Environment Protection Authority v Peters

[2006] NSWLEC 612

Reported Decision: 153 LGERA 238

Land and Environment Court

of New South Wales

CITATION:

Environment Protection Authority v Mark Peters [2006] NSWLEC 612

PARTIES:

PROSECUTOR
Environment Protection Authority

DEFENDANT
Mark Peters

FILE NUMBER(S):

50031 of 2005; 50033 of 2005; 50067 of 2005

CORAM:

Jagot J

KEY ISSUES:

Prosecution :- Sentence - use of pesticide other than in accordance with approved label - furnishing records to the EPA knowing they were false in a material respect

LEGISLATION CITED:

Crimes (Sentencing Procedure) Act 1999 s 3A, s 21A(2), s 21A(3), s 22
Criminal Procedure Act 1986 s 250(a)
Fines Act 1996 s 6
Pesticides Act 1999 s 15
Protection of the Environment Operations Act 1997 s 169, s 193, s 211(2), s 241(1)

CASES CITED:

Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357;
Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234;
Environment Protection Authority v Ableway Waste Management Pty Limited & Anor [2005] NSWLEC 469;
Environment Protection Authority v Gosford City Council [2000] NSWLEC 154;
Environment Protection Authority v Hargraves (No 2) (2003) 124 LGERA 57;
Environment Protection Authority v Le Dome Pty Limited [2002] NSWLEC 167;
Environment Protection Authority v Mark Peters [2006] NSWLEC 465;
Environment Protection Authority v Wellbourne and Ligano Pty Ltd trading as Manly Warringah Pest Control [1999] NSWLEC 244;
EPA v Barnes [2006] NSWCCA 246;
EPA v Umbers [2001] NSWLEC 67;
R v Thomson (2000) 49 NSWLR 383;
Reg v O’Neill (1979) 2 NSWLR 582;
Veen v The Queen [No. 2] (1988) 164 CLR 465

DATES OF HEARING:

11/09/2006

EX TEMPORE JUDGMENT DATE:

09/11/2006

LEGAL REPRESENTATIVES:

PROSECUTOR
Mr T Howard
SOLICITORS
Department of Environment & Conservation

DEFENDANT
No appearance
SOLICITORS
N/A

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

Jagot J

11 September 2006

50031 of 2005
50033 of 2005
50067 of 2005

ENVIRONMENT PROTECTION AUTHORITY
Prosecutor

MARK PETERS
Defendant

JUDGMENT

1 I have found proved the offences charged in each summons, as described below.

Proceedings 50033 of 2005

… the defendant, Mark Peters of 25 The Esplanade Drummoyne, in the State of New South Wales … on or about 31st January 2005 as a director of Mandiar Pty Limited (ACN 092 426 045), … committed an offence against section 211(2) of the Protection of the Environment Operations Act 1997 (the “Act”) by reason of section 169(1) of the Act, in that in purported compliance with a requirement made under Chapter 7 of the Act Mandiar Pty Limited furnished records knowing they were false in a material respect.

Proceedings 50067 of 2005

… the defendant, Mark Peters of 25 The Esplanade, Drummoyne, in the State of New South Wales, … as a director of Jalenia Pty Limited (ACN 083 124 725), on or about 16th March 2002 … committed an offence against section 15(1) of the Pesticides Act 1999 (the “Act”) by reason of s 112(1) of the Act, in that at or near 16 Roskell Road, Callala Beach, Shoalhaven in the said State, Jalenia Pty Limited used a registered pesticide in contravention of an instruction on an approved label for the pesticide, without being authorised to do so by a permit.

Proceedings 50031 of 2005

… the defendant, Mark Peters of 25 The Esplanade, Drummoyne, in the State of New South Wales … as a director of Jalenia Pty Limited (ACN 083 124 725), on or about 28 October 2002 … committed an offence against section 15(1) of the Pesticides Act 1999 (the “Act”) by reason of s 112(1) of the Act, in that at or near Medowie in the said State Jalenia Pty Limited used a registered pesticide in contravention of an instruction on an approved label for the pesticide, without being authorised to do so by a permit.

2 The issue is now one of sentence.

3 The defendant has not appeared today. I heard these matters ex parte having regard to my reasons for doing so in proceedings 50033 of 2005 published on 19 July 2006 and the additional affidavits relied upon by the prosecutor today establishing that the prosecutor complied with the directions I made to bring the hearing to the notice of the defendant insofar as possible. I delivered reasons this morning for determining that it was appropriate to proceed in the absence of the defendant today. My reasons were that the only changed circumstance was that the position of the former employees was no longer relevant. Accordingly, I was satisfied in accordance with s 250(a) of the Criminal Procedure Act 1986, that in circumstances where there has been no appearance before me today, I should proceed to hear and determine all outstanding matters in proceedings 50031, 50067 and 5003 of 2005.

4 In my reasons for decision with respect to proceedings 50033 of 2005 delivered on 19 July 2006 (Environment Protection Authority v Mark Peters [2006] NSWLEC 465), I set out the findings that I made beyond reasonable doubt with respect to the commission of the offence charged in those proceedings, in particular at [40] to [48]. I found that the defendant knowingly arranged a systematic falsification of approximately 300 to 400 termite inspection certificates which the prosecutor had required a company, Mandiar Pty Ltd, to produce to it in accordance with a notice under s 193 of the Protection of the Environment Operations Act 1997 (the “POEO Act”), the defendant being the sole director of that company at all material times.

5 I also found that this systematic falsification was part of an attempt by the defendant to conceal the fact that in homes to which those certificates applied, the defendant (through his companies) had applied a termiticide which had the active ingredient chlorpyriphos in cavity walls other than in the direct treatment of termite nests, in contravention of the approved label for use of that product. This involved breach of s 15 of the Pesticides Act 1999. Section 15 of the Pesticides Act at the relevant time provided that:

(1) A person must not use a registered pesticide in contravention of any instruction on an approved label for the pesticide unless the person:
(a) is authorised to do so by a permit; and
(b) complies with the permit.
Maximum penalty:
• $120,000 in the case of a corporation, or
• $60,000 in the case of an individual.
  
6 As the defendant was the sole director of Mandiar Pty Ltd, by operation of s 169 of the POEO Act, these circumstances constituted an offence by the defendant under s 211(2) of that Act. Section 211(2) provides that:

(2) A person who furnishes any information or does any other thing in purported compliance with a requirement made under this Chapter, knowing that it is false or misleading in a material respect is guilty of an offence.

7 In contrast to proceedings 50033 of 2005, the defendant entered, and the Court accepted, pleas of guilty in proceedings 50067 of 2005 and 50031 of 2005 on 10 March 2005. Those pleas of guilty constituted admissions of the essential elements of the offences charged in those proceedings (Reg v O’Neill (1979) 2 NSWLR 582 at 588). Any factor otherwise relied upon by the prosecutor as aggravating the seriousness of those offences must be proved beyond reasonable doubt.

8 Common features to all three proceedings are that I have before me an affidavit of Mr David Thompson sworn 2 June 2006 providing information about Chlorpyrifos and a copy of a sequestration order against the defendant made on 3 May 2006 identifying the date of an act of bankruptcy by the defendant on 20 December 2005, as well as an order setting aside an interim review application of the sequestration order on 4 August 2006.

9 Mindful of the general obligations of a prosecutor, and the specific obligations arising in the circumstance where these matters were all heard before me today ex parte, Mr Howard for the prosecutor noted the relevant statutory provisions and principles and made in summary the following submissions:

(1) The offence in 50033 of 2005 fell within the upper end of the range of seriousness by reason of its extent and systematic nature. This was confirmed by the nature of the obligation imposed by s 193 to provide information and the importance of the provision of accurate rather than falsified information about the termiticide applied. Mr Howard referred, in particular, to the observations of Lloyd J in Environment Protection Authority v Hargraves (No 2) (2003) 124 LGERA 57 at [9]:

The purpose of statutory provisions such as ss 203 and 211 is to enable investigators of the Environment Protection Authority to determine whether there has been compliance with or contravention of relevant environment protection legislation. It is important that a person who is required to answer questions speak the truth and that the information which such a person supplies is not misleading.

(2) The facts in this case were far more serious than those in Hargraves because, as his Honour’s reasons in that matter disclosed, the defendant’s liability related to certain answers to questions in an interview with the prosecutor. In this case by contrast, the defendant systematically falsified 300 to 400 termite inspection certificates, each certificate relating to a dwelling.

(3) In this context, the observation of Mason CJ, Brennan, Dawson and Toohey JJ in Veen v The Queen [No. 2] (1988) 164 CLR 465 at 478 was relevant:

The second subsidiary principle material to this case is that the maximum penalty prescribed for an offence is intended for cases falling within the worst category of cases for which that penalty is prescribed: Ibbs v The Queen (36). That does not mean that a lesser penalty must be imposed if it be possible to envisage a worse case; ingenuity can always conjure up a case of greater heinousness. A sentence which imposes the maximum penalty offends this principle only if the case is recognizably outside the worst category.

(4) Although it was difficult to link the offence in proceedings 50033 of 2005 to the factors set out in s 241(1) of the POEO Act, Mr Thompson’s evidence supported an inference of a risk of harm to human health by reason of the occupiers of dwellings the subject of those termite installation certificates which were falsified not having any means to know whether and to what extent Chlorpyrifos had been applied generally into cavity wall systems within those dwellings.

(5) Otherwise, with respect to proceedings 50033 of 2005 in particular, there was a strong need for general deterrence. Mr Howard referred to the observation of Badgery Parker JA in Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 367:

When all is said in favour of the appellant, it remains the case that the offence was a serious one. It is an offence of a kind which generates massive public concern and which has enormous potential for harm. That much is demonstrated by the finding of the dead fish, obviously killed by some sort of pesticide, even if their deaths cannot directly be attributable to this offence. It is an offence of a nature such that the sentencing must embrace powerful considerations of general deterrence. Those who handle dangerous chemicals must be regarded as under a heavy obligation to the rest of the community to do so with the utmost care. This Court should not be seen to send any message other than that.

(6) While the totality principle applied to proceedings 50067 and 50031 of 2005, it was more difficult meaningfully to apply that principle to proceedings 50033 of 2005. Proceedings 50033 of 2005 involved an offence under the POEO Act, not the Pesticides Act, being an offence that was committed at a different time and in a different context, albeit with some factual connection to the facts that gave rise to proceedings 50067 and 50031 of 2005.

(7) The following aggravating factors applied to proceedings 50033 of 2005 (s 21A(2) and s 21A(3) of the Crimes (Sentencing Procedure) Act 1999):

(i) the offence was committed without regard for public safety,
(k) the offender abused a position of trust or authority in relation to the victim,
(m) the offence involved multiple victims or a series of criminal acts,
(n) the offence was part of a planned or organised criminal activity.

(8) In terms of mitigating factors, s 21A(3)(e) (the offender did not have any record of previous convictions) was relevant to all proceedings. Having regard to any other factor in s 21A(3) would be speculative but for the guilty pleas in proceedings 50067 and 50031 of 2005 which were required to be taken into account having regard to s 21A(3)(k) and s 22 of the Crimes (Sentencing Procedure) Act 1999.

(9) The offences in proceedings 50067 and 50031 of 2005 were plainly not in the most serious category of case and far worse categories of case could readily be envisaged. The defendant had entered guilty pleas at an early or reasonably early stage in those proceedings and those pleas had real utilitarian value. In consequence, the prosecutor adopted the prudent or conservative course of submitting that the defendant should be given the full utilitarian discount of 25% in proceedings 50067 and 50031 of 2005 having regard to the entry of the guilty pleas in those proceedings ( R v Thomson (2000) 49 NSWLR 383 at [160]). Further, the totality principle should be applied in the ordinary course to the offences in proceedings 50067 and 50031 of 2005.

(10) In all of the proceedings, I had to give consideration to the defendant’s means to pay having regard to the terms of s 6 of the Fines Act 1996. Mr Howard drew my attention to the authorities cited in Environment Protection Authority v Ableway Waste Management Pty Limited & Anor [2005] NSWLEC 469 at [33] – [34] in particular, and Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [268] – [275]. To those authorities I would add a reference to EPA v Barnes [2006] NSWCCA 246 at [64] – [69]. Mr Howard also said that particularly with respect to proceedings 50033 of 2005, the need for general deterrence operated to require a significant penalty commensurate with the level of seriousness of the offence that the defendant had committed despite the defendant’s impecuniosity.

(11) With respect to even handedness about proceedings 50033 of 2005, the decision of Lloyd J in Hargraves to which I have already referred was relevant (being the only reported decision of which the prosecutor was aware) but the facts in proceedings 50033 of 2005 were far more serious.

(12) With respect to even handedness about proceedings 50067 and 50031 of 2005, there were four decisions of some relevance - Environment Protection Authority v Gosford City Council [2000] NSWLEC 154, Environment Protection Authority v Le Dome Pty Limited [2002] NSWLEC 167, EPA v Umbers [2001] NSWLEC 67, and Environment Protection Authority v Wellbourne and Ligano Pty Ltd trading as Manly Warringah Pest Control [1999] NSWLEC 244. The decisions in Ligano and Umbers were of limited if any assistance (an observation with which I agree). With respect to Gosford City Council and Le Dome , the maximum penalty was different and the range of mitigating factors was also different in both matters. Nevertheless, the objective seriousness of the offences in both of those matters was far more serious than the objective seriousness of the offences in proceedings 50067 and 50031 of 2005. I observe that the mitigating factors in both those matters were also quite different from the present case - where I accept the prosecutor’s submission that but for s 21A(3)(e) and (k) (that is the absence of prior convictions and the entry of the guilty pleas) to attempt to consider other mitigating factors would involve me in unwarranted speculation.

10 I generally accept the prosecutor’s submissions, subject to minor variations. Mr Thompson’s evidence discloses that Chlorpyrifos is a broad-spectrum organophosphate capable of causing a wide range of symptoms in humans depending on concentration and exposure. The risk of harm arising from the application of Chlorpyrifos within cavity wall systems generally is exposure of persons to this product through air vents in the cavity walls where, according to Mr Thompson, Chlorpyrifos is expected to exist in vapour and particulates. This, in Mr Thompson’s opinion, contrasts with the direct application of Chlorpyrifos to termite nests, which was an authorised use for this product. I accept Mr Thompson’s evidence.

11 I accept that there is no evidence before me of any actual harm having been caused by the application of Chlorpyrifos within cavity wall systems generally in the dwellings the subject of proceedings 50067 and 50031 of 2005 or otherwise in the dwellings to which I referred in proceedings 50033 of 2005 - but I accept that this use had at least the potential to give rise to a risk of harm to human health. As the prosecutor submitted, this consideration may readily be applied to proceedings 50067 and 50031 of 2005, but not so readily to 50033 of 2005 where the offence charged relates to the provision of information. As such, I generally accept in terms of s 241(1) of the POEO Act that:

(a) There is no evidence of any actual harm but there is some risk of potential harm for the reasons I have identified.

(b) There were practical measures that could have been taken to avoid the harm simply complying with the approved labels and not systematically falsifying records.

(c) The potential harm (such as it was) was reasonably foreseeable.

(d) There can be no doubt that the defendant had control over the causes that gave rise to the commission of the offence.

12 The purposes of sentencing are set out in s 3A of the Crime (Sentencing Procedure) Act 1999. Section 3A provides:

3A Purposes of sentencing
The purposes for which a court may impose a sentence on an offender are as follows:
(a) to ensure that the offender is adequately punished for the offence,
(b) to prevent crime by deterring the offender and other persons from committing similar offences,
(c) to protect the community from the offender,
(d) to promote the rehabilitation of the offender,
(e) to make the offender accountable for his or her actions,
(f) to denounce the conduct of the offender,
(g) to recognise the harm done to the victim of the crime and the community.

13 I accept in these matters that deterrence is a very important consideration. In this regard, I refer to the observations of Kirby J (with whom the Mason P and Hoeben J agreed) in EPA v Barnes at [30] to [33]:

30 The appellant contended that her Honour had no regard, or insufficient regard, for deterrence, general and specific. Reference was made to s3A of the Crimes (Sentencing Procedure) Act 1999, where the purposes of a sentence are identified and include the following:
"s3A(b) to prevent crime by deterring the offender and other persons from committing similar offences,"

31 Deterrence, especially in the context of environmental offences, is a matter of some importance. In Axer Pty Limited v Environment Protection Authority (1993) 113 LGERA 357, Mahoney JA said this: (at 359)
"The quantum of the fines which the legislation allows to be imposed has no doubt been fixed not merely to indicate the seriousness with which such pollution is regarded, but also to deter those engaged in such activities and to procure that they will take the precautions necessary to ensure that it does not occur."

32 In Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (supra), Kirby P (Campbell and James JJ agreeing) made the following comment in the context of the objects of pollution control legislation: (at 701)
"The objects of the Act and its provisions would require a substantial sentence to punish the appellant, to deter others and to encourage full compliance with the Act by the appellant and others."

33 More recently, the Chief Judge of the Land and Environment Court, Preston J, in Bentley v BGP Properties Pty Limited [2006] NSWLEC 34, said this:
"139. The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed: R v Rushby [1977] 1 NSWLR 594 at 597 to 598.
140. This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines: Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349 at 354 and Director-General, National Parks and Wildlife v Wilkinson [2002] NSWLEC 171 (27 September 2002) at paras 85 and 93 per Lloyd J.
141. The deterrent effect of a fine must send an important message that laws requiring the conservation of the environment and important components of it such as threatened species, must be complied with."

14 As such, while I have had regard to the impecuniosity of the defendant, that factor (particularly in proceedings 50033 of 2005) does not lead me to conclude that a significant discount of the just and appropriate fine is warranted, having regard to the objective seriousness of that offence.

15 I accept that there is an aggravating factor with respect to proceedings 50033 of 2005, namely the systematic nature of the falsification of about 300 to 400 certificates in response to the s 193 notice. Whether that fact is best described as fitting within sub-para (m) or (n) of s 21A(2) is not entirely clear, but I am satisfied that that fact does bring the offence in proceedings 50033 of 2005 within either sub-para (but as it is the same fact, there cannot be two aggravating factors).

16 I do not accept that ss 21A(2)(i) or (k) of the Crimes (Sentencing Procedure) Act applies to proceedings 50033 of 2005. With respect to (i), the evidence is insufficient for me to be satisfied as to that aggravating factor. The knowing provision of false information was part and parcel of the offence. The wilful nature of the offence committed by the defendant, in my view, is part of the inherent objective seriousness of the offence, rather than a trigger to a separate aggravating factor such as set out in sub-para (i). Further, Mr Thompson’s evidence does not seem to me to rise as high as would be necessary for me to be satisfied with respect to sub-para (i). Accordingly, I do not place weight on sub-para (i) as an aggravating factor.

17 Similar with respect to sub-para (k), as Mr Howard acknowledged, these facts are somewhat foreign to the notions or trust or authority that, in my view, enlivens sub-para (k). Accordingly, I do not place weight on that sub-para (k) as an aggravating factor.

18 I accept that there is a mitigating factor with respect to proceedings 50033 of 2005 - namely the absence of any prior convictions of the defendant. As I have said, to otherwise consider potential mitigating factors in the circumstances of this matter would involve me in unwarranted speculation. Accordingly, I do not do so.

19 To that mitigating factor, I must also add - for proceedings 50067 and 50031 of 2005 - the pleas of guilty and the prosecutor’s submission that the full value of the utilitarian discount ought to be applied. I also accept the prosecutor’s submission that I must apply the totality principle to these proceedings. I agree that the principle cannot be applied to proceedings 50033 of 2005 for the reasons that the prosecutor advanced, and which appear to me to be consistent with the discussion of that principle in EPA v Barnes at [44] to [46].

20 The maximum penalty for an offence against s 211(2) of the POEO Act applicable to proceedings 50033 of 2005 is $120,000. I am satisfied that the offence committed by the defendant was very serious, falling at the upper end of the range having regard to both objective and subjective factors, including the defendant’s means to pay and the absence of prior convictions. The serious nature of the offence arises from the extent of the falsification, that is, that 300 to 400 certificates were systematically falsified, and because the reason for the falsification was to conceal the fact that chlorpyrifos had been extensively used in cavity wall systems generally in dwellings to which those certificates applied, in breach of s 15 of the Pesticides Act.

21 My conclusion is that an appropriate penalty must have regard to the very serious nature of the offence committed by the defendant. The fine must appropriately reflect that fact and the need for the defendant’s conduct to be denunciated in strong terms. Accordingly, having regard to those matters as well as the defendant’s impecuniosity and absence of prior convictions, I conclude that an appropriate penalty in proceedings 50033 of 2005 should be fixed in the amount of $80,000.

22 The maximum penalty for breaches of s 15(1) of the Pesticides Act is $60,000. The offences in proceedings 50067 of 2005 and 50031 of 2005 fall within the lower end of the range of potential seriousness. I must also have regard to the two factors to which I referred for proceedings 50033 of 2005 - namely the defendant’s means to pay and the absence of prior convictions, as well as the pleas of guilty and the totality principle.

23 My provisional view would be that the offences in these proceedings each warrant a fine of $10,000 which amounts should be discounted by 25% to reflect the utilitarian value of the early pleas of guilty (giving provisional fines in the amount of $7,500 in each of those proceedings). I accept the prosecutor’s submission that the totality principle should be applied in proceedings 50067 and 50031 of 2005. I have considered whether the aggregate penalty in those proceedings which would flow from the conclusions I have reached is just and appropriate having regard to the total criminality of the defendant in the context of those proceedings. Having regard to the defendant’s overall criminality with respect to those proceedings, I consider that it is just and appropriate that I make a further reduction in the penalty having regard to the principle of totality, - that is that the penalty should be adjusted to $6,000 in each of those proceedings.

Orders

24 I make the following orders:

In proceedings 50033 of 2005:

(1) The defendant is convicted of the offence charged.

(2) The defendant is fined the sum of $80,000 for this offence.

(3) The exhibits are returned.

In proceedings 50067 of 2005:

(1) The defendant is convicted of the offence charged.

(2) The defendant is fined the sum of $6000 for this offence.

(3) The exhibits are returned.

In proceedings 50031 of 2005:

(1) The defendant is convicted of the offence charged.

(2) The defendant is fined the sum of $6000 for this offence.

(3) The exhibits are returned.

25 The prosector does not seek any orders for costs and I make no such orders.

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