charter Contracting Pty Ltd (‘Charter Contracting’) is a corporation having its registered office at RJ Wilmott & Co., Suite 6, Level 1, 871 – 877 Pacific Highway, Chatswood NSW 2067. It carries on the business of rock excavation and demolition services. Michael Klinge was a director of Charter Contracting at the time of the offences.

Dominic Geddes – excavator operator

Mannix Klinge – excavator operator.

8. Circumstances relating to the Offences

8.1 On 7 June 2004 Mr Kuipers, Mr Mattick, Mr Geddes, Michael Klinge and Mannix Klinge attended the THJV Site Induction courses for the ECRL. During the Site Induction courses Mr Kuipers was told that rock hammering in CP42 over the Long Weekend was allowed only up to 1:00pm Saturday 12 June 2004.

8.2 On or about 11 June 2004 Mr Schenk met with Mr Kuipers and Christian Zimmermann, TBM Manager employed by Hochtief, and discussed the start and finish times for CP42 excavation over the long weekend.

8.3 During the long weekend, Hochtief employees provided minimal supervision and inspected the CP42 works being undertaken by Kuipers Excavations only once or twice per day. Virtually all communication in relation to the CP42 works between Hochtief and Kuipers Excavations was with Mr Kuipers.

Saturday 12 June 2004

On 12 June 2004 Phil Aitken, THJV DownLine TBM Superintendent employed by Thiess, inspected the upline main tunnel sometime before 8am and observed Mr Kuipers setting up rock hammers. Mr Aitken proceeded to inspect the downline tunnel and observed a drill rig being set up and left the mainline tunnels at about 8.30am.

8.4 At about 8.30am Mr Kuipers instructed Mr Mattick and Mr Geddes to commence rock hammering in CP42.

8.5 At about 8.30am Grace Blackie and Ian Blackie, residents of 1 Abuklea Road, heard a jack hammering type noise while they were sitting on their back patio. Sometime between 9:00am to 9.30am Kevin So, resident of 122 Vimiera Road, heard a jack hammering sound in his bedroom. Mr So had been woken by the jack hammering sound by around 8.30am. The windows on the second storey of his house and furniture were vibrating. Mr So felt as if his whole house was shaking.

8.6 At about 9.45am, Mr So called the THJV 24 hour 1800 Construction Response Telephone Line. Any complaint received by the THJV 24 hours Construction Response Line is referred to a pager service held by the Transport Infrastructure Development Corporation (‘ TIDC ’). A TIDC officer is then required to contact THJV and advise it of the details of the complaint.

8.7 At about 9.45am Chris Peat, Community & Public Relations Manager employed by Thiess, received a call from Peter Whelan, Complaints Line Operator employed by TIDC. Mr Whelan told Mr Peat that a complaint had been received from Mr So regarding a jack hammering sound.

8.8 Mr Peat told Mr Zimmermann at about 11.30am that Mr So had made a complaint about jack hammering. Mr Zimmermann told Mr Peat that rock hammering works in CP42 would cease at 1.00pm. Mr Kuipers was not told about the complaint from Mr So on Saturday.

8.9 Mr Schenk inspected excavation works at CP42 at 12 noon and observed that rock hammering was being carried out satisfactorily. Mr Schenk exited the mainline tunnels at about 12.30pm and left the ECRL Site at about 12.30pm to 1:00pm. No Hochtief employees were present after 1pm.

8.10 Mr Kuipers did not tell Mr Geddes or Mr Mattick to stop rock hammering at 1.00pm. Messrs Geddes and Mattick continued to rock hammer CP42 throughout the day.

8.11 At 3pm Mr So left his house because he could not stand the noise of the rock hammering any more and so left his house.

8.12 At or about 7.00pm Mr Kuipers instructed Mannix Klinge to start hammering until he received a call from THJV due to noise or vibration. It is not known exactly when rock hammering excavation of CP42 ceased. It is estimated to have ceased sometime between 8:00pm and 10.00pm. Mr Klinge was instructed that the TBMs would be working again as of Tuesday.

8.13 At 11.00pm Mr So returned to his house and did not notice any rock hammering sound. At 12.00am Mr So left his house to stay with friends and did not return to his house until Tuesday 15 June at 6.00pm.

13 June 2004

Offence 1

8.14 At about 8.00am rock hammering excavation of CP42 commenced. No complaints had been communicated to Mr Kuipers, and so he continued to rock hammer.

8.15 At about 9.00am Mr and Mrs Blackie heard the same hammering noise in their house which they heard on Saturday 12 June 2004.

8.16 Mr Price, Upline TBM Superintendent employed by Hochtief, inspected the downline section of CP42 at around midday and observed Mr Kuipers and an unidentified excavator operator operating a rock hammer to excavate CP42.

8.17 Mr Price went to inspect the downline TBM and when he returned he observed that Mr Kuipers had broken the TBM conveyor system and stopped rock hammering.

8.18 Messrs Kuipers and Geddes proceeded to rock hammer CP42 throughout the day.

8.19 At about 6pm Mr Geddes finished his shift. At about 7pm Mannix Klinge started his shift and commenced rock hammering the upline section of CP42. Mr Fairburn carried out rock hammering excavation of CP 42 in the downline section of CP42.

8.20 Mr and Mrs Blackie heard the rock hammering noise at their house intermittently throughout the day and night of Sunday 13 June 2004.

Monday 14 June 2004 (Queens’ Birthday – Public Holiday)

8.21 On 14 June 2004 at about 1.00am the hammering noise was still audible in Mr & Mrs Blackie's house. Mrs Blackie called the THJV Complaints Line to report the rock hammering noise.

8.22 At about 1.10am Nathan Menser ( 'Menser' ), Community & Public Relations Officer employed by THJV, received a phone call from Mr Whelan regarding a complaint from Mrs Blackie about a rock hammering noise.

8.23 At about 1.30am Mr Menser contacted Mrs Blackie and told her that he would look into the source of the complaint and see what was happening underground in the mainline tunnels. Mr Menser phoned the upline and downline underground tunnel telephone line system at about 1.30am and spoke to Mannix Klinge. Mr Menser could hear a jack hammering noise in the background and told Mannix Klinge to stop hammering. Mr Klinge stopped hammering and used the grinder. Mr Klinge called the downline side of the tunnel and spoke to an unidentified Kuipers excavator operator, most likely to be Mr Fairburn, and advised them to stop hammering. The downline Kuipers excavator operator stopped rock hammering. Sometime after 1:30am Mr Klinge subsequently called Mr Kuipers to advise him of this complaint.

8.24 Between 1.30am to 1.50am Mr and Mrs Blackie noticed that the rock hammering noise was not audible in their house.

Offence 2

8.25 Mr Schenk inspected CP42 at about 8.00am and did not notice any rock hammering occurring.

8.26 Mr Schenk left the site at about 9.30am. At about 10.00am Mr and Mrs Blackie heard the rock hammering noise inside and outside their house. Mr & Mrs Blackie left the house in the afternoon and when they returned at 4.45pm the rock hammering noise was still audible in their house. Mr and Mrs Blackie did not make a complaint on this occasion.

8.27 At about 6pm, Craig Tucker rang Mr Schenk and told him that the previous night Mr Kuipers was stopped from rock hammering as there had been a complaint.

8.28 Mr Schenk called Mr Kuipers at about 6.00pm and told him not to use the rock hammer again to excavate CP42 in breach of the EPL. Mr Kuipers told Mr Schenk he would not undertake any further rock hammering in CP42.

8.29 Mannix Klinge commenced grinding of the upline section of CP42 at about 7pm.

8.30 It is not known exactly when rock hammering excavation of CP42 ceased. It is estimated to have ceased sometime between 6:00pm and 9.00pm.

8.31 Rock hammering provided an efficient method of excavating the cross passages.

9. Environmental harm

9.1 Rock hammering excavation, relevant to the charges, of CP42 is estimated to have occurred during the hours of approximately:

(a) 8:00am Sunday 13 June 2004 to 1:30am Monday 14 June 2004; and

(b) 10:00am to 6:00pm Monday 14 June 2004.

9.2 Rock hammering of CP42 caused regenerated noise, known as structure-borne noise, in residences above CP42. Regenerated noise is noise that is generated by vibration entering into a building and re-radiating/emitting from the building walls as sound. This is different to airborne noise which can be reduced by closing windows, installing insulation and the like.

9.3 The exact level of regenerated noise audible at residences above CP42 is not known.

9.4 Read the affidavits of Ian James Blackie sworn 28 June 2005; Kevin So sworn 7 July 2005; and Grace Blackie.

9.5 Hochtief provided the EPA with a noise assessment of predicted noise impacts from excavation of cross passages as part of its application to vary the EPL to excavate remaining cross passages in the tunnels. The noise assessment estimated that the excavation of CP42 would cause a predicted regenerated noise level of 43 dBA.

9.6 There were actual effects on three residents residing above the location of the rock hammering. The rock hammering noise caused Mr and Mrs Blackie to be unable to relax in their house during the day of Sunday 13 June 2004 and Monday 14 June 2004. The rock hammering noise affected Mr and Mrs Blackie's sleep during the night of Sunday 13 June 2004 and early Monday 14 June 2004.

Response to the Incident

9.7 Hochtief ceased all rock hammering excavation work in CP42 at about 8.30am Tuesday 15 June 2004 (even though it was permitted under the EPL) to allow Hochtief to investigate the incidents and take appropriate action to ensure that rock hammering of cross passages in the mainline tunnels would be carried out in accordance with the EPL.

9.8 Messrs Schenk, Zimmermann and Kuipers were ordered by Frederick Armstrong, ECRL Construction Manager employed by Thiess, to prepare Incident Reports.

9.9 Mr Kuipers received a verbal warning from Hochtief that his subcontract would be terminated if he disobeyed any instructions from Hochtief personnel.

9.10 On 17 June 2004 Mr Burns convened a disciplinary meeting with Messrs Schenk and Zimmermann in relation to the incident over the long weekend. Mr Schenk received disciplinary counselling from Mr Burns on 17 June 2004 and was required to provide a system of working which ensures that instructions are followed.

9.11 All Site Managers were contacted by Mr Burns to emphasise the necessity to work in accordance with the Minister's Conditions of Approval. To emphasise the need for strict compliance with EPL conditions, Mr Burns arranged for Patrick Holland and John Whitehouse of Minter Ellison to provide training in relation to compliance with regulatory approvals to THJV managers.

10. History of Prior Incidents

10.1 Hochtief AG has a previous conviction for the offence of pollute waters that occurred on 27 October 2003. The incident that was the subject of this conviction arose out circumstances associated with the construction of the ECRL. Hochtief AG was fined $12,000. The maximum penalty for the offence of pollute waters was $250,000.

10.2 Hochtief AG has been issued with one penalty infringement notice for contravening conditions of licence for failure to notify community of tunnel lining works.

11. Actions and Response taken by Hochtief

11.1 Hochtief co-operated with the Prosecutor during the investigation. Hochtief regrets the impact the incident may have had on the environment and the residents.

12. Guilty Pleas

12.1 These proceedings were commenced on 10 June 2005. On 21 June 2005 the Prosecutor served the initiating process together with the first, primary affidavit of David Gathercole and David Featherston on the Defendants' solicitor (in accordance with the Defendants' instructions).

12.2 The Prosecutor served the listed affidavits at the following times:

(a) William Kuipers, Nathan Menser, Grace Blackie, Ian Blackie, and a second affidavit of David Gathercole on 30 June 2005;

(b) Kevin So and Daniel Mattick on 13 July 2005;

(c) Rodney Kent and Tim Orlizki on 16 July 2005;

(d) Dominic Geddes and Mannix Klinge on 21 July 2005; and

(e) Denise Lamont on 25 July 2005.

12.3 The first return date was on the 27 July 2005. On the 27 July 2005, the Prosecutor indicated to the Court that the Prosecutor proposed to file and serve a further affidavit of noise expert, Larry Clarke. The Defendant's solicitor indicated to the Court that the defendant would need six weeks to consider the evidence filed by the EPA and advise the Court of a plea in these proceedings. On 27 July 2005 the Prosecutor was directed to file and serve all affidavit evidence by 10 August 2005 and the proceedings were stood over for plea or mention to 21 September 2005.

12.4 The Prosecutor served the affidavits of Larry Clark and Roberto Pupo on 10 August 2005. On 21 September 2005 the defendant sought time from the Court to consider the evidence filed by the EPA and the proceedings were stood over for plea or mention to 26 October 2005.

12.5 On 26 October 2005 the Defendant entered a guilty plea to matter No. 50021 of 2005 and a not guilty plea to matter No. 50022 of 2005. The proceedings were stood over to 2 November 2005 to set a hearing date.

12.6 On 2 November 2005 the proceedings were listed for hearing in Court on 3 to 24 April 2006 and a pre-trial mention listed for 13 March 2006.

12.7 From before the pleas were entered in November 2005 until March 2006, the defence and prosecution had considerable discussions concerning the matters that were originally before the Court

12.8 On 13 March 2006 the matter was stood over to 17 March 2006 for the Defendant to continue its discussions with the prosecutor.

12.9 On 17 March 2006 the Defendant withdrew its not guilty plea to matter No. 50022 of 2005 and entered a plea of a guilty.

DATED: 7 April 2006

List of Annexures

1. Location plan for CP42 (Drawing No. PRL-CSD110517)

2. Sketch plan of dwelling houses on Abuklea Road and Vimiera Road prepared by David Gathercole.

3. THJV Incident Report.

6 I will not set out the annexures but I have taken them into account. I accept the agreed facts.

7 The prosecution’s case is that the contraventions were intentional because on or about Friday 11 June 2004 an oral arrangement was entered into between Mr Schenk and Mr Kuipers whereby Mr Kuipers would use rock hammers in CP 42 over the long weekend until a complaint was received. The defendant’s case is that the contraventions were not intentional, but only a consequence of failure to adequately supervise the subcontractor, Kuipers Excavations.

The evidence of Mr Kuipers

8 The prosecutor called Mr Kuipers, the managing director of Kuipers Excavations. His evidence included the following.

9 He and his wife are the shareholders of Kuipers Excavations. In mid May 2004 he was approached to do some work in respect of cross-passages on the Epping to Chatswood component of the Parramatta Rail Link Project. He submitted a tender. He understood that his company would be working over the June long weekend on CP 42. That was going to be the longest period of time that the tunnel boring machines in the mainline tunnels would not be working. Consequently, they could have practically full access to the tunnels.

10 He entered into an arrangement with a sub-subcontractor, Charter Contracting, with the result that it was anticipated that his company and the sub-subcontractor would have employees on site.

11 The price that he had tendered and agreed was $340 per cubic metre of materials removed during the excavation. He invoiced monthly. All costs incurred were to be met by his company. He agreed that there was a financial incentive to remove spoil as quickly as he could. He had never done any work before for the defendant or Thiess and saw them as good clients, both separately and as a joint venture. He wanted to impress them and get more work in the future.

12 He met with Mr Schenk on 28 May 2004 when Mr Schenk told him that hammering was only permitted at certain times in particular cross-passages. He was told that excavation could be by rock hammering or grinding. Mr Schenk made clear that a grinder was to be used to fit within the licence conditions and he assured Mr Schenk that grinders would be used. The times for using the hammer and using the grinder were made clear at an induction meeting on 7 June, which was also attended by many of his staff.

13 He testified that a rock hammer could remove spoil approximately twice as fast as a grinder and that it was a more noisy operation. If he was being paid on volume, he could maximise profits by using the rock hammer as opposed to a grinder. His tender was on the basis that he was able to use two 12 tonne excavators in two shifts of 12 hours each whilst working a 24 hour day. As a ball park figure, he expected that this would enable him to remove about 45 cubic metres of spoil over a 24 hour period using a grinder, double that with a hammer.

14 On or about Friday 11 June 2004 he met with Mr Schenk. He was not sure whether Mr Schenk’s immediate superior, Mr Zimmermann, was present. He gave the following evidence:

Q. Doing the best you can, can you tell the Court what was said by you and what was said by either Mr Schenk and Mr Zimmermann, or Mr Zimmermann, in respect of that subject matter?
A. I know - like I’d said to them that I know they wanted us to grind over the weekend because of the restrictions in the use of a hammer, but we only have one grinder so should we proceed, and if we want that cross-passage open allow us to hammer and we will hammer in periods when we believe the noise, the traffic noise and normal daytime noise outside the tunnel would be loud enough not for it to be any inconvenience to anybody. And otherwise we grind and the job wouldn’t be finished over that period.

Q. So you were putting up two alternatives, one was to hammer beyond--
A. Hammer and grind or just grind. Or if we were to only hammer - I think we only had about four hours on Saturday morning that we were allowed to hammer. The rest of the time I think we had to grind the whole period. If we’d grind over that whole period we wouldn’t - it wouldn’t have got done at all with the one grinder, and I doubt whether it would have got done with two grinders.

Q. And that’s a view that you expressed to them?
A. Yes.

Q. What did they say to you - sorry I withdraw that. Did Mr Schenk say anything to you?
A. He probably seemed a little bit more reluctant about it but still it was like yeah well let’s - we’ve got to do it.

Q. Did Mr Zimmermann say anything to you?
A. I can’t remember, honestly.

Q. Was anything said to you during the course of that conversation about complaints?

A. Yes, that if we would go ahead with that - I said if we go - why don’t we go ahead and then if - as soon as we hear our first complaint at all, like whether it be in - whether it be when we first get started or any time through the process, then we know we can be heard, so then we will - we would have to stop. And that’s when the conversation was that yeah, all right, well let’s do it.

15 In cross-examination he said that the discussion at this meeting was primarily with Mr Schenk. He was not sure that Mr Zimmermann was there. He accepted that Mr Zimmermann may not have been present throughout the whole of his discussion with Mr Schenk. The purpose of the meeting was for Mr Schenk to tell him what was to occur by way of work over the long weekend. Mr Schenk outlined to him in the course of the meeting what could and could not be done during that time in terms of hours and the machines that could be used. Mr Schenk impressed upon him that, if possible, it would be desirable for the excavation work to be completed over that long weekend. It was Mr Kuipers who suggested to Mr Schenk that the rock hammer be used until a complaint was made.

16 In re-examination a photocopy of his diary entry of 11 June 2004 at about 5.00 pm was tendered. It states:

Tonight – Brad + Wal M2 Tunnel PRL

13 t + 13 t + DRILL, no 2

grinder but they said OK to push on till we get a call.

17 Brad and Wal were two employees of Kuipers Excavations.

18 Mr Kuipers’ employees engaged in excavation, using the hammer between about 9.00 am and 9.00 pm on Saturday 12 June. The first time that he became aware that there had been a complaint made on the Saturday was well after the long weekend.

19 On Sunday 13 June the hammering commenced again and continued throughout that day and through the night.

20 In cross-examination he agreed that on the Sunday, around midday, Mr Price was inspecting the area around cross-passage 42 at the time when he was rock hammering. He conceded that Mr Price may have told him to stop hammering and use the grinder. His recollection was that he told Mr Price that he had had a discussion with Mr Schenk and Mr Zimmermann, to the effect that hammering would stop when a complaint came through.

21 At about 1 am on Monday 14 June he received a telephone call to say that a complaint had been received and to stop hammering. Hammering was stopped. Work continued by grinding until about 8 am on the Monday morning. Between about 8 am and 9 am on the Monday morning, he received a telephone call from someone asking whether he needed to hammer for much longer. He replied that if they could continue hammering until about 6 to 8 pm that night, they should have it finished by then. The person on the telephone agreed. Mr Kuipers agreed that in a record of interview in November 2004 (which is not in evidence) he said that it was Mr Menser to whom he spoke. Mr Kuipers then went below to CP 42 and saw that a machine had started to hammer. Hammering proceeded throughout the day until about 6:00 pm. At this time, vehicles could be moved through CP 42 if they needed to be.

22 In his opinion, there was no way the job could have been completed over the long weekend without hammering.

23 As to the defendant’s representatives on site over that long weekend, he said:

(a) on the Saturday he was pretty sure that Mr Price, Mr Schenk and maybe Mr Aitken were there. In cross-examination he was not 100 percent sure that he saw Mr Price on the Saturday.
(b) on the Sunday he could not recall precisely who was there but said it was more than likely that Mr Schenk, Mr Price or Mr Aitken were there. In cross-examination he said he was not sure that he saw Mr Schenk or Mr Zimmermann in the tunnel;
(c) on the Monday he saw Mr Aitken and may have seen Mr Schenk there at a time when there was rock hammering going on. In cross-examination he said he was pretty sure that he saw Mr Aitken on the surface and that he saw Mr Schenk in the tunnel.

24 In cross-examination he said that Mr Price was the only one of the defendant’s employees who he was certain saw him rock hammering over the long weekend. He agreed that he could not say with any certainty which of Mr Aitken, Mr Price, Mr Zimmermann or Mr Schenk he saw on any of the three days over the long weekend. They were all there, but he could not recall who was there on any specific date.

25 Mr Kuipers said that the agreement with Mr Schenk was that they would stop once a complaint was made. They did stop at 1:00 am or 1:30 am on the Monday morning, as soon as a complaint came through. However, later that morning the hammering started again, before he returned to the tunnel after being on the surface.

26 The defendant submitted that I should not accept, beyond reasonable doubt, Mr Kuipers’ evidence as to the alleged arrangement with Mr Schenk. Later in this judgment I explain why I do not accept this submission and why I accept Mr Kuipers’ evidence.

The evidence of Mr Schenk

27 Mr Schenk was to be called as a witness by the defendant and was to be brought from Germany, where he now resides, for that purpose. However, he became ill a couple of days before the hearing and was unable to travel to Australia.

28 In those circumstances I admitted into evidence under the Evidence Act 1995, s 65(8) a record of interview with Mr Schenk, which was conducted by officers of the Department of Environment and Conservation on 9 March 2005. I declined to accede to the prosecutor’s application to exercise my discretion to refuse to admit the evidence under s 135. Consequently, Mr Schenk’s evidence, in his record of interview, was unsworn and could not be tested in cross-examination.

29 His record of interview included the following.

30 Mr Schenk told Mr Zimmermann that they would do a daily check of the works over the long weekend. He proposed that Mr Aitkin do the daily check on the Saturday, Mr Price on the Sunday and Mr Schenk on the Monday. The hammering works were checked by Mr Aitken on the Saturday morning and again by himself at about noon. The next time he went into the tunnel was on Monday morning at about 8:30 am, at which time he saw that the excavation had broken through.

31 On the Monday morning, he had a conversation with Mr Kuipers on the surface at about 8 am. He was told by Mr Kuipers that at about 1:30 am that morning they were instructed to stop hammering. That was the first time Mr Schenk was aware of any hammering on this weekend outside the allowed hours. He asked Mr Kuipers “Why did you hammer at this time?” Mr Kuipers said that it was because he thought it was not audible and to get the job done as good and as fast as he could. He told Mr Kuipers “You know it’s against the agreement”. Mr Kuipers said that he had been told during the night that they had to stop hammering but that they could continue grinding.

32 On the Monday evening he received a call from the defendant’s environmental department, who told him to have a word with Mr Kuipers to tell him not to hammer again that night. Mr Schenk called Mr Kuipers and told him “Don’t hammer again and breach our agreement again”.

33 Mr Schenk spoke to Mr Kuipers again on the Tuesday morning and asked him why he had hammered over the long weekend several times outside the allowed hours. Mr Kuipers said “I wanted to finish the cross-passage and I was thinking that it’s not audible, I can do it. Because it’s not audible there can’t be a complaint”. Mr Schenk told him straight away “You are aware of the rules, of the conditions. It’s clearly in breach of our agreement”. Mr Schenk’s expectation, or hope, was that they could finish the cross-passage over the long weekend, but he was not sure that that was possible. By hammering only on the Saturday between 8:00 am and 1:00 pm, he saw a minimum chance to get it completed over the long weekend. He expected that he would be contacted if a complaint came in about CP 42 works over the long weekend.

34 I make the following observations. First, the statements which Mr Schenk alleged that Mr Kuipers made to him on the Monday morning and the Tuesday, if accepted, constitute admissions by Mr Kuipers that he was on a frolic of his own in hammering outside the hours permitted by the licence over the long weekend. Second, these alleged statements were not put to Mr Kuipers in cross-examination. Third, the record of interview is unsworn and Mr Schenk could not be tested in cross-examination. In all the circumstances, I do not propose to give his evidence significant weight where it is in conflict with that of Mr Kuipers. I explain this further later in the judgment.

The evidence of Mr Price

35 Mr Price was called in the defendant’s case. His evidence included the following.

36 At the time of the June 2004 long weekend he was employed by the defendant as general superintendent in charge of the tunnel boring machines and taking care of the cross-passages. His supervisor was Mr Schenk.

37 He did not work on the Saturday of the long weekend. He called into the site on the Sunday. Shortly after 11:00 am on the Sunday he was at CP 42 and saw that they had a hammer on the machine. He told Mr Kuipers that he must take off the hammer and put on the grinder because those were the rules. Mr Kuipers said “Until that telephone rings on the wall I will be hammering”. Mr Price said that those were not the rules; that the rules were that he put the pineapple on (“pineapple” is a term for a grinder). Mr Price then moved off to check a tunnel boring machine. He came back to CP 42 and the machine had stopped for repairs. He told Mr Kuipers to stop all works while the repair was carried out and that from there on in grinder works only were to be carried out.

38 In cross-examination, Mr Price said that he understood that the hammer could only be used over the long weekend on Saturday between 8:00 am and 1:00 pm. A telephone line was set up next to CP 42 prior to the long weekend. It was the mechanism by which complaints from the surface would be conveyed to the operators. Such complaints might relate to work permitted by the terms of the licence.

39 The joint venturers had engaged the services of another two sub-contractors prior to Mr Kuipers coming on site. Problems had been experienced with them, one of which was that they were not proceeding to put in the cross-passages at a sufficiently fast rate. That was one of the very reasons why it was sought to engage the services of Mr Kuipers’ company.

40 Mr Price testified that, as a practical person, he knew very well that CP 42 was never going to be completed over the long weekend using grinders, or even rock hammers. He could not recall whether Mr Schenk thought that Mr Kuipers might be able to finish the job completely over the weekend. He thought Mr Kuipers himself thought he could do so.

41 When he visited CP 42 on the Sunday morning, he thought it was good that they were not using hammering machines, because they were adhering to the licence. He gave the following significant evidence concerning his conversation on this occasion with Mr Kuipers:

Q: Didn’t he also suggest to you that he had an arrangement with Mr Schenk whereby he was to continue until the telephone rang?

A: No he never mentioned Mr Schenk. He said to me the agreement is until the telephone rings on the wall I keep hammering, I said well I know nothing about this agreement and I advise you to take the hammer off.

Q: He certainly mentioned that he had an agreement whereby he could do that?

A: That was the understanding yes. But I have no party to any agreement.

42 He also gave the following evidence as to this conversation:

Q: One of the things he put to you, or the only thing he put to you was that he had this arrangement that he could keep going until the telephone rang?

A: Yeah but he can tell me he had arrangement but I knew nothing about the arrangement.

43 He accepted that as the general superintendent, he could issue instructions to Mr Kuipers, who would be obliged to follow them. He was asked in cross-examination whether it was pretty extraordinary for a subcontractor to, in effect, tell the general superintendent to get lost when an instruction was given. His response was that it was not put in so many words as to tell him to get lost.

44 When Mr Price returned to CP 42 after his initial discussion there on the Sunday morning, the hammering appeared to have ceased. From his past experiences in previous cross-passages, and as a gentleman, he hoped that Mr Kuipers would abide by his wishes, something which obviously didn’t happen.

45 He agreed it was a little odd that the complaint received by Mr Zimmermann on the Saturday morning was never conveyed to him. His explanation for this was that Mr Zimmermann must have felt he could deal with it alone. The normal course of action on this project was that any complaints made would be conveyed to, amongst others, the general superintendent.

46 I accept Mr Price’s evidence.

The evidence of Mr Zimmermann

47 Mr Zimmermann was called in the defendant’s case. His evidence included the following.

48 In June 2004 he was the tunnel boring machine manager with direct responsibility to supervise Mr Schenk. One of his responsibilities was for the excavation of the cross-passages.

49 On Friday 11 June 2004 he entered Mr Schenk’s office and found that Mr Kuipers was present. There was a conversation in his presence between Mr Schenk and Mr Kuipers, in which Mr Schenk indicated that on Saturday Mr Kuipers could hammer until 1:00 pm, after which time hammering had to cease and they had to grind. He heard no discussion to the effect that Mr Kuipers could rock hammer outside the allowed hours, or, in particular, that he could hammer outside the allowed hours until a complaint was made. He did not recall whether he left the office before Mr Kuipers left. While he was there he heard nothing that would have suggested an agreement between Mr Schenk and Mr Kuipers for rock hammering outside the allowed hours.

50 In his opinion, the work was not behind schedule. After the long weekend they had at least another two weeks to complete the excavation of CP 42.

51 On the Saturday of the long weekend Mr Zimmermann was at the site. He received knowledge of a noise complaint relating to rock hammering around noon from their community relations officer, Mr Peat. He agreed that Mr Peat would call the complainant back and inform him that the work was going to cease at a quarter to one and that he shouldn’t worry. In cross-examination, he said he did not tell Mr Kuipers that a complaint had been received, nor did he tell the general superintendent, Mr Price. The reason for this was that the complaint was received inside the allowed hours of hammering, so he didn’t see any necessity to inform them. Normally when complaints are received on a project of this sort, he would convey them to the persons who were making the noise. He did not consider it necessary to do so on this occasion.

52 He said in cross-examination that telephone lines were set up next to CP 42 because if there was a complaint received within the allowed hours, they were obliged to contact the contractor and let him know that a complaint had been received. It was put to him that that was a lie, because that was exactly what he did not do when he received the complaint on the Saturday morning. Mr Zimmermann said that he did not pass on the complaint in this case because there were only 45 minutes to go until 1 pm. I note that this does not accord with the Agreed Facts, paragraph 8.8, which states that Mr Zimmermann received the complaint at about 11:30 am.

53 He said that he did not believe that the works in respect of CP 42 would be completed over the long weekend. He agreed that it was very difficult to work on the cross-passages whilst the tunnel boring machine was operating and that they would not do it. The tunnel boring machine was not operating over the long weekend.

54 He said that the performance of a previous sub-contractor, who was doing the work ultimately done by Mr Kuipers, was not very good because they were falling behind schedule. They were terminated before Mr Kuipers was brought on site.

55 I have some reservations about the reliability of Mr Zimmermann’s evidence in all respects, having regard to what I thought was a rather unsatisfactory explanation of why he did not pass on the Saturday complaint to Mr Kuipers and Mr Price; and the latter’s evidence on that point. I accept that Mr Zimmermann was present for part of the significant meeting between Mr Schenk and Mr Kuipers on the Friday. I have concluded that he was not present when the arrangement between Mr Schenk and Mr Kuipers was struck at that meeting.

The evidence of Mr Menser

56 Mr Menser was called in the prosecutor’s case. He was the joint venturers’ community and public relations officer. He gave oral evidence substantially to the effect of paragraphs 8.22 and 8.23 of the Agreed Statement of Facts set out above in relation to the events in the early hours of the Monday morning. He did not recall speaking to anybody else on the Monday in regard to the project. He was not aware of the complaint made on the Saturday until the following Tuesday.

57 In cross-examination, he said that he was out of Sydney over the long weekend. He had no recollection of telling Mr Kuipers between 7 and 9 am on the Monday morning that he could continue hammering until 6 or 7 that night to get the job done. He did not believe that he could have forgotten such a conversation. He had no authority to give such approvals.

58 I accept Mr Menser’s evidence.

E-mails

59 There are e-mails in evidence between officers of the defendant or the joint venturer between 3 June 2004 and 10 June 2004 (Exhibits E, F, and 2).

60 The prosecutor submitted that an e-mail of 8 June 2004 from Philippa Curran to Craig Tucker was incriminating. It stated: “subcontractor came to check hours he can work in x passage 42 Based on Fred’s email he can hammer from 6 pm friday 24 hrs? he needs to organsie [sic] gear tomrrow [sic], can you confirm nothing has changed since we discussed it last. What happens if we get complaints? i assume we need contact phone numbers to get them to stop etc”. I agree that this e-mail is incriminating if subsequent e-mails are not read. However, subsequent e-mails indicate that the first question expressed in it was not answered in the affirmative. On the contrary, an e-mail of Thursday 10 June 2004 from Craig Tucker to Mr Schenk stated, among other things:

For CP 42 we can operate with rock hammers from 7am to 6pm Monday to Friday (excluding Public Holiday Monday) and from 8am to 1pm on any Saturday. After this we can excavate (excluding hammering) in the tunnels as long as there is no audible noise at any residences above. This would mean that the pineapple technique should meet this condition.

If however we get any complaints about noise outside of the normal construction hours associated with the pineapple we will need to stop. Can you please advise what method of communication you will have to be able to cease the excavation if necessary?

61 The reply from Mr Schenk later that day was that they would install a telephone at CP 42 with a flashing light on it. The last paragraph stated:

CP 42 we can only excavate without interruption of the TBM production on that long weekend. Before we stop the works we should have confirmation that the reason for complaint is the CP Excavation (and not vehicles from the street or anything else what

might create noise) and the noise is audible. Please let me know, what is the procedure in that case.”

62 This evidences, I think, that Mr Schenk thought that the long weekend presented a particularly good opportunity to excavate CP 42 without interruption, and that there should be no stopping of work because of a complaint, unless there was confirmation that the reason for the complaint was the CP 42 excavation. Beyond that, in my view, the e-mails do not significantly advance the prosecutor’s case.

The prosecutor’s submissions

63 The prosecutor submitted that I should find beyond reasonable doubt that the offences were intentional because there was an arrangement between Mr Schenk and Mr Kuipers that he would continue to hammer outside the licensed hours until a call was received on the telephone at CP 42. Reliance was placed on the evidence of Mr Kuipers as to the arrangement; his diary entry; the evidence of Messrs Kuipers and Price as to their Sunday morning conversation; the failure of Mr Zimmermann to pass on Mr So’s Saturday complaint; Mr Kuiper’s evidence that he was told to proceed on the Monday morning; and the fact that Mr Schenk saw on the Monday morning that CP 42 had been broken through and (it was submitted) must then have known that hammers had been used.

The defendant’s submissions

64 The defendant submitted that the Court should not find beyond reasonable doubt that there was any agreement between Mr Kuipers and Mr Schenk that Mr Kuipers would carry on hammering beyond 1:00 pm on the Saturday until a noise complaint was received. It was also submitted that the Court should not find beyond reasonable doubt that it was critical to the joint venture that the excavation works on CP 42 be completed over the long weekend. I accept the last submission that it was not “critical”, although I think that Mr Schenk hoped or expected that, with hammering, CP 42 would be completed over the long weekend.

65 The defendant criticised Mr Kuipers’ evidence as being uncertain as to who was present at the site, and when they were on the site, on any particular day; as to who said what and at what time; and as to whether Mr Zimmermann was present at the time of the alleged conversation with Mr Schenk, when the arrangement was allegedly made. There is substance in that submission.

66 The defendant submitted that, overall, Mr Kuipers was an unreliable witness, upon whose evidence no reliance could be placed beyond reasonable doubt. I do not accept that submission. It is true that he was uncertain in the respects mentioned above, however, my overall impression is that he was a reliable witness. The defendant submitted that Mr Kuipers had every motive to rock hammer until a complaint was made for his own benefit, in order to maximise his own profits and impress a large corporate client, from whom he was hoping to obtain work over a long period of time. I accept that he had a financial motive to hammer until a complaint was made. The existence of a motive of itself, however, does not establish that he was on a frolic of his own in hammering. I do not think it would have impressed a large corporate client, from whom he was hoping to obtain future work, if he had defied instructions to hammer within the times permitted by the licence. The defendant submitted that Mr Kuipers’ diary entry takes the matter no further given that it was a self-serving entry. Every corroborative diary entry is self-serving. But that is not a reason, of itself, to give it no weight. I further consider the matter of the diary entry later in this judgment. The defendant submitted that the evidence of Mr Kuipers was to be contrasted with the oral evidence of Messrs Price and Zimmermann who, it was submitted, the Court would readily accept as witnesses of truth beyond any doubt. I have previously stated my assessment of Messrs Price and Zimmermann as witnesses.

67 The defendant submitted that Mr Kuipers ignored Mr Price’s command to stop hammering on the Sunday. I do not think that that submission gives sufficient weight to the circumstance that, in their discussion on the Sunday, Mr Kuipers told Mr Price that there was an arrangement that he could continue hammering until the telephone rang.

68 The defendant submitted that Mr Menser was firm in saying that he did not approve Mr Kuipers continuing with rock hammering on the Monday, yet Mr Kuipers, in his record of interview, asserted Mr Menser had given such approval. In evidence, Mr Kuipers indicated that he presumed that the person who told him by phone that he could continue hammering on the Monday was Mr Menser. I accept Mr Menser’s evidence that it was not he. Mr Kuipers was, therefore, in error in his assumption and in his record of interview as to the identity of that person. This is a factor which weighs against the reliability of Mr Kuipers’ evidence. However, in all the circumstances, it is not sufficient to cause me to have a reasonable doubt as to the reliability of Mr Kuipers’ evidence concerning his arrangement with Mr Schenk.

69 The defendant submitted that the only inference that can be drawn from Mr Schenk’s record of interview is that there was no such arrangement as suggested by Mr Kuipers for hammering outside the licence hours. I accept that that is the effect of Mr Schenk’s record of interview. However, as explained elsewhere in my judgment, I regard that evidence as being of relatively little weight. The defendant submitted that the e-mails from Mr Tucker to Mr Schenk and Mr Schenk’s reply to Mr Tucker on 10 June 2004 support the conclusion that there was no such arrangement between Mr Kuipers and Mr Schenk. I agree that these e-mails of 10 June 2004 do not record or establish an intention to enter into such an arrangement. However, the alleged arrangement was made subsequently, at Mr Kuipers’ initiative, in his discussion with Mr Schenk.

70 The defendant submitted that either Mr Kuipers misunderstood what was said to him on the Friday by Mr Schenk, or that he lied. In support of the misunderstanding theory, reliance was placed on the e-mails of 10 June, which contemplated that if a complaint were received when the grinder (“pineapple”) was being (lawfully) used, work should stop. As I understood it, the defendant’s submission was that this may have been communicated to Mr Kuipers and mistakenly interpreted by him to mean that he could use the hammer (unlawfully) until a complaint was received. I do not think that there was a misunderstanding. I also do not believe that Mr Kuipers lied. I believe that he told the truth.

Conclusion

71 I am satisfied beyond reasonable doubt that on Friday 11 June 2004 Mr Schenk and Mr Kuipers made an oral arrangement that Mr Kuipers would use rock hammers over the following long weekend until a complaint was received. The contraventions of the licence provisions were therefore intentional. My reasons are as follows.

72 First, I believe the evidence of Mr Kuipers to this effect. He impressed me as a careful and truthful witness, who answered questions frankly. He made appropriate concessions in cross-examination. He conceded that Mr Price had asked him to stop hammering on the Sunday morning; that he was not certain that Mr Zimmermann was present when the arrangement was struck with Mr Schenk; and that he had a financial interest in excavating as much spoil as possible over the long weekend. Mr Zimmermann was not present throughout the whole of the discussion between Mr Schenk and Mr Kuipers. I am prepared to accept that the arrangement was made while Mr Zimmermann was not present.

73 Second, Mr Kuipers’ diary entry of 11 June 2004 is consistent with his oral evidence as to the arrangement, particularly the words “but they said OK to push on till we get a call”. It is true, as the defendant submitted, that it is also consistent with being told to push on in accordance with the licence conditions until a call was received. But there is no evidence that that was what Mr Schenk was told to do.

74 Third, as both Mr Kuipers and Mr Price testified, he indicated to Mr Price on the Sunday morning that he had an arrangement whereby he could continue hammering until a complaint was received. Unless this were true, I think it is highly unlikely (a) that he would have said this to Mr Price; (b) that he would not have followed Mr Price’s instruction not to use the hammer; and (c) that he would have been hammering in defiance of the licence conditions about which he had been instructed, thereby jeopardising his future relationship with the joint venturers, which he was keen to build up. Mr Price agreed that it would be very odd for a subcontractor to behave in that way. But it was not odd if the alleged arrangement existed. I do not accept that anything was said to Mr Kuipers prior to the long weekend which might have caused him mistakenly to think that he could hammer until a complaint was received. That suggests that his communication to Mr Price that there was such an arrangement was either true, or a lie. My impression of Mr Kuipers as a witness was that he was truthful. I think that he told Mr Price the truth.

75 Fourth, I give relatively little weight to Mr Schenk’s contrary record of interview because it was not on oath and he was not able to be tested in cross-examination. Where his evidence conflicts with Mr Kuipers’ evidence, I prefer Mr Kuipers’ evidence.

Legal principles

76 The Protection of the Environment Operations Act 1997, s 64(1) provides that if any condition of a licence is contravened by a person, each holder of the licence is guilty of an offence. According to this provision, the maximum penalty for such an offence (where the offence relates exclusively to noise), in the case of a corporation, is $60,000 and, in the case of a continuing offence, a further maximum penalty of $6,000 may be imposed for each day the offence continues.

77 Section 241 provides that the court must take into consideration certain matters in imposing a penalty:

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

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

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

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

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

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

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

78 In addition, the Crimes (Sentencing Procedure) Act 1999, s 22 provides that a court “must” take a guilty plea and its timing into account and “may” accordingly impose a lesser penalty than otherwise:

(1) In passing sentence for an offence on an offender who has pleaded guilty to the offence, a court must take into account:

(a) the fact that the offender has pleaded guilty, and

(b) when the offender pleaded guilty or indicated an intention to plead guilty,

and may accordingly impose a lesser penalty than it would otherwise have imposed.

(2) When passing sentence on such an offender, a court that does not impose a lesser penalty under this section must indicate to the offender, and make a record of, its reasons for not doing so.

(3) Subsection (2) does not limit any other requirement that a court has, apart from that subsection, to record the reasons for its decisions.

(4) The failure of a court to comply with this section does not invalidate any sentence imposed by the court.

79 Section 21A requires the court to take into account aggravating, mitigating and other factors in sentencing; and ss 22A and 23 empower the court to impose a lesser penalty than otherwise for pre-trial disclosures and for assistance provided to law enforcement authorities.

80 The defendant’s guilty pleas served as an admission of the essential elements of the offences: R v O’Neill [1979] 2 NSWLR 582 at 588. In sentencing, the court may not take facts into account in a way that is adverse to the interests of the defendant, unless those facts have been established beyond reasonable doubt. If there are circumstances which the court proposes to take into account in favour of the defendant, it is enough that they be proved on the balance of probabilities. The defendant bears the burden of proving matters submitted in mitigation. See R v Olbrich (1999) 199 CLR 270 at 281.

81 In R v Thomson (2000) 49 NSWLR 383 at 419 [160] the Court of Criminal Appeal adopted the following guideline in the case of a plea of guilty:

The Court should adopt the following guideline applicable to offences against State laws:

(i) A sentencing judge should explicitly state that a plea of guilty has been taken into account. Failure to do so will generally be taken to indicate that the plea was not given weight.

(ii) Sentencing judges are encouraged to quantify the effect of the plea on the sentence in so far as they believe it appropriate to do so. This effect can encompass any or all of the matters to which the plea may be relevant — contrition, witness vulnerability and utilitarian value — but particular encouragement is given to the quantification of the last-mentioned matter. Where other matters are regarded as appropriate to be quantified in a particular case, for example, assistance to authorities, a single combined quantification will often be appropriate.

(iii) The utilitarian value of a plea to the criminal justice system should generally be assessed in the range of 10-25 per cent discount on sentence. The primary consideration determining where in the range a particular case should fall, is the timing of the plea. What is to be regarded as an early plea will vary according to the circumstances of the case and is a matter for determination by the sentencing judge.

(iv) In some cases the plea, in combination with other relevant factors, will change the nature of the sentence imposed. In some cases a plea will not lead to any discount.

82 The reason that a discrete discount is explicitly allowed for pleas of guilty, particularly early pleas, is that this encourages pleas, with consequential benefits for the criminal justice system as a whole. As was said in Thomson at 415 [135]: “the significant public interests served by encouraging early pleas are such as to justify this Court indicating to the participants in the criminal justice system the extent to which benefits will accrue for an early plea, particularly from the perspective of the utilitarian considerations”. It was pointed out at 411-412 [115] that “The benefits to the criminal justice system as a whole, which flows [sic] from a plea of guilty, particularly an early plea of guilty, are not related to the circumstances of the offence or to the conduct of the offender. Such benefits flow from an act by the offender that is not directly related to any of the multifarious objectives designed to be served by the sentencing process: deterrence, rehabilitation, punishment, etc. Rather, they are collateral benefits for the efficiency and effectiveness of the criminal justice system as a whole, which require acknowledgment of some character by way of an incentive, so that the benefits will in fact be derived by the system”.

83 Generally, the timing of a plea of guilty is the primary consideration determining the utilitarian benefit of a guilty plea and, therefore, where in the discount range a particular case should fall. But it is not the only consideration. Other considerations are complexity of issues; difficulty in assembling evidence; and the potential length and complexity of a fully contested trial. In the present case these other considerations do not seem to be as weighty as in some other criminal cases, including criminal cases outside the jurisdiction of this Court. These other considerations were identified in Thomson (above) at 418 [154] – [158], where it was said:

154. There are however two circumstances which will generally affect the appropriate level of discount in a particular case:

(i) The time at which a plea is entered. A plea entered at committal has a more significant utilitarian benefit than a plea entered at first listing, which in turn has the greater benefit than a plea entered at the beginning of trial.

(ii) The complexity of the issues about which evidence will have to be gathered and adduced affects the value of the plea. The greater the difficulty of assembling the relevant evidence and the greater the length and complexity of the trial, the greater the utilitarian value of a plea.

155. The top of the range would be expected to be restricted to pleas at the earliest possible opportunity and should not be given, save in an exceptional case, after a matter has been set down for trial. A discount towards the bottom of the range is appropriate for late pleas, for example, on the date fixed for trial, unless there are particular benefits arising from the prospective length and complexity of the trial.

156. Rare cases involving exceptional complexity and trial duration may justify a higher discount. In some cases no discount is appropriate at all. In some cases the “discount” will be reflected in a step down in the hierarchy of sentencing options.

157. There are circumstances in which the protection of the public requires a long sentence to be imposed so that no discount for the plea is appropriate: see, eg, R v Stabler (1984) 6 Cr App R (S) 129 at 131; R v Costen (1989) 11 Cr App R (S) 182 at 184.

158. There are crimes that so offend the public interest that the maximum sentence, without any discount for any purpose, is appropriate. This includes situations in which a life sentence can be and is imposed, notwithstanding the plea: see, eg, R v Kalache [2000] NSWCCA 2; see especially per Sully J (at [38]-[42]).

84 There has been a lively divergence of opinion in the High Court as to whether the sentencing process should be based on the “instinctive synthesis” method or the “two-tier” method. The former has been favoured by McHugh J and the latter by latter Kirby J. The latest High Court case on this point is Markarian v The Queen (2005) 79 ALJR 1048, where McHugh J at 1059 [51] explained the difference between the two methods as follows:

By two-tier sentencing, I mean the method of sentencing by which a judge first determines a sentence by reference to the ‘objective circumstances’ of the case. This is the first tier of the process. The judge then increases or reduces this hypothetical sentence incrementally or decrementally by reference to other factors, usually, but not always, personal to the accused. This is the second tier. By instinctive synthesis, I mean the method of sentencing by which the judge identifies all the factors that are relevant to the sentence, discusses their significance and then makes a value judgment as to what is the appropriate sentence given all the factors of the case. Only at the end of the process does the judge determine the sentence.

85 The joint judgment of Gleeson CJ, Gummow, Hayne and Callinan JJ in Markarian must be the one that guides the sentencer. Their judgment maintains an uneasy, unclear truce between the intuitive synthesis and two-tier methods. They did clearly hold that there is no error simply because the sentencer quantifies the discount made, for example, on account of the offender’s plea of guilty or assistance to authorities (at [24]). On the other hand, they held that except in a simple case, “sentencing courts may not add and subtract item by item from some apparently subliminally derived figure, passages of time in order to fix the time which an offender must serve in prison” (at [39]). They said:

[24] Neither the conclusion that a sentencer has reasoned sequentially, nor the observation that a sentencer has quantified the allowance made, for example, on account of the offender's plea of guilty, or the offender's assistance to authorities, of itself, reveals error…

…

[27] Express legislative provisions apart, neither principle, nor any of the grounds of appellate review, dictates the particular path that a sentencer, passing sentence in a case where the penalty is not fixed by statute, must follow in reasoning to the conclusion that the sentence to be imposed should be fixed as it is. The judgment is a discretionary judgment and, as the bases for appellate review reveal, what is required is that the sentencer must take into account all relevant considerations (and only relevant considerations) in forming the conclusion reached. As has now been pointed out more than once, there is no single correct sentence. And judges at first instance are to be allowed as much flexibility in sentencing as is consonant with consistency of approach and as accords with the statutory regime that applies…

…

[35]

The appellant's next submission invited the Court to reject sequential or two-tiered approaches to sentencing taking as their starting point the maximum penalty available, and to state as a universal rule to the extent that legislation does not otherwise dictate, that a process of instinctive synthesis is the one which sentencing courts should adopt.

[36] No universal rules can be stated in those terms. As was pointed out earlier, much turns on what is meant by a ‘sequential or two-tiered’ approach and, likewise, the ‘process of instinctive synthesis’ may wrongly be understood as denying the requirement that a sentencer give reasons for the sentence passed. So, too, identifying ‘instinctive synthesis’ and ‘transparency’ as antonyms in this debate misdescribes the area for debate.

[37] In general, a sentencing court will, after weighing all of the relevant factors, reach a conclusion that a particular penalty is the one that should be imposed…

[39] …Following the decision of this Court in Wong it cannot now be doubted that sentencing courts may not add and subtract item by item from some apparently subliminally derived figure, passages of time in order to fix the time which an offender must serve in prison. That is not to say that in a simple case, in which, for example, the circumstances of the crime have to be weighed against one or a small number of other important matters, indulgence in arithmetical deduction by the sentencing judges should be absolutely forbidden. An invitation to a sentencing judge to engage in a process of ‘instinctive synthesis’, as useful as shorthand terminology may on occasions be, is not desirable if no more is said or understood about what that means. The expression ‘instinctive synthesis’ may then be understood to suggest an arcane process into the mysteries of which only judges can be initiated. The law strongly favours transparency. Accessible reasoning is necessary in the interests of victims, of the parties, appeal courts, and the public. There may be occasions when some indulgence in an arithmetical process will better serve these ends. This case was not however one of them because of the number and complexity of the considerations which had to be weighed by the trial judge.

86 Maximum penalties provide sentencing yardsticks and invite comparison between the worst possible case and the case before the Court. The joint judgment in Markarian held:

[30]

Legislatures do not enact maximum available sentences as mere formalities. Judges need sentencing yardsticks. It is well accepted that the maximum sentence available may in some cases be a matter of great relevance. In their book

, Stockdale and Devlin [27] observe that:

‘A maximum sentence fixed by Parliament may have little relevance in a given case, either because it was fixed at a very high level in the last century or because it has more recently been set at a high catch-all level. At other times the maximum may be highly relevant and sometimes may create real difficulties. A change in a maximum sentence by Parliament will sometimes be helpful [where it is thought that the Parliament regarded the previous penalties as inadequate].’

[31]

It follows that careful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick. That having been said, in our opinion, it will rarely be, and was not appropriate for Hulme J here to look first to a maximum penalty, [28] and to proceed by making a proportional deduction from it. That was to use a prescribed maximum erroneously, as neither a yardstick, nor as a basis for comparison of this case with the worst possible case…

[32]…True it is that his Honour did not overlook the objective facts, or indeed any other matters relating to penalty, but having started where he did, at a maximum, and then making deductions from it, he did not make, even in a provisional way, an assessment of the sentence called for by the objective facts. It might or might not be appropriate for a trial judge to state such a provisional view. A judge would rarely be in error in not doing so. It is, after all, a provisional position only.

87 Following Markarian, the Thomson guideline for guilty pleas has continued to be applied and upheld by the NSW Court of Criminal Appeal. For instance, in R v MacBain [2005] NSWCCA 358, the Court of Criminal Appeal considered a situation where the trial judge had allowed a 25 percent discount on sentences that he otherwise would have imposed, in recognition of the utilitarian value of early pleas of guilty. The trial judge did not expressly record a discrete discount relating to the factor of remorse. The Court of Criminal appeal held that there was no error in that approach. Another example is Moore v R [2005] NSWCCA 407, where the trial judge gave the accused a discount for an early plea of guilty, and a further 35 percent discount for surrendering himself to the police, allowing a total discount of 60 percent on the sentence which he otherwise would have received. The Court of Criminal Appeal, after referring to Markarian, dismissed the accused’s appeal. It was held that the trial judge did not follow an unduly mathematical approach to sentencing, and had made clear that he was concerned, when applying discounts, to ensure that the end result produced an adequate sentence when looked at against the whole of the facts, rather than a simple mathematical answer.

88 The cri de coeur of Sully J in R v Otto [2005] NSWCCA 333 [44] is that appellate jurisprudence in this area has had the “morale-sapping tendency” of ensuring that primary sentencing judges can be confident of one matter only: irrespective of how they choose to apply the guideline judgment in Thomson, their sentence is bound to be set aside on the grounds of its misapplication. In his Honour’s view, to lay out mathematical calculations is to play “forensic games”, which should be eschewed in favour of the instinctive synthesis method. He was in dissent, but he summed up the problem rather well at [44] – [45]:

44 Indeed, appellate jurisprudence in this area has, in my own respectful view, consistently reinforced that morale-sapping tendency. If a sentencing Judge does not give the Mr. Ottos of this world an immediate and express 25 per cent off, then the odds are that the sentence will be set aside. If the Judge does give that immediate and express 25 per cent off, then the odds are that the sentence will still be set aside because the starting point for the application of the 25 per cent was too high according to some imaginative mathematical hypothesis.

45 If the Judge states factors thought to be relevant, and then instinctively synthesises them as the method producing a final outcome, it will be said that he was not, or not sufficiently, transparent and accountable. If the Judge eschews the instinctive synthesis approach, then the more precisely transparent the reasoning, the greater the conversion of an art into a mathematical exercise which is grid sentencing by another name.

89 Markarian has been considered in a number of cases in other states. In Tasmania, in Dennison v Tasmania [2005] TASSC 54, the Court of Criminal Appeal did not consider that Markarian prevented the court from adopting a two-stage approach in deciding a prisoner’s sentence. In South Australia, the decision of the Court of Criminal Appeal in R v Sladic (2005) 92 SASR 36 indicated that Markarian does not prevent a court from specifying a first-stage starting point and thereafter making arithmetical deductions in respect of more than one factor. The sentencing judge there identified a notional starting point of six years imprisonment and made a reduction of one quarter for the early pleas, and then a further reduction of one year, by reason of police pressure or inducement. In the Court of Criminal Appeal, Markarian was relied upon as supporting the view that it is “the overall outcome which the appellate court must consider… rather than any predetermined approach to reductions”, and no error was found in the approach of the sentencing judge. In Western Australia, the Court of Appeal in Chivers v Western Australia [2005] WASCA 97 confirmed the right of a sentencing judge to apply a discount for a plea of guilty, notwithstanding Markarian. For a review of Markarian and these cases see Warner (2005) 29 Crim LJ 355. For a review of the law prior to Markarian see Traynor and Potas, “Sentencing Methodology: Two-Tiered or Instinctive Synthesis?”, Sentencing Trends and Issues (25) December 2002 1.

90 Any fine should be such as will make it worthwhile that the cost of precautions be undertaken. In Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 Mahoney J said:

But I believe legislation of this kind contemplates that, in general, the cost of preventing pollution will be absorbed into the costing of the relevant industries and in that way will be borne by the community or by that part of it which uses the product which the industry produces. In assessing the quantum of a fine considerations of this kind are to be taken into account. The fine should be such as will make it worthwhile that the cost of precautions be undertaken… I do not mean by this that the legislature saw the legislation as providing, by payment of a fine, a licence to pollute. In the end, the object of the legislation is to prevent pollution and to do this, inter alia, by the deterrent effect of a substantial fine and by, in consequence, persuading the industries concerned to adopt preventive measures. In assessing the fine in an individual case, it is proper to bear in mind the economic realities upon which such legislation is based.

91 The totality principle has to be taken into account in the present case. In Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 704, Kirby P, with whom Campbell and James JJ agreed, held that the principle of totality is applicable where a penalty imposed is by way of a fine. The totality principle requires that a total fine for more than one offence does not exceed what is called for in the whole of the circumstances. In Camilleri the court had regard to the close time frame of three offences, which suggested that they were to be seen as connected and to be punished accordingly. Therefore, a reduction should be made so as properly to reflect the total criminality. The court cited the dictum of Street CJ in R v Holder [1983] 3 NSWLR 245 at 260 that:

The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences. The effect of this practical consideration is always to produce an ultimate aggregate which is less than that which would be arrived at by a straight forward adding up of the terms appropriate for the offences if each were viewed alone. In carrying out this process of adjustment, it is both inevitable as well as proper that the ultimate decision be arrived at in the light of the totality of the criminality involved in all of the offences. As has been said more than once in this Court, where the principle of totality comes into effect, it is more often than not of little importance how the ultimate aggregate is made up (that is to say, whether by a series of aggregate terms or by a series of concurrent terms, or by partly one and partly the other). The important factor is the practical significance of the sentencing order.

Additional agreements and evidence relating to penalty

92 During the hearing, the following two matters were agreed:

(a) the defendant will pay the prosecutor’s costs of the proceedings agreed in the sum of $79,000; and
(b) pursuant to the Protection of the Environment Operations Act 1997 , s 250, the Court should make a publication order in the form (if approved by the Court) set out later in this judgment, requiring the defendant to publish an advertisement concerning its guilt and the penalty in the Financial Review and the Sydney Morning Herald.

93 The Agreed Facts set out earlier summarise the unchallenged affidavit evidence, which was also read in the case, of nearby residents Mr So and Mr and Mrs Blackie that unlawful hammering caused actual harm through noise and vibration to the extent of preventing sleep, greatly diminishing normal activities and driving Mr So to move elsewhere over the long weekend.

94 I accept the unchallenged affidavit evidence of Riku Taurianen read in the defendant’s case, which, among other things, evidences the defendant’s concern and regret in relation to this incident and the steps that it has taken to ensure that such an incident does not recur. Mr Taurianen is the Project Manager Tunnelling for the construction of the Epping to Chatswood component of the Parramatta Rail Link project by the joint venture. His evidence included the following:

(a) The defendant developed and implemented an Environmental Management System for the project in 2002. It also developed a Community Involvement Plan which defined the policies, processes and procedures for managing relations with the community and stakeholders during, amongst other works, excavation of CP 42. In accordance with its provisions, a complaints line was established for the duration of construction. The presence and operation of the complaints line was notified to local residents and public authorities. Under its provisions, local residents were to be notified in relation to proposed works which could affect the local community, such as noisy work, 14 days prior to work commencing. It required that during construction a verbal response be made to the complainant within two hours of the complaint being received on the complaints line. As part of its safety procedures, the defendant installed fixed line underground telephone lines with flashing lights on top of the phones in the tunnels of the project at every second cross-passage to allow communications between the surface and underground.
(b) The environmental and community relations management, supervision and procedures for cross-passage excavation have improved since the June 2004 long weekend to ensure that such an incident does not occur again. The defendant has spent significant funds and effort in upgrading the environmental and community relations management, supervision and procedures for cross-passage excavation.

(c) The defendant has spent approximately $8 million on environmental compliance since the start of the project. A total of $1 million of this figure was spent on environmental and community relations management, supervision and procedures for cross-passage excavation. Since the project commenced the defendant has held 98 community liaison group meetings that discussed underground works, to the end of March 2006. The defendant is committed to responsible operation of the project and realises and accepts its obligations for the protection of the environment and the amenity of surrounding residents. It takes these obligations seriously and is continually working to reduce any impacts from the project on the local community. It was very concerned by this incident at CP 42 and immediately responded, cooperating fully with the Environment Protection Authority.
(d) The defendant regrets what occurred and has ensured that such an incident will not occur again. All 49 cross-passages and 39 fan niches (which also require rock hammering) were constructed by November 2005. No further works of this nature are required for the project.

Seriousness of the offences

95 “It has long been held in this court that a contravention of a pollution licence involves a breach of trust”: see Environment Protection Authority v Port Kembla Copper Pty Ltd (2001) 115 LGERA 391 (Pearlman J) at 398-399, where the authorities are collected. The seminal authority is State Pollution Control Commission v CSRLtd (1989) 75 LGRA 1, where Cripps J said at 4-5:

CSR Ltd was given a licence to pollute. Its licence was conditional upon it not polluting any more than permitted and maintaining certain standards to ensure that it’s

limit was not exceeded. Its licence placed it in a special category over and above other persons and operations and consequently imposed on it certain obligations. In effect, CSR was trusted so to conduct its operations that it would not pollute the water more than that for which permission was given.

96 In Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 701, Kirby P said that:

In environmental matters the Court has previously exercised its discretion in relation to penalty on the principle that the more serious the lasting environmental harm involved the more serious the offence and, ordinarily, the higher the penalty.

97 A noise pollution offence, by its nature, ordinarily tends to be less lasting than other types of pollution offences. This may explain why the maximum penalty for an offence relating exclusively to noise under the Protection of the Environment Operations Act 1997, s 64(1) is $60,000, whereas offences not relating exclusively to noise attract a maximum penalty of $250,000.

98 It has been said that “in environmental offences, the amount and types of environmental harm are key indicators of gravity, but the factual circumstances of the behaviour involved is also relevant”: Environment Protection Authority v Bega Valley Shire Council [1998] NSWLEC 187 at p19 per Sheahan J.

99 In my opinion, the seriousness of the offences is properly assessed towards the upper end of the gravity spectrum for two reasons. First, as I have found, they were intentional, being the result of an arrangement between Mr Schenk and Mr Kuipers that rock hammering could continue over the long weekend until a complaint was received. Second, the actual harm to nearby residents was quite serious. Mr and Mrs Blackie and Mr So were unable to carry out their usual activities at home and unable to sleep. Mr So was driven to move elsewhere for the weekend. In my view, it is to be inferred beyond reasonable doubt that the degree of noise and vibration which was experienced by Mr So and Mr and Mrs Blackie in two different residences in the vicinity were such that similar noise, vibration and nuisance would also have been experienced by other residents in the close vicinity of their residences.

100 I turn now to consider the specific matters which the Court is obliged to take into account under the Protection of the Environment Operations Act 1997, s 241 (so far as they are relevant).

The extent of the harm caused or likely to be caused to the environment by the commission of the offence

101 The defendant does not dispute that the effect of the offences is that noise and vibration affected two residences (of Mr So and Mr and Mrs Blackie) in the vicinity, which caused actual harm. The defendant acknowledges that the offences caused a nuisance to the occupants of these two residences over the long weekend and disturbed their sleep. The defendant points out that only two complaints were received by the Joint Venture 24 hour 1800 Construction Telephone Line and that the availability and function of this telephone line was notified to the community. The defendant submits, first, that there was no evidence that the offence caused actual harm to more than two residences and, second, that the limited degree of harm that did occur was temporary, with no lasting effects.

102 I accept the second submission, but not the first. As I have said earlier, it should be inferred that the offences caused actual harm to other residences in close vicinity of the residences of the two complainants.

The practical measures that may be taken to prevent, control, abate or mitigate that harm

103 I accept that, in response to the incident, the joint venture ensured that rock hammering did not continue on Tuesday, despite it being permissible under the licence, in order to allow the joint venturer to investigate the incident and take appropriate action.

The extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence.

104 In my view, the defendant could easily have foreseen the actual harm caused or likely to be caused to the environment by the commission of the offence.

The extent to which the person who committed the offence had control over the causes that gave rise to the offence.

105 The defendant, through Mr Schenk, had control over the causes that gave rise to the offence. I have no reasonable doubt that, except for the arrangement entered into between Mr Schenk and Mr Kuipers, Mr Kuipers would have adhered to the licence conditions.

Whether, in committing the offence, the person was complying with orders from an employer or supervising employee

106 It is common ground that this consideration is not applicable in the circumstances of this case.

Other Relevant Matters

107 There are other matters that mitigate the defendant’s culpability.

108 First, I take into account that there have been pleas of guilty, the timing of the pleas, and their utilitarian value. The plea to one charge was entered on 26 October 2005. The plea to the other charge was entered on 17 March 2006. On 2 November 2005, the proceedings were set down for hearing. The hearing commenced on 10 April 2006. One of the pleas was, therefore, entered quite early. The other plea was relatively late, after much of the work in the case had been done and most affidavits served. The defendant submitted that I should take into account that the second plea was entered at about the same time as a plea bargain was apparently struck, whereby the prosecutor would not present evidence in relation to other similar charges, following discussions which lasted for some six months. It has been held that “the amount of any discount to be allowed by reason of the utilitarian benefit of a plea of guilty should not be reduced on the ground that the plea was offered in association with the abandonment by the Crown of a greater charge; and if in such a case the plea is offered as soon as the Crown indicates willingness to accept a plea to the lesser charge, it should be regarded as being made at the earliest opportunity”: R v Dib [2003] NSWCCA 117 at [3], cited in Environment Protection Authority v Metalcorp Recyclers Pty Ltd (2004) 136 LGERA 125 at 131 [24]. The present case is different, and I do not think that it attracts the same approach. In my view, the plea to the second charge should be regarded as having been entered at a relatively late stage.

109 Second, there is evidence, which I accept, that the defendant regrets the impact the incident had on the environment and the residents and has taken steps to ensure that such an incident will not recur (Agreed Facts paragraph 11.1 and the Taurianen affidavit).

110 Third, the defendant cooperated with the prosecutor prior to being charged (Agreed Facts paragraph 11.1).

111 Fourth, although the defendant does not have an entirely unblemished environmental record (Agreed Facts paragraph 10.2), I accept that it has generally taken a responsible attitude to environmental measures and has incurred significant expenditure on environmental management and time spent liaising with community groups and households in relation to this joint venture project (see the Taurianen affidavit).

112 Fifth, I accept that the defendant is unlikely to re-offend. Since the offences were committed, the defendant has convened disciplinary meetings with relevant employees to ensure that proper management systems are implemented and guarantee compliance by contractors with licence conditions. All site managers have been reminded of the importance of compliance with the licence conditions. The joint venturer has conducted training sessions for all joint venture managers about compliance with the Protection of the Environment Operations Act and licence conditions. Mr Kuipers has received a verbal warning from the defendant that his subcontract would be terminated if he disobeyed any instructions from Hochtief personnel.

113 Sixth, the Agreed Facts have saved a significant amount of Court time and substantially reduced the length of this sentence hearing.

114 Seventh, the defendant has agreed to an order that the fact of its conviction for these offences be published in the Sydney Morning Herald and the Financial Review. This involves an element of public shame upon the defendant and reduces the need for a personal deterrent component of any fine to be imposed by the Court.

115 Eighth, the defendant has agreed to pay the prosecutor’s costs in the sum of $79,000. I consider that an order for costs was inevitable. However, the fact that the quantum has been agreed is entitled, I think, to a little weight in sentencing when it is considered in conjunction with the abovementioned mitigating factors.

Similar cases

116 While the principle of even-handedness in sentencing must be observed, it has been said in the context of a case such as this, that comparisons with other cases are likely to be of no utility. In Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 at 312 (CCA) Giles JA, with whom Hulme and Adams JJ agreed said:

Indiscriminate reference to other cases is of no utility and should be discouraged. Even discriminating reference is likely to be of no utility because the facts in cases such as the present will almost always be peculiar to the individual case. I consider that is so in the present appeal.

117 In the present case, the defendant provided me with a discriminating analysis of several cases concerned with the emission of offensive odours and one noise pollution case, Environment Protection Authority v Metalcorp Recyclers [2000] NSWLEC 259. The prosecutor referred me to one other noise pollution case, Environment Protection Authority v Pasminco Broken Hill Mine Pty Ltd [2002] NSWLEC 70. I have not found the cases to which I have been referred of utility, because the facts of the present case are peculiar to it.

Conclusions

118 The maximum fine for the first offence is $60,000, plus an additional maximum sum of $6,000 because it continued on a second day. The maximum fine for the second offence is $60,000. The maximum fines invite comparison with the worst possible case. The case before me is by no means the worst possible case, although it is particularly serious because, as I have found, the offences were intentional and caused actual harm. The second offence is a little more serious than the first, because it occurred in circumstances where the defendant’s officers, in addition to Mr Schenk, knew that unlawful rock hammering had been occurring and did not do as much as they could have done to stop it.

119 I provisionally determine, by reference solely to the objective circumstances of the case, that the fine for the first offence should be $40,000, which includes $3,000 because of the fact that it continued into the early hours of a second day, and that the fine for the second offence should be $40,000 because it is somewhat more serious, although it did not continue into a second day. I discount the fine for the first offence by 25 percent for the early plea of guilty; and discount the fine for the second offence by 15 percent for the later plea of guilty. I am concerned that other considerations bearing on the utilitarian benefit, namely the complexity of issues, difficulty in assembling evidence and the potential length and complexity of a fully contested trial do not seem to bear as much weight in the present case as they do in some other criminal cases for which the usual maximum discount of 25 percent should be reserved. However, as the relative weight of those considerations, which were identified in Thomson (above) was not argued before me, I do not reduce the discount on that account in this case.

120 I take into account the totality principle because both offences were identical in nature, stemmed from the same series of events and occurred within a 48 hour time period, as a result of the actions of the same subcontractor, albeit pursuant to the arrangement with Mr Schenk.

121 I am concerned to ensure that the end result produces adequate fines when looked at against the whole of the facts, rather than a simple mathematical answer.

122 I conclude that the fine for the first offence should be $20,000 and for the second offence $24,000, a total of $44,000.

123 I make the following orders—

1. The defendant is convicted of the two offences as charged.
2. The defendant is fined the sum of $20,000 for the first offence.
3. The defendant is fined the sum of $24,000 for the second offence.
4. The defendant is to pay the prosecutor’s costs agreed in the sum of $79,000.
5. The defendant, within fourteen days of today, is to publish an advertisement in the following form in the Financial Review and the Sydney Morning Herald in the early general news section, with a size of 10 centimetres by two columns:

On 28 April 2006 the Land and Environment Court of New South Wales found HOCHTIEF AG guilty of two offences against the Protection of the Environment Operations Act 1997. The Environment Protection Authority prosecuted the company for breaching its environment protection licence on two occasions during the 2004 Queens Birthday long weekend. The breaches consisted of rock hammering in the new Epping to Chatswood railway tunnel. To prevent residents being impacted adversely by noise and vibration during the tunnel’s construction, the environment protection licence prohibited rock hammering of certain areas on Sundays and public holidays.

The use of rock hammering on Sunday 13 June 2004 through to the early hours of Monday 14 June 2004 and later that day, resulted in three residents lodging complaints with the Environment Protection Authority.

Hochtief AG was fined $44,000 for the two offences and ordered to place this notice by the Land and Environment Court. The company was also ordered to pay the Environment Protection Authority’s costs.

The Environment Protection Authority is part of the Department of Environment and Conservation (NSW).

6. The exhibits may be returned.

CITATION:	Environment Protection Authority v Hochtief AG [2006] NSWLEC 200
PARTIES:	PROSECUTOR: Environment Protection Authority DEFENDANT: Hochtief AG
FILE NUMBER(S):	50021; 50022 of 2005
CORAM:	Biscoe J
KEY ISSUES:	Environmental Offences - Prosecution :- intentional noise pollution – sentencing considerations
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999 ss 21A, 22, 22A, 23 Protection of the Environment Operations Act 1997 ss 64(1), 241
CASES CITED:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357; Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304; Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; Chivers v Western Australia [2005] WASCA 97; Dennison v Tasmania [2005] TASSC 54; Environment Protection Authority v Bega Valley Shire Council [1998] NSWLEC 187; Environment Protection Authority v Metalcorp Recyclers [2000] NSWLEC 259; Environment Protection Authority v Metalcorp Recyclers Pty Ltd (2004) 136 LGERA 125; Environment Protection Authority v Pasminco Broken Hill Mine Pty Ltd [2002] NSWLEC 70; Environment Protection Authority v Port Kembla Copper Pty Ltd (2001) 115 LGERA 391; Markarian v The Queen (2005) 79 ALJR 1048; Moore v R [2005] NSWCCA 407; R v Dib [2003] NSWCCA 117; R v Holder [1983] 3 NSWLR 245; R v MacBain [2005] NSWCCA 358; R v Olbrich (1999) 199 CLR 270; R v O’Neill [1979] 2 NSWLR 582; R v Otto [2005] NSWCCA 333; R v Sladic (2005) 92 SASR 36; R v Thomson (2000) 49 NSWLR 383; State Pollution Control Commission v CSR Ltd (1989) 75 LGRA 1
DATES OF HEARING:	10/04/2006-11/04/2006
DATE OF JUDGMENT:	04/28/2006
LEGAL REPRESENTATIVES:	PROSECUTOR: Mr Rushton SC SOLICITORS Environment Protection Authority DEFENDANT: Mr I Lloyd QC SOLICITORS Minter Ellison