Environment Protection Authority v Signium Pty Ltd

[2018] NSWLEC 126

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Environment Protection Authority v Signium Pty Ltd [2018] NSWLEC 126
Hearing dates:	6 and 7 June 2018
Date of orders:	24 August 2018
Decision date:	24 August 2018
Jurisdiction:	Class 5
Before:	Moore J
Decision:	See orders at [122] to [124]
Catchwords:	PROSECUTION - breach of Environment Protection Licence condition - failure of effluent and waste management at a piggery - plea of guilty - agreed facts establish guilt - defendant to be convicted PROSECUTION - breach of Environment Protection Licence condition - charge not pressed  PROSECUTION - breach of Environment Protection Licence condition - charge not pressed  PROSECUTION - provision of false and misleading information - plea of guilty - agreed facts establish guilt - defendant to be convicted ENVIRONMENTAL SERVICES ORDER - agreement between the prosecutor and the defendant as to the terms of an Environmental Services Order to be implemented by the defendant - no agreement about statutory foundation for imposing Environmental Services Order - cost of implementation of the Environmental Services Order - environmental benefits to be obtained by implementation of the Environmental Services Order – works required by the Environmental Services Order confined to the defendant's property - Environmental Services Order potentially effective to eliminate/reduce the potential for further licence breaches - Environmental Services Order has public as well as private benefit - whether agreement to implementation of the Environmental Services Order rendered it inappropriate to impose a direct monetary penalty - direct monetary penalty appropriate - whether the extent of direct monetary penalty should be tempered by the environmental benefits to be derived from and costs to be incurred in giving effect to the Environmental Services Order - appropriate to impose a direct monetary penalty for each offence - principles of totality and accumulation - total penalty of $27,000 imposed PENALTIES - application of moneys to an environmental projects - appropriate that moneys be paid into the Environmental Trust Fund
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999, ss 3A, 21A and 22 Criminal Procedure Act 1986, s 257G Environmental Planning and Assessment Act 1979, s 9.56(2A) Environmental Trust Fund Act 1998 Fines Act 1996, s 6 Protection of the Environment Operations Act 1995
Cases Cited:	Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Chief Executive, Office of Environment and Heritage v Ausgrid (2013) 199 LGERA 1; [2013] NSWLEC 51 Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299; [2006] NSWLEC 419 EPA v Barnes [2006] NSWCCA 246 Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383 Veen v The Queen (No 2) 164 CLR 465; [1988] HCA 14
Category:	Sentence
Parties:	Environment Protection Authority (Prosecutor) Signium Pty Ltd (Defendant)
Representation:	Counsel: Ms Z Shahnawaz, barrister (Prosecutor) Ms S Duggan SC (Defendant)   Solicitors: Environment Protection Authority (Prosecutor) Hunt & Hunt (Defendant)
File Number(s):	229320, 229321, 229322, 229323 of 2017
Publication restriction:	No

TABLE OF CONTENTS

Introduction

The Company’s recent interactions with the EPA

The charges

Introduction

Charge 1

Matter 229320 of 2017

Charge 2

Matter 229321 of 2017

Charge 3

Matter 229322 of 2017

Charge 4

Matter 229323 of 2017

The Company's guilty pleas and the procedural history of the charges

The sentencing hearing

Satisfaction of guilt

Introduction

Strict liability offences

The Company’s environmental management deficiencies

The legislation relevant to sentencing

Matters for consideration on sentencing

The maximum penalty

Harm to the environment

Mitigating subjective factors

Introduction

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

Likelihood of reoffending (s 21A(3)(g))

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

Entry of the guilty pleas (s 21A(3)(k))

Cooperation with the Prosecutor (s 21A(3)(m))

Deterrence

Introduction

General deterrence

The proposed environmental services order

Introduction

The cost of the ESO

The scope of the ESO

The appropriate statutory basis for imposing the ESO

Introduction

The Prosecutor’s position

The Company’s position

Consideration

Imposition of penalties in addition to the cost of implementing the ESO

Introduction

The Prosecutor’s position

The Company’s financial position

The Company’s financial position

Conclusion on the imposition of penalties

The Company’s guilty pleas

Introduction

The Prosecutor’s submissions concerning the guilty pleas

The Company’s submissions concerning the guilty pleas

Conclusion on sentencing

Characterisation of the offending conduct

The starting penalties

Discount for the early guilty pleas

Totality and accumulation

Disposal of Charges 2 and 3

Orders

In Matter 229320 of 2017

In Matter 229323 of 2017

In Matter 229321 of 2017

In Matter 229322 of 2017

Costs

The Environmental Service Order

Annexure A

JUDGMENT

Introduction

1. Signium Pty Ltd (the Company) operates a piggery at Ellangowan, a rural location some 85 kilometres north-west of Grafton in the Northern Rivers region of New South Wales. Because of the nature of its operations, the Company requires an Environmental Protection Licence to regulate its operations. The Company holds such a licence (Environmental Protection Licence 3534 - the EPL) issued to it by the Environment Protection Authority (the EPA). The EPL is issued pursuant to the provisions of the Protection of the Environment Operations Act 1997 (the POEO Act).

2. The EPL contains two conditions that are relevant for consideration in these proceedings. The first is condition O1.1. This provision was in the following terms at the time of the Company’s offending conduct:

Licensed activities must be carried out in a competent manner. This includes:

(a)   the processing, handling, movement and storage of materials and substances used to carry out the activity; and

(b)   the treatment, storage, processing, reprocessing, transport and disposal of waste generated by the activity.

3. It is the breaching of this condition which provides the foundation for Charge 1 to which the Company has pleaded guilty.

4. The second relevant condition in the EPL is condition R1.1. This provision was in the following terms at the time of the Company’s offending conduct:

The licensee must complete and supply to the EPA an annual return in the approved form comprising:

(a)   a Statement of Compliance;

(b)   …

5. It is the breaching of this condition which provides the foundation for Charge 4 to which the Company has pleaded guilty.

The Company’s recent interactions with the EPA

6. Officers of the EPA have undertaken inspections of the Company's piggery on a number of occasions. Since at least 2013, the EPA has been concerned about what that organisation considered to be the environmental inadequacy of the Company's activities. The history of the interaction between the Company and the EPA over that period requires setting out in some little detail. This appears below:

• On 20 December 2013, the EPA issued a clean-up notice to the Company.

• On 28 February 2014, the Company sent the EPA a remedial action plan.

• On 24 December 2014, the EPA varied the EPL and issued a variation notice to the Company.

• On 7 January 2015, the EPA received the Company's annual return for the period 13 November 2013 to 12 November 2014 which stated that the Company complied with all of its licence conditions during the reporting period.

• On 20 March 2015, the EPA sent the Company a letter stating that the Company had failed to report non-compliances with the EPL in its annual return.

• On 2 April 2015, the EPA issued the Company an official caution for an alleged breach of s 64(1) of the POEO Act for failing to comply with conditions M1.2, M2.2 and R4.1 of the EPL.

• On 15 September 2015, the EPA issued a penalty notice to the Company for an alleged breach of s 64(1) of the POEO Act for failing to comply with condition U1.1 of the EPL.

• On 7 January 2016, the EPA received the Company's annual return for the period 13 November 2014 to 12 November 2015 which stated that the Company complied with all of its licence conditions during the reporting period.

• On 6 April 2016, the EPA sent the Company a letter identifying five alleged non-compliances with the EPL conditions and stating that the Company had failed to report non-compliances with the EPL in its annual return.

• On 24 November 2016, the EPA issued the Company an official caution for an alleged breach of s 66(4) of the POEO Act for submitting a false or misleading certificate in relation to the Company's annual return for the period 13 November 2014 to 12 November 2015.

• On 11 January 2017, the EPA received the Company's annual return for the period 13 November 2015 to 12 November 2016 which stated that the Company complied with all of its licence conditions during the reporting period.

• On 9 February 2017, the EPA sent the Company a letter stating that the Company had failed to report non-compliances with the EPL in its annual return for the period 13 November 2015 to 12 November 2016, namely, a non-compliance with condition R4.1.

The charges

Introduction

7. On 27 July 2017, the EPA filed four Summonses with the Court. Each of the Summonses charged the Company with a separate breach of the POEO Act.

8. Each of the charges set out the particulars of the conduct alleged by the EPA to provide proper foundation for establishing the Company's guilt of each of those offences. It will be necessary to note the particulars pleaded by the EPA with respect to Charges 1. However, whilst there were comparatively minor procedural issues requiring my determination concerning Charges 2 and 3 (matters dealt with toward the conclusion of this decision), the EPA did not pursue these latter charges during the course of the hearing before me.

Charge 1

9. Charge 1 was in the formal terms set out below:

Matter 229320 of 2017

… on or about and prior to 19 December 2016, at or near 315 Mooneys Lane, Ellangowan, in the State of New South Wales, it committed an offence against section 64(1) of the Protection of the Environment Operations Act 1997 in that it was the holder of a licence, a condition of which was contravened by a person.

10. The basis for this charge comes from the particularised inadequacies of the Company's management of effluent and waste generated from the activities of the piggery regulated by the EPL. In the originating Summons for this charge, these inadequacies were particularised as follows:

c.   Manner of Breach

Effluent and waste generated from the licensed activities was dealt with in the following circumstances:

i.   there was no monitoring of sludge volumes in the Effluent Dam; and or

ii.   the face of the Effluent Dam was leaking; and or

iii.   the embankment of the Effluent Dam was not covered with grass or similar; and or

iv.   the embankment of the Effluent Dam had woody weeds growing on it; and or

v.   effluent and waste water was irrigated onto soils that were saturated; and or

vi.   effluent, waste and waste water was disposed of onto soils that did not have capacity to utilize and receive nutrients.

11. At the commencement of the hearing on 6 June 2018, I indicated to the Prosecutor that the particulars being linked by “and or” were unacceptable as they did not specify what were the precise factual elements said to support the charge. After a short adjournment, the Prosecutor sought, and was granted leave, to amend the particulars so that all of (i) to (vi) were to be linked, solely, by the word “and” and were thus pleaded cumulatively (Transcript, 6 June 2018, page 10, lines 10 to 25).

Charge 2

12. Charge 2 was in the formal terms set out below:

Matter 229321 of 2017

… on or about and prior to 19 December 2016, at or near 315 Mooneys Lane, Ellangowan, in the State of New South Wales, it committed an offence against section 64(1) of the Protection of the Environment Operations Act 1997 in that it was the holder of a licence, a condition of which was contravened by a person.

13. As this charge was no longer pressed, it requires no further elaboration or consideration.

Charge 3

14. Charge 3 was in the formal terms set out below:

Matter 229322 of 2017

… between about July 2015 and about June 2017 inclusive, at or near Grafton, in the State of New South Wales, it committed an offence against section 64(1) of the Protection of the Environment Operations Act 1997 in that it was the holder of a licence, a condition of which was contravened by a person.

15. As this charge was no longer pressed, it requires no further elaboration or consideration.

Charge 4

16. Charge 4 was in the formal terms set out below:

Matter 229323 of 2017

… on or about 11 January 2017, at or near Grafton, it committed an offence against section 66(2) of the Protection of the Environment Operations Act 1997 in that, as the holder of a licence who supplied information to the appropriate regulatory authority under the conditions of the licence, the information was false or misleading in a material aspect.

17. In its Statement of Compliance for the period from November 2015 to November 2016, the Company stated that it had complied with all the conditions of the EPL. This statement was untrue.

The Company's guilty pleas and the procedural history of the charges

18. All four charges had their first return on 8 September 2017 before the List Judge. All four charges were brought before the List Judge on five further occasions prior to the date of the sentencing hearing before me. There are two specific matters arising out of these procedural processes appropriate to be noted. The first arises from the orders made by Pain J on 24 November 2017. Those orders were in the following terms:

1. The proceedings be adjourned to 16 March 2018 to allow the Defendant to make representations to the Prosecutor in relation to matters that may ultimately enable the Court to make orders at the hearing on sentence under chapter 8 of the Protection of the Environment Operations Act 1997;

2.   The Defendant is to make representations to the Prosecutor in writing or before 31 January 2018;

3.   The Prosecutor is to advise the Defendant by 28 February 2018 if it accepts the representations as made by the Defendant;

4.   Liberty to apply on 2 days’ notice.

5.   Agreed Statement of Facts to be filed 9 March 2018.

19. It is to be noted that, consistent with (1) of the orders made by Pain J set out above, the parties have agreed on the terms of an Environmental Service Order (the ESO) to be incorporated in the orders finalising these proceedings. A summary of the obligations imposed by the ESO are set out later in this decision, whilst a copy of the full terms of the order is reproduced as Annexure A to this decision. Although the terms of the ESO have been agreed between the parties, the basis upon which it can be imposed pursuant to the POEO Act was a matter of dispute between the parties. The resolution of this dispute (of a purely jurisdictional and not merit nature) is dealt with later.

20. Second, it is appropriate to note that, on 24 November 2017, the Company entered guilty pleas to each of Charges 1 and 4 earlier set out. These two factors require further consideration as part of my sentencing deliberations.

The sentencing hearing

21. The sentencing hearing took place over a day-and-a-half. The parties had previously negotiated a Statement of Agreed Facts (the SOAF), a document which requires some detailed analysis for sentencing purposes. The SOAF was supported by a folder of documentary material referenced in that document. The SOAF and the supporting documents became Exhibit A. The only other evidence in the proceedings was a bundle of financial material concerning the Company and its financial position. That bundle of material became Exhibit 1. Each of these exhibits requires further analysis in this sentencing process.

22. No affidavit or oral evidence was required.

Satisfaction of guilt

Introduction

23. As I have earlier noted, the Company pleaded guilty on 24 November 2017 to two of the charges laid against it. As also earlier noted, the EPA no longer pressed two of the four charges originally laid against the Company. As a consequence, it is not necessary for me to have considered and analysed the material contained in the SOAF and supporting documents covering those two charges.

24. With respect to the two charges which remained alive for sentencing purposes, I have carefully considered that which has been agreed by the Prosecutor and the Company in the SOAF; examined the relevant elements of the supporting documents in Exhibit A; and considered the written and oral submissions of the Prosecutor and of Ms Duggan SC, counsel for the Company.

25. As a consequence, it is sufficient for me to observe that I am satisfied that the Company's guilty pleas to Charges 1 and 4 find proper legal and factual foundation in the matters set out in the SOAF and its supporting documents as establishing the matters pleaded in the amended particulars earlier described regarding Charge 1. The establishment of a proper foundation for Charge 1 itself provides a proper foundation for Charge 4.

26. It is, therefore, appropriate to record, at this point, the conclusion that the two offences pressed by the EPA have a proper foundation; the Company has appropriately pleaded guilty to those offences; and, as a consequence, the relevant beneficial provision in the Crimes (Sentencing Procedure) Act 2005 (the Sentencing Procedure Act) is engaged for consideration as later discussed.

Strict liability offences

27. Each of the offences to which the Company has pleaded guilty are strict liability offences. That means that it is sufficient for the EPA to have established a proper factual basis to demonstrate (for Charge 1) that the Company’s waste processing had not been carried out in a competent manner.

28. For Charge 4, the facts providing the proper evidentiary basis for Charge 1 established that the assertion in the Statement of Compliance that the Company had complied with the requirements of the Company’s EPL throughout the period between November 2015 and November 2016 was demonstrably false.

The Company’s environmental management deficiencies

29. In the SOAF, between (27) and (51), there is agreement about the deficiencies in the Company's environmental management of its site under the following headings:

• Woody weeds and grass on dam walls;

• Leaking effluent dam;

• Dam volumes and sludge;

• Irrigation;

• Irrigation - nutrient balance; and

• Irrigation - saturated soils.

30. The SOAF expressly notes, in (53), that the ESO specifically addresses any concerns arising from the matters set out in the SOAF under the above headings.

31. The existence of this agreement renders it unnecessary to set out in detail the basis upon which the EPA has raised those issues with the Company. It is sufficient to note that, in agreeing to the ESO, the Company has agreed to address those concerns. To the extent that deficiencies in environmental management are acknowledged and addressed in that agreement and provide a proper basis for the Company's guilty plea to Charge 1, it is also unnecessary to set them out.

32. However, I am satisfied that the SOAF and the relevant material contained in the folder of material supporting it and incorporated by direct reference in the SOAF provides a sufficient basis for me to be satisfied that entry of the guilty plea by the Company to Charge 1 was soundly based and that, as a consequence, a finding of guilt on that charge by me is warranted and the entry of a conviction is appropriate.

33. The establishment of a proper basis to found Charge 1 also establishes the proper basis for my satisfaction that the Statement of Compliance (Exhibit A, Tab 9) was false in the fashion alleged in Charge 4.

The legislation relevant to sentencing

34. There are two pieces of legislation requiring consideration in these proceedings. The first is the POEO Act, whilst the second is the Sentencing Procedure Act. It is appropriate to set out the legislative elements requiring consideration on sentencing for the remaining offences to which the Company has entered a guilty plea.

35. First, the objectives of the POEO Act include, in s 3, the following relevant elements:

3   Objects of Act

The objects of this Act are as follows:

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

(b)   …,

(c)   ...,

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

(i)   pollution prevention and cleaner production,

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

(iia)   the elimination of harmful wastes,

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

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

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

(e)   …,

(f)   …,

(g)   ….

36. In addition, with respect to offences committed in breach of this Act, s 241 mandates matters that are required be taken into account when sentencing for such offences. This provision is in the following terms:

241   Matters to be considered in imposing penalty

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

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

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

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

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

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

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

37. The Sentencing Procedure Act operates in parallel with the POEO Act. There are three provisions of the Sentencing Procedure Act that have relevance to these proceedings. The first element is the provision, s 3A, that contains the objects of the sentencing process. This provision is in the following terms:

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.

38. The second provision of the Sentencing Procedure Act that requires consideration, to the extent that it is engaged as dealt with in my subsequent detailed discussion, is s 21A of this Act. This provision sets out a range of topics that potentially require consideration as aggravating or mitigating circumstances in the context of the particular offence. It is unnecessary to set out the whole of the section, as a number of the elements contained in it are clearly irrelevant to the Company and to these offences. However, there are two observations to be made concerning this provision.

39. First, any matter said by the Prosecutor (as is here the case, as later discussed) to be an aggravating factor is required to be proved beyond reasonable doubt, whilst those factors potentially favourable to the Company are required to be demonstrated by the Company only on the balance of probabilities.

40. Second, the various elements of s 241 of the POEO Act, as set out above, also find parallel elements of s 21A of the Sentencing Procedure Act that are to the same effect. In my subsequent analysis, it is convenient to use the framework set out by this provision of the Sentencing Procedure Act but, as I do so, I have had appropriate regard to the relevant element arising from s 241 of the POEO Act.

41. The final provision of the Sentencing Procedure Act that is relevant is s 22 of that Act. This provision requires that I make an allowance for the utilitarian value of the guilty pleas that have been entered by the Company and the timing of the entry of those pleas. This provision is in the following terms:

22   Guilty plea to be taken into account

(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

(c)   the circumstances in which the offender indicated an intention to plead guilty,

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

(1A)   A lesser penalty imposed under this section must not be unreasonably disproportionate to the nature and circumstances of the offence.

(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.

Matters for consideration on sentencing

The maximum penalty

42. The maximum penalty applicable to the conduct with which the Company has been charged is $1,000,000 and, in the case of a continuing offence against s 64(1), a further penalty of $120,000 for each day the offence continues. The maximum penalty reflects a public expression by the Parliament of the seriousness of the offence charged (Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 (Camilleri's Stock Feeds)).

Harm to the environment

43. The Sentencing Procedure Act, in s 2IA, and the POEO Act, in s 241, both require me to take into consideration the extent of the harm caused, or likely to be caused, to the environment by the offences.

44. There is a little difficulty in assessing precisely what should be regarded as the actual or potential environmental harm arising out of the failure of the company to undertake its activities in the fashion required by its EPL. This arises as a consequence of the fact that much of the evidentiary material, on my reading of it, intermingles factual material relating to the deficiencies giving rise to Charge 1 (which has been pressed) and with respect to Charges 2 and 3 (which are no longer pursued by the EPA and are thus to be dismissed).

45. In the Company's written submissions on penalty, Ms Duggan wrote:

13   The subject matter of the offence goes to the daily management of the piggery. It is apparent that whilst the piggery was being operated in a generally acceptable manner in that the appropriate management infrastructure (such as effluent ponds and systems for waste management had been implemented) the day to day upkeep of that infrastructure and the utilisation of appropriate methods of management had slipped such that the general upkeep of the piggery fell below the standards expected of it.

14   It appears accepted that the consequences of the Defendant’s failures have not resulted in actual harm to the environment (Prosecutor’s submissions at [30]).

15   Whilst it is suggested that there is a likelihood of harm or potential harm (see Prosecutor’s submissions at [31]-[33]) such factors are required to be proven beyond reasonable doubt and there is insufficient material before the Court for it so find that the risks identified are real having regard to the circumstances of this case or that there is any vulnerable receiving environment that has been identified. It is notable that notwithstanding that the Prosecutor contends that the unsatisfactory situation has been in place for some years, in that time none of the risks that it identifies have come to fruition. This indicates at the very least that the risks are low. If there is a risk (which is not admitted) it can only be isolated to the Defendant’s own land.

16   This is not a case where the Defendant did nothing to attempt to meet its obligations. It is apparent that the Defendant had sought advice from appropriately qualified persons to undertake some of the work (such as the effluent pond survey, the diversion drains from the effluent dam to dam 2) and had sought to carryout appropriate nutrient removal (by grazing). The Defendant has also constructed bunding around the pig carcass pits to prevent surface water entering the pits. Such that attempts were made to address the issues relating to the management of the piggery. These actions, however, were insufficient or unacceptable to the EPA.

46. The reference in (14) above in Ms Duggan's submissions is a reference to what is said in the Prosecutor's submissions at (30), where Ms Shahnawaz wrote:

30   A lack of baseline data and ongoing monitoring means that there is limited evidence of actual environmental harm. However, soil samples taken by the EPA indicate that the concentration of phosphorus in the soil was an order of magnitude (10 times) higher than pasture requirements, indicating Utilisation Area 1 has no capacity to receive further nutrients

47. In (31) of her submissions, the Prosecutor proposed that I should conclude that it is likely that a range of adverse environmental consequences have been occasioned to the Company's land. In this context, the Prosecutor relies on Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66 at [44].

48. It is to be observed, first, that this potentiality cannot be taken into account as a factor of aggravation for the purposes of s 2IA(2) of the Sentencing Procedure Act, as any circumstance relied upon for such a purpose is required to be proved by a Prosecutor to the criminal standard. A mere likelihood of harm, in the sense used by the Prosecutor in (31) of her submissions, cannot be said to give rise to such proof.

49. As to the future potential for more risk of harm to the environment, the failure of the Company to implement the Remedial Action Plan agreed to in 2014 (a plan developed as a consequence of the Company engaging consultants to assist it improve its operations and respond to concerns expressed by the EPA) means that such risk as existed at that time has continued unaddressed until the present.

50. However, the ESO now agreed to by the Company is to be imposed as an order of the Court and a failure to abide by the obligations contained in it would have significant potential consequences for the Company.

51. As a consequence, although I am not satisfied that there has been significant actual harm to the environment, but there has been significant past potential for harm to the environment, the imposition of the ESO and it addressing a wide range of environmental issues concerning the operation of the piggery and the state of the piggery's site means that, for sentencing purposes of these two charges, I should not regard the past harm or potential future for harm as being substantial.

Mitigating subjective factors

Introduction

52. The Sentencing Procedure Act requires me, by s 21A(3), to consider whether there are any relevant, potentially mitigating factors requiring to be taken into consideration. A range of matters may require consideration for this assessment. I turn to deal with those that are potentially engaged.

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

53. The Company has no prior convictions for environmental offences and this is a factor weighing in its favour.

Likelihood of reoffending (s 21A(3)(g))

54. Although I consider it is, perhaps, unlikely that the Company will reoffend, the necessity for a degree of specific deterrence is, as later discussed.

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

55. In Chief Executive, Office of Environment and Heritage v Ausgrid (2013) 199 LGERA 1; [2013] NSWLEC 51, Pepper J summarised, at [80], the four forms of actions that would demonstrate genuine contrition and remorse (derived from Preston CJ’s decision in Environment Protection Authority v Waste Recycling and Processing Corp (2006) 148 LGERA 299; [2006] NSWLEC 419 (at [204] to [214]). The third of those actions - taking action to address the causes of the offence (relevantly, the causes of Charge 1) - is applicable in these circumstances. Indeed, the actions flowing from the ESO go significantly beyond that measure of contrition.

56. The Company’s agreement to the ESO can be regarded (and I do so) as a concrete factor demonstrating contrition and remorse in a practical fashion.

Entry of the guilty pleas (s 21A(3)(k))

57. The Company has entered pleas of guilty to the two charges remaining pressed. Whether this should be regarded as having been at the earliest appropriate opportunity is not agreed.

58. However, the Prosecutor accepts these pleas have had significant utilitarian value. Whether this should entitle the Company to a discount permissible of 25% of the penalty that would otherwise be appropriate to be imposed (R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383) is considered later.

Cooperation with the Prosecutor (s 21A(3)(m))

59. I accept that the Company has cooperated appropriately with the Prosecutor. This cooperation has been reflected in the agreement to the ESO and with the settlement of the SOAF.

Deterrence

Introduction

60. I have earlier set out the terms of s 3A Purposes of Sentencing of the Sentencing Procedure Act. It provides, in s 3A(b), that one of the purposes to be achieved by sentencing an offender is “to prevent crime by deterring the offender and other persons from committing similar offences”. I therefore turn to consider the matters of specific deterrence for the Company and that of broader, general deterrence.

Specific deterrence

61. The Company’s pleas of guilty acknowledge that it should not have conducted itself in the fashion which gave rise to these two charges.

62. It is, therefore, desirable to reinforce in the minds of the management of the Company of the unacceptability of this conduct that there be a modest element of specific deterrence in the sentences to be imposed.

General deterrence

63. It is also necessary to send a broader message of the importance of upholding the integrity of pollution licensing regime, generally. As a consequence, general deterrence is also a factor to be taken into account in this sentencing process.

The proposed environmental services order

Introduction

64. The parties have agreed to the terms of an ESO to be imposed as an outcome of these proceedings.

65. The ESO will impose a range of environmental obligations on the Company through a staged program of remedial works or activities. Each of the elements of the ESO has a specified time period from the ESO’s commencement date within which it is to be achieved. These time periods range from three months to three years. A summary of the ESO and the time periods attaching to the various elements of it are later reproduced.

The cost of the ESO

66. It is the agreed position that implementation of the ESO will cost the Company at least $147,000 plus GST. The extent to which I should have regard to the cost of the ESO as an element of my determination of the appropriate outcome of these sentencing proceedings is a matter which requires later consideration.

The scope of the ESO

67. The ESO (reproduced in full as Annexure A to this decision and more fully summarised in a later table) comprises the following elements and the timeframe within which each element is to be achieved. These are:

• Effluent irrigation and utilisation

The ESO provides immediate and staged measures concerning effluent reuse by irrigation, with regard had to soil moisture and saturation, primarily in Utilisation Areas 1 and 2.

• Monitoring and management

A Farm Management Plan that documents environmental measures and procedures must be prepared and a tamper-proof monitoring system to record the volume of irrigated effluent installed.

• Modifications

Modifications are ordered in relation to the effluent dam, Clean Water Dam 3, the carcass pits and Anaerobic Ponds 1 and 2. These implement specific changes to manage flows and remove all woody weeds, replacing some with stoloniferous grass. Written and photographic confirmation is required to be given to the EPA for certain works.

• Repairs

The ESO calls for repairs to be undertaken in relation to the seepage of effluent through the northern section of the effluent dam embankment wall and the pipeline from the piggery shed to Anaerobic Pond 2.

• Waste

Several orders set out requirements and steps to be undertaken in relation to the disposal or reuse of waste, including manure, carcasses and other waste. Onsite application areas must be an appropriate distance from water courses and capable of accommodating the nutrient loads from the waste.

68. More detail is contained in the following summarising table:

Agreed Environmental Services Order
Topic	Timeframe	Para	Summary of order	Particulars
Effluent irrigation and utilisation	Immediate and ongoing	[2]	When irrigating effluent onto the Utilisation Areas, the Defendant must keep more than 40m gap or buffer zone between the outer edge of irrigation spray reach and any drainage line.
Effluent irrigation and utilisation	Immediate and ongoing	[5]	The Defendant must irrigate 7 days a week, whenever soil moisture is low enough.	(c)(v), (c)(vi)
Waste	Immediate and ongoing	[6]	The Defendant must dry manure and other waste and lawfully dispose of or reuse it. If used onsite, the Defendant must demonstrate in the FMP that the application areas can accommodate the nutrient loads from the water and are an appropriate distance from water courses.	(c)(vi)
Waste	Immediate and ongoing	[11]	The Defendant must always slit open pig carcass stomachs and fill in pits with soil when less than 1m depth available.
Waste	Immediate and daily	[11]	The Defendant must cover exposed carcasses and other animal material.
Effluent irrigation and utilisation	Within 90 days of the date of this order	[3]	On Utilisation Areas 1 and 2 the Defendant shall implement a system of rotating irrigation, commence to grow a suitable ‘cut and cart’ crop over the pasture and ensure there are no cattle on any part of the Utilisation Areas for three weeks after effluent irrigation.
Monitoring and management	Within 90 days of the date of this order	[1]	A Farm Management Plan (FMP) must be prepared by a suitably qualified and experienced environmental consultant and provided to the EPA. The FMP must document environmental measures and address management of sludge and manure, the effluent dam, carcass and tissue disposal, water and soil monitoring and procedures including record keeping systems and standard operation procedures.	(c)(i), (c)(ii), (c)(v), (c)(vi)
Monitoring and management	Within 90 days of the date of this order	[7]	The Defendant must install a tamper-proof monitoring system to record the volume of irrigated effluent and provide a written confirmation of the meter/system to EPA.
Modifications	Within 90 days of the date of this order	[11]	The Defendant must either move or adequately bund carcass pits.
Repairs	Within 180 days of the date of this order	[20]	The Defendant must submit a report to EPA detailing methodology and timeframes for repairing the effluent dam embankment.	(c)(ii)
Modifications	Within 270 days of the date of this order	[14]	The Defendant must modify the irrigation suction pipe in the effluent dam and provide written and photographic confirmation of such works to EPA.
Modifications	Within 365 days of the date of this order	[12]	The Defendant must remove or spray woody weeds from the effluent dam wall, replace with stoloniferous grass and provide written and photographic confirmation of such works to EPA.	(c)(iii), (c)(iv)
Modifications	Within 365 days of the date of this order	[15]	The Defendant must remove or spray woody weeds from areas downslope of the piggery sheds and replace with productive pasture.
Modifications	Within 365 days of the date of this order	[19]	The Defendant must replace woody weeds around clean water dam 3 with stoloniferous grass.
Modifications	Within 365 days of the date of this order	[13]	The Defendant must install a stable outlet for clean water dam 3.
Modifications	Within 365 days of the date of this order	[18]	The Defendant must divert water flow away from clean water dam 3.
Waste	Within 365 days of the date of this order	[9]	The Defendant must remove sludge from Anaerobic Pond 2, lawfully dispose of or reuse it and provide written confirmation of the sludge removal and methods of disposal to EPA.
Modifications	Within 365 days of the date of this order	[10]	The Defendant must install a stable outlet system for Anaerobic Pond 2 and provide written and photographic confirmation of installation to EPA.
Repairs	Within 730 days of the date of this order	[8]	The Defendant must repair and reset the pipeline from the piggery shed to Anaerobic Pond 2, install a headwall and provide written confirmation of such works to EPA.
Modifications	Within 730 days of the date of this order	[16]	The Defendant must install a rock pad interceptor at the inflow point of Anaerobic Pond 1 and provide written confirmation of installation to EPA.
Modifications	Within 730 days of the date of this order	[17]	The Defendant must redesign and replace the Anaerobic Pond 1 outflow chute
Effluent irrigation and utilisation	Within 730 days of the date of this order	[4]	The Defendant must implement a ‘cut and cart’ system for the crop for the pasture on the Utilisation Areas, requiring the pasture to be cut, baled and removed offsite periodically.	(c)(v), (c)(vi)
Repairs	Within 1095 days of the date of this order	[20]	The Defendant must repair the effluent dam embankment wall.	(c)(ii)
Modifications	Within 1095 days of the date of this order	[20]	The Defendant must install an emergency spillway at the effluent dam.

The appropriate statutory basis for imposing the ESO

Introduction

69. Whilst the EPA and the Company have agreed on the terms of the ESO and on the proposition that it should be imposed, by consent, as an outcome of these proceedings, there is no agreement between them as to which provision of the POEO Act should be utilised for this purpose.

The Prosecutor’s position

70. The position advanced by the Prosecutor is that it is appropriate that the obligations arising under the ESO should be imposed utilising s 245 of the POEO Act. This section is in the following terms:

245   Orders for restoration and prevention

The court may order the offender to take such steps as are specified in the order, within such time as is so specified (or such further time as the court on application may allow):

(a)   to prevent, control, abate or mitigate any harm to the environment caused by the commission of the offence, or

(b)   to make good any resulting environmental damage, or

(c)   to prevent the continuance or recurrence of the offence.

The Company’s position

71. On the other hand, Ms Duggan proposed that the obligations in the ESO be imposed utilising the power provided by s 250(1)(c) of the POEO Act. This provision is in the following terms:

250   Additional orders

(1)   Orders

The court may do any one or more of the following:

(a)   …,

(b)   …,

(c)   order the offender to carry out a specified project for the restoration or enhancement of the environment in a public place or for the public benefit,

(d)   …,

(e)   …,

(f)   …,

(g)   …,

(h)   ….

Consideration

72. In addressing this dispute, I should make several preliminary observations. First, these two provisions are contained in Pt 8.3 of the POEO Act, one which gives this Court power to make a wide range of orders that can be made in addition to any penalty imposed for offending conduct giving rise to a specific breach of the POEO Act.

73. For this reason, the power to make these additional orders has been imported by express reference into other statutes (for example, as has been the case by the operation of s 9.56(2A) of the Environmental Planning and Assessment Act 1979).

74. It is clear that the various types of order for the imposition of which the power is invested in a court by Pt 8.3 of the POEO Act are ones which can be imposed as a consequence of conviction for an offence but they are not necessarily ones which need be imposed in addition to a monetary penalty. They may be imposed on a freestanding basis, as it were, consequent upon conviction for an offence.

75. This aspect, a matter of separate contest between the Prosecutor and the Company, requires further, subsequent consideration.

76. The Prosecutor submitted, when it became clear that the process for imposition (rather than the substance) of the ESO was in dispute (Transcript, 6 June 2018, page 42, lines 20 to 25):

Now finally on the nature of the appropriate sentence the defendant urges the Court not to impose any fine in addition to the ESO and they refer to the EPA’s guidelines in support of that proposition. Now I don’t know to what level of detail your Honour has had regard to those guidelines but the reliance on the guidelines are misplaced.

First of all they are EPA guidelines and they have no application to the task before this sentencing court but secondly the position of the EPA is as always communicated was that the EPA was not going to concede that there would be no agreement as to no fine even if an ESO was forthcoming so that has always been made abundantly clear but in any case the guidelines themselves make very clear that orders under 245(c) are not viewed as a punishment which is what these proposals are whereas s 250 orders would be an appropriate punishment. Section 250 of course refers to public environmental works for the public benefit so above and beyond whatever was discussed inter parties the order should not be seen as a punishment at all.

The benefits of the order flow to the defendant, they are not works of a public nature and I refer to the CCA decision of Dyno Nobel which is also in the prosecutor’s bundle at tab 15 and what the CCA said at 44 was that the defendant is not entitled to credit for complying with its obligations under the POEO Act essentially and that’s effectively what the defendant is urging this Court to do to give it credit for getting its operations into a state where it complies with its licence obligations and that must be incorrect at law.

77. On the other hand, the position advanced on behalf of the Company was that the statutory pathway advanced by it was not merely more appropriate, but was, as I understood the position, the sole pathway legally available. Ms Duggan submitted (Transcript, 7 June 2018, page 22, line 18 to page 23, line 9):

DUGGAN: We accept that at 1C, that we are not a public place, but we are for the public benefit. You will see in almost every authority in relation to the EPA either licensing cases or prosecutions, that the purpose of this legislation is for the public benefit. The control and protection of the environment is for the public benefit. When we look at the additional orders that the Court may make we see that there are for the purposes of these considerations activities which are personal to the defendant. For example undertake an environmental audit, D. Attend a training course, F and G. Each of these matters and what we say is the concept of the legislative scheme is that financial penalty should not be seen as the be all and end all in relation to punishment. Your Honour sees that in relation to 244, where it says:

“One or more order may be made under this Part against the offender. (2) Orders may be made under this part in addition to any penalty that may be imposed or any other action that may be taken in relation to the offence. (3) Orders may be made under this part regardless of whether any penalty is imposed or other action taken in relation to the offence.”

So what it is trying say is that there are in relation to this legislative scheme not the fine, the financial penalty being the be all and end all. Relation to 245 we see that there are orders in relation to circumstances where an event has occurred and the defendant is required to take action to clean up that event. One asks rhetorically, how can fixing the problem you caused be an appropriate penalty or punishment for the offence, but taking action to make sure an event doesn’t happen is not. When one considers the --

HIS HONOUR: Can I cut to the chase, it seems to me, is it the position that you are saying to me that that which is agreed and is behind tab 2 because it-

DUGGAN: Tab 2.

HIS HONOUR: Tab 17 rather. Is it the position that you are putting to me that because a number of things that are contained in the ESO go beyond matters that you say arise out of what is permitted by 245(c), that being the provision upon which the prosecutor relies for the making of the ESO, that it is not appropriate to make the ESO pursuant to 245(c) but that it ought be made pursuant to 250(c) because the scope of things in the ESO go significantly beyond, as you’ve been taking me through matters that are particularised in either of the charges to which your client has pleaded guilty.

DUGGAN: Yes.

78. The correct position with respect to the imposition of the ESO is that which emerges from the above exchange between me and Ms Duggan; namely, that the only available jurisdictional basis to impose the ESO in these circumstances is contained in s 250(1)(c) of the POEO Act. That arises because the environmental improvements that are proposed by the ESO (as earlier outlined) not only act as an operational benefit for the Company, but also, because of their broader prophylactic effect, operate as anticipatory protective measures to ensure that there will be no future adverse environmental impacts from any of the operational aspects addressed by the ESO. This, I am satisfied, satisfies the public benefit test in s 250(1)(c).

79. On the other hand, the provision of the POEO Act that the Prosecutor proposes should provide the basis for the ESO (s 245 of the POEO Act) can only operate with respect to conduct which gave rise to the commission of an offence charged or any environmental damage arising from it.

80. There is, therefore, a necessity for a specific link for each element of the ESO to the conduct giving rise to either of the offences to which the Company has pleaded guilty for there to be a proper foundation to use this provision to impose the ESO.

81. As can be seen from the detailed provisions of the ESO earlier summarised, a significant number of matters that are mandated to be carried out by the Company within the three-year period set by the ESO are not ones which arise directly and specifically out of the conduct giving rise to the charged offences to which the Company has pleaded guilty. Absent such a linkage, s 245 cannot provide a jurisdictional basis for the making of the ESO.

82. On the other hand, s 250(1)(c) is of a broader discretionary nature and does not require linkage to the offending conduct.

83. The consequence is that, given the breadth of the matters covered by the ESO, there is no sufficient jurisdictional foundation to impose the ESO in the provision advanced by the Prosecutor and, therefore, it follows that the position advanced by Ms Duggan on behalf of the Company is not merely preferable but constitutes the only jurisdictional avenue available to me to impose the ESO.

Imposition of penalties in addition to the cost of implementing the ESO

Introduction

84. Ms Duggan submitted that, because the ESO went beyond addressing matters which had been particularised as giving rise to either of the charges to which the Company had pleaded guilty, the Company's acceptance of the financial burden of compliance with the full range of matters provided for in the ESO should be regarded as sufficient and that no additional financial penalty should be imposed.

The Prosecutor’s position

85. During the course of her oral submissions, however, the Prosecutor said (Transcript, 6 June 2018, page 42, line 20 to page 43, line 8):

Now finally on the nature of the appropriate sentence the defendant urges the Court not to impose any fine in addition to the ESO and they refer to the EPA’s guidelines in support of that proposition. Now I don’t know to what level of detail your Honour has had regard to those guidelines but the reliance on the guidelines are misplaced.

First of all they are EPA guidelines and they have no application to the task before this sentencing court but secondly the position of the EPA is as always communicated was that the EPA was not going to concede that there would be no agreement as to no fine even if an ESO was forthcoming so that has always been made abundantly clear but in any case the guidelines themselves make very clear that orders under 245(c) are not viewed as a punishment which is what these proposals are whereas s 250 orders would be an appropriate punishment. Section 250 of course refers to public environmental works for the public benefit so above and beyond whatever was discussed inter parties the order should not be seen as a punishment at all.

The benefits of the order flow to the defendant, they are not works of a public nature and I refer to the CCA decision of Dyno Nobel which is also in the prosecutor’s bundle at tab 15 and what the CCA said at 44 was that the defendant is not entitled to credit for complying with its obligations under the POEO Act essentially and that’s effectively what the defendant is urging this Court to do to give it credit for getting its operations into a state where it complies with its licence obligations and that must be incorrect at law.

Now finally just on the costs of the ESO well that’s already been ventilated extensively earlier this morning. We would simply say that the agreed position is that the costs were in the vicinity of 147,000 and that’s where I leave that submission.

Now in terms of exhibit 1 I thank my friend and I will if I need to return to that

particular issue tomorrow. My instructor has found the correction to my submissions, para 45 so I withdraw the submission where it says that ..(not transcribable).. acknowledged in the process.

The Company’s financial position

86. In support of the proposition that no express penalty should be imposed, in addition to the general concept of fairness (my word), Ms Duggan relied on the 2015 and 2016 taxation returns of the Company and the 2016/2017 balance sheet of the Company. These documents, as a bundle, formed Exhibit 1. These documents also comprise the material to which Ms Duggan submitted I should have regard for the purposes of assessing whether I should invoke s 6 of the Fines Act 1996 (the Fines Act) in order to moderate any fine which I might otherwise be inclined to impose. The factors to be taken into account arising from Exhibit 1 are similar and are, therefore, dealt with together in this analysis and consideration.

87. The Prosecutor objected to the tender of this material on the basis that the documents were not signed. I ruled that the material should be admitted with the transcript recording (Transcript, 6 June 2018, page 20, lines 19 to 27):

HIS HONOUR: Yes. s 69 of the Evidence Act contained an express provision that creates an exception to the hearsay rule for the admission of business records of a party. I have been asked to admit into evidence financial statements for the year ending 30 June 2017 of the defendant and documents entitled Company Tax Returns for 2015 and 2016 that are in the form produced electronically consistent with the electronic records of the Australian Taxation Office. All documents bear the Australian Business Number of the defendant. I propose to admit them pursuant to s 69 of the Evidence Act as a bundle and they become exhibit 1.

The Company’s financial position

88. The material available for analysis in the taxation returns is far more limited than that which is contained in the 2016/2017 balance sheet.

89. The 2016/2017 balance sheet discloses that, whilst the Company pays some of the outgoings on the site (council rates) that would otherwise fall on the owner of the site, the value of the site (whatever it might be) is not recorded in the balance sheet as an asset of the Company.

90. Ms Duggan confirmed that the Company did not own the site. As there is no entry in the outgoings in the 2016/2017 balance sheet for rental, it is reasonable to infer, I am satisfied, that whatever entity is the owner of the site, it is in some fashion associated with the Company.

91. As I have no indication of the value of the land which comprises the site, this position provides no assistance in my financial assessment of whether the ESO is sufficient a burden to impose or, if it is not, what might an appropriate fine be.

92. Exhibit 1 comprised, as earlier noted, the Company's taxation returns for the 2015 and 2016 financial years and the Company's financial statements for the year ended 30 June 2017. They provide limited financial information. That which is relevant, it seems to me, is the fact that the gross income of the Company for each of these years was:

• 2014/15 - $1, 298,692.00

• 2015/16 - $1,203,233.00

• 2016/17 - $1,656,956

93. It is to be concluded, from these numbers, that the Company is in a strong cash flow position. It is also to be observed that, as at 30 June 2017, the Company had current assets of $263,910, which, when combined with the non-current assets of $138,028, led to a total asset position of $401,938.

94. Finally, it is to be observed that, in the expenses’ details provided for 2016 and 2017 (set out in the profit and loss statement for the year ended 30 June 2017), there are some numbers that have quite significant variations between the years and for which I have no explanation. For example, in 2017, the Company spent nearly $270,000 on consultants, whilst it was less than $20,000 the year before. On the other hand, wages for 2017 were less than $40,000, whilst the previous year they had been nearly $180,000. It is also to be observed that, although, in 2016, the profit and loss statement shows that a significant loss was made, in 2017 that position had been turned round and the Company made a modest profit.

95. The overall conclusion to be drawn from this, I am satisfied, is that the Company has an asset base which would permit the imposition of a financial penalty on it; sufficient cash flow to be able to manage payment of such a financial penalty (even if an application to pay by instalments might need to be made); and, at least, for the most recent year, about which I have information, the Company is trading profitably.

96. In addition to all of these matters satisfying me that the Company has the financial capacity to pay a financial penalty, there is no basis, therefore, on the limited financial information available to me, that would permit me to conclude that the invocation of s 6 of the Fines Act would be appropriate in these circumstances.

97. However, I have earlier explained why the appropriate basis to found the making of the ESO is in s 250(1)(c) of the POEO Act because of the public benefit, in a broader sense, to be obtained from implementation of the ESO. Although, in a risk avoidance sense, the Company will also obtain a significant benefit from the implementation of the ESO, I consider it appropriate to have regard to the broader environmental benefit in assessing the financial penalty which it is appropriate to impose.

98. I have also had regard to the agreement between the Prosecutor and the Company as to the not insubstantial costs to be paid by the Company as set out in the orders at [123] (EPA v Barnes [2006] NSWCCA 246).

Conclusion on the imposition of penalties

99. I have concluded that it is appropriate to impose a financial penalty on the Company for each offence, with the money to be diverted to the Environmental Trust Fund (the Trust) rather than simply imposed as a fine.

100. This is appropriate because the funding obligations arising under the ESO are all to be applied to works of an environmental nature on the site, whilst diversion of the financial penalty appropriate to be imposed on the Company to support broader environmental purposes provides the opportunity for distinct off-site public benefits to arise from the Company’s offending conduct.

101. It is to be observed that the Prosecutor does not propose any specific project which might be funded as a public environmental benefit and thus the payment to the Trust is the appropriate method for contributing to the broader environmental benefit of the community.

The Company’s guilty pleas

Introduction

102. The guilty pleas were entered on the fourth occasion before Pain J on 24 November 2017. The three previous occasions were adjourned by consent. On the third occasion (before me on 3 November 2017), the Short Minutes of Order made expressly directed that:

2.   The proceedings are adjourned to 24 November 2017 for plea or mention, including to allow the Defendant time to consider the content of the Prosecutor's written response referred to in order 1 above.

The Prosecutor’s submissions concerning the guilty pleas

103. In her written submissions on the benefit of the Company’s guilty pleas, Ms Shahnawaz wrote:

(63) The Defendant entered a guilty plea and is entitled to a discount on penalty: s 21A(3)(k) CSP Act. A plea of guilty plea to the two charges was entered on the fourth occasion, after charge negotiations to withdraw other charges. SOAF 3, 9

104. The Prosecutor’s oral submissions on this point were (Transcript, 6 June 2018, page 39, lines 33 to 43):

Now I turn to the subjectives, para 21 of the defendant’s submissions says that the defendant is entitled to the full discount for the utilitarian value of the early entry of the plea, that is incorrect. The plea was entered on the fourth occasion and the test is the earliest available opportunity, not the first reasonable opportunity, in that respect I refer to Preston J’s observations in the Turnbull matter which is in the prosecutor’s bundle at 12, that is tab 12 and the relevant paragraph citation is 207 where Preston J says various reasons were given at each court attendance before the plea of guilty was entered, et cetera, et cetera but he says that the reason for delaying and entering a plea of guilty is generally irrelevant. The fact that the chief justice has said in numerous cases but I have only referred to one.

The Company’s submissions concerning the guilty pleas

105. The Company’s written submissions on the benefit to be afforded to the Company were:

(21)   The Defendant pleaded guilty to the offence on the first reasonable occasion and would therefore be entitled to the full discount for the utilitarian value of the early entry of the plea.

106. In her oral submissions, Ms Duggan said (Transcript, 7 June 2018, page 19, lines 4 to 37):

Now the other matters which the Court is entitled or required to take into account is the subjective considerations. The first matter that we identify for which we are criticised is the plea of guilty and the assistance to the prosecutor.

Now your Honour in relation to the matter you were taken to Turnbull, and Turnbull is quite a different circumstances to this one. What your Honour will see from the court file is that after my instructing solicitors were retained an adjournment was sought because the expert that had been retained by the applicant to advise him suffered an illness that meant that he could no longer continue and a new expert was required to be retained, and my instructing solicitor asked the court to note that on the file.

The next occasion it was adjourned was because the parties were engaging in discussions for the purposes of the preparation of the environmental services order to see whether or not that could be agreed, and if that could be agreed the consequence would be potentially a change in the plea.

This is not a case where my client was randomly adjourning the matter to try and put it off, nor was it a circumstance where there was any inconvenience to the prosecutor, for example we didn’t adjourn it and require them to put on more evidence or something along those lines. So when we are looking at the utility of the early plea the question of utility is, has the Court allocated time for a hearing on a not guilty plea, that’s not the case here. Were the adjournments so that further work or particulars or requirements could be made from the prosecutor in order for the defendant to determine whether or not he should or it should plead guilty, not the circumstance in this case. Was the adjournment as a consequence of an action undertaken by the defendant in relation to the first one, the answer to that is clearly, no.

So we may not have pleaded guilty on the first occasion, but what we say is that it was the first reasonable occasion and the utility of the plea is still one that warrants if not the full discount, close to the full discount for utilitarian value of the plea.

107. I am satisfied that I should regard these guilty pleas as having been entered at the earliest reasonable occasion. I so conclude for the reasons advanced by Ms Duggan. The reasonableness of this approach is reinforced by the beneficial nature (both public and private) to arise from implementation of the terms of the agreed ESO. This means that a sentence discount of 25% is appropriate to be applied to the penalty for each of Charge 1 and Charge 4.

Conclusion on sentencing

Characterisation of the offending conduct

108. Determining appropriate penalties requires me to have regard to whereabouts within a range of seriousness the offending conduct should be regarded as falling, having regard to the maximum penalty the offences.

109. Camilleri's Stock Feeds (at [698]) confirmed that:

The task of a court is to assess the relative seriousness of the offender’s particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalty set by the legislature from zero to the maximum.

110. The upper limit for the range within which the sentence for each offence falls must not exceed that which is proportionate to the gravity of the offence in light of its objective circumstances (Veen v The Queen (No 2) 164 CLR 465; [1988] HCA 14). The lower limit is fixed to permit allowance for subjective factors, as those relevant to the offender cannot produce a sentence that fails to reflect the offences’ objective seriousness.

111. Consistent with this, it is necessary to categorise the objective seriousness of the behaviour constituting the offence, in these proceedings, as falling somewhere within a range between the “least bad case” and the “worst category” of such conduct. I am satisfied that the offending conduct, in each instance here, should be characterised as being toward, but not at, the bottom of the low range of such offending conduct.

112. It is therefore necessary for me, having regard to all the objective and subjective factors which required to be weighed concerning the offender and its offending conduct in each instance, that I undertake the necessary instinctive synthesis (Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25) to determine what the appropriate penalties to be applied are to be.

The starting penalties

113. First, I observe that, despite the valiant endeavours of Ms Duggan to persuade me that no additional financial penalty should be imposed for either offence in light of the extensive nature of the ESO and its cost of implementation, I am unable to accept this proposition.

114. It is to be observed that, although I have earlier explained why the appropriate statutory basis for imposing the ESO is to be found in s 250(1)(c) of the POEO Act because of the public benefit that will come from implementation, nonetheless, it is also to be noted that, in company with that public benefit, there is also a considerable prophylactic private benefit to the Company. This private benefit arises, as can be seen from the terms of the various measures earlier set out as forming elements of the ESO, because the otherwise potential risks to the Company of further enforcement action will be eliminated (at least with respect to those aspects of the Company's activities subject to those improvement measures).

115. However, I do have regard to the not insignificant cost of implementation of the ESO (albeit costs to be spread over a three-year period) as a significant factor to be taken into account in my determination of penalty.

116. Having undertaken this process, I am satisfied that the appropriate starting penalty for each offence should be $20,000.

Discount for the early guilty pleas

117. As the Company is to be regarded as having entered its guilty pleas to the two offences at the earliest available opportunity (accepting that the period of negotiation with the EPA did not constitute any unreasonable delay for this consideration), the Company is entitled to a 25% discount on each of these penalties, resulting in a penalty of $15,000 being appropriate in each instance.

Totality and accumulation

118. As these two charges can reasonably be regarded as arising out of the same course of conduct, it is appropriate to consider questions of totality and accumulation of the penalties. This requires a consideration of the appropriateness of the overall total penalty which should be imposed. In the circumstances, I am satisfied that there should be some amelioration of the total penalty in reflection of this.

119. There were no submissions made to me as to what would be the appropriate approach to take in such circumstances (particularly if some reduction of one of the sentences was appropriate for this purpose (as I consider it is)) and as to which might be regarded as the more serious offence. As a consequence, I am satisfied that I should treat Charge 4 (the furnishing of the defective annual compliance statement) as being, marginally, the more significant of the two offences, I therefore propose to impose a $15,000 penalty with respect to that charge.

120. However, I propose to impose a penalty of $12,000 on Charge 1, with this $3000 reduction in the second penalty being reflective of the need to have regard to the principles of totality and accumulation in these circumstances.

Disposal of Charges 2 and 3

121. As the EPA has decided not to press these two charges, it is appropriate that both be dismissed.

Orders

122. It follows from that which I have set out above, that the orders of the Court are:

In Matter 229320 of 2017

1. Signium Pty Ltd (the Defendant) is convicted of an offence against s 64(1) of the Protection of the Environment Operations Act 1997 in that it was the holder of an Environment Protection Licence, a condition of which licence was breached by the Defendant;

2. The Defendant is ordered to pay the sum of $12,000 to the Environmental Trust Fund established pursuant to the Environmental Trust Fund Act 1998.

In Matter 229323 of 2017

(1) Signium Pty Ltd (the Defendant) is convicted of an offence against s 66(2) of the Protection of the Environment Operations Act 1997 in that, as the holder of a licence who supplied information to the appropriate regulatory authority under the conditions of the licence, the information was false or misleading in a material aspect;

(2)   The Defendant is ordered to pay the sum of $15,000 to the Environmental Trust Fund established pursuant to the Environmental Trust Fund Act 1998.

In Matter 229321 of 2017

1. The charge is dismissed with no order as to costs.

In Matter 229322 of 2017

1. The charge is dismissed with no order as to costs.

Costs

123. The Prosecutor and the Defendant have agreed on the amount of costs to be paid and a payment regime to satisfy that liability. In satisfaction of costs in both matters that have resulted in the Company being convicted, the further orders of the Court are:

1. Pursuant to s 257G of the Criminal Procedure Act 1986, the Defendant is to pay the Prosecutor's legal costs in the agreed sum of $90,000.00;

2. The agreed sum is to be paid direct to the EPA in monthly instalments of $3,750.00 over a period of 24 months, with the first instalment to be paid within 28 days of the date of these orders.

The Environmental Service Order

124. As earlier noted, the Prosecutor and the Defendant have agreed on the terms of an Environmental Services Order but not on the basis by which the obligations in it are to be imposed. Therefore, the final order of the Court is:

1. Noting that the Prosecutor and the Defendant have agreed on the terms of an Environmental Services Order but not on the basis by which the obligations in it are to be imposed, the Court orders, pursuant to s 250(1)(c) of the Protection of the Environment Operations Act 1997, that the Defendant is to carry out the obligations set out in Annexure A within the times set out in that annexure.

**********

Annexure A

Agreed ESO (32.5 KB, DOCX)

Annexure A

Annexure B

Amendments

29 August 2018 - Date of orders is correctly 24 August 2018.

Decision last updated: 29 August 2018