Environment Protection Authority v Truegain Pty Limited (No 4) - [2014] NSWLEC 179

Land and Environment Court

New South Wales

Case Title: Environment Protection Authority v Truegain Pty Limited (No 4)

Medium Neutral Citation: [2014] NSWLEC 179

Hearing Date(s): 22 October, 7 and 11 November 2014

Decision Date: 14 November 2014

Jurisdiction: Class 5

Before: Pepper J

Decision:
See orders at [183].

Catchwords: ENVIRONMENTAL OFFENCES: plea of guilty to breach of licence condition - determination of appropriate sentence - no actual and low likely environmental harm - prior conviction for an environmental offence - no apology - defendant subject to substantial wasted costs due to conduct of prosecutor - entitlement of prosecutor to legal costs - entitlement of prosecutor to investigation costs - whether evidence of entitlement to investigation costs - nexus between investigation costs claimed and charge as amended - fine imposed - publication order made.

EVIDENCE: whether document setting out claimed investigation expenses hearsay - whether a business record of prosecutor - whether document created for the purpose of criminal litigation - document rejected.

Legislation Cited: Crimes (Sentencing Procedure) Act 1999, ss 3A, 21A
Criminal Procedure Act 1986, ss 248, 257B, 257G
Evidence Act 1995, ss 59, 69, 135, 137
Protection of the Environment Operations Act 1997, ss 3, 64(1), 241, 248, 250

Cases Cited: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357
Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234
Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304
Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683
Commonwealth Bank of Australia v Hattersley [2001] NSWSC 60; (2001) 51 NSWLR 333
Connell v Santos New South Wales Pty Ltd [2014] NSWLEC 1; (2014) 199 LGERA 84
Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121
Environment Protection Authority v Aargus Pty Ltd; Kariotoglou; Kelly [2013] NSWLEC 19
Environment Protection Authority v Ashmore (No 2) [2014] NSWLEC 142
Environment Protection Authority v Barnes [2006] NSWCCA 246
Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65
Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103
Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158
Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415
Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273
Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368
Environment Protection Authority v Truegain Pty Ltd [2003] NSWLEC 277
Environment Protection Authority v Truegain Pty Limited [2012] NSWLEC 41; (2012) 186 LGERA 412
Environment Protection Authority v Truegain Pty Limited (No 3) [2012] NSWLEC 78
Environment Protection Authority v Truegain Pty Limited [2013] NSWCCA 204; (2013) 85 NSWLR 125
Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198; (2010) 79 NSWLR 236
Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299
Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189
Gore v The Queen; Hunter v The Queen [2010] NSWCCA 330; (2010) 208 A Crim R 353
Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520
Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
Muldrock v R [2011] HCA 39; (2011) 244 CLR 120
Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253
R v Olbrich [1999] HCA 54; (1999) 199 CLR 270
R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
R v Wickham [2004] NSWCCA 193
Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465
Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458

Category: Sentence

Parties: Environment Protection Authority (Prosecutor)
Truegain Pty Limited (Defendant)

Representation

- Counsel: Mr T Howard SC with Ms C Novak (Prosecutor)
Mr T Game SC with Mr J Horowitz (Defendant)

- Solicitors: Office of Environment and Heritage (Prosecutor)
Horowitz & Bilinsky (Defendant)

File Number(s): 50471 of 2011

JUDGMENT

Liquid Waste Escapes from Truegain Breaching its Environment Protection Licence

The defendant, Truegain Pty Limited ("Truegain"), has been charged with breaching s 64(1) of the Protection of the Environment Operations Act 1997 ("the POEOA") as a result of contravening a condition of its environment protection licence.
Section 64(1) of the POEOA provides as follows:
64 Failure to comply with condition
(1) Offence
If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence.
Maximum penalty:
(a) in the case of a corporation-$1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or
(b) in the case of an individual-$250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
Particulars of the breach were contained in an amended summons filed on 19 December 2013. The particulars state that:
The Defendant failed to carry out its licensed activities in a competent manner in that it failed to adequately store liquid waste at 62 Kyle Street, Rutherford, NSW (the Premises) in the area in which the Trade Waste Tank (TWT) is located, in that:
(i) the pump installed on the TWT was insufficient and/or unsuitable to pump the waste to sewer;
(ii) there was no containment or inadequate controls in the event that the TWT overflowed;
(iii) no warning and/or alarm system was in place in the event that the pump stopped or the TWT overflowed;
as a consequence liquid waste was not adequately stored in the TWT and was likely to and actually did overflow between about 2 June 2010 and about 9 July 2010.
Commensurate amendments were made to the prosecutor's statement of facts, which was served in amended form on Truegain on 19 June 2014.
The summons required amendment because the original summons was found to be duplicitous at first instance by Lloyd AJ (Environment Protection Authority v Truegain Pty Ltd [2012] NSWLEC 41; (2012) 186 LGERA 412, upheld on appeal (Environment Protection Authority v Truegain Pty Limited [2013] NSWCCA 204; (2013) 85 NSWLR 125) ("the CCA Truegain proceedings"). Other than the costs implications flowing from this procedural history, it can be ignored.
Truegain pleaded guilty to the amended charge on 16 July 2014. This judgment concerns the determination of the appropriate sentence to be imposed on Truegain.

Truegain Carries On a Used-oil Re-refining Business

Most of the relevant background facts giving rise to the commission of the offence and germane to the sentencing of Truegain were contained in a comprehensive statement of agreed facts, which are recited below.
Truegain has carried on a used-oil re-refining business on the Rutherford Industrial Estate at 62 Kyle Street, Rutherford, NSW ("the premises"), since 1996.
At the premises, Truegain receives, stores and processes liquid waste by re-refining and re-processing waste oils into re-usable petroleum-based products and by processing and discharging liquid waste to the sewer.
The activities carried out by Truegain on the premises include scheduled activities under the POEOA.
A concrete-lined stormwater canal runs along the eastern boundary (which is about 340m) of the premises ("the stormwater canal"). The stormwater canal is to the east of the Tradewaste Tank ("the TWT"), down a steep embankment from the premises. The steep embankment between the boundary of the premises and the stormwater canal is vegetated with long grass and other flora.
The stormwater canal is a drainage reserve owned by Maitland City Council.
The stormwater canal is about two metres deep and is located about five metres down the embankment from the boundary of the premises. At the end of the stormwater canal (approximately 250m from Kyle Street) is Stony Creek.
Since 7 December 2000, Truegain has been the holder of environment protection licence 7638 ("the EPL") under the POEOA for the premises. The EPL permits Truegain to carry out the following activities listed in Schedule 1 to the POEOA ("the licenced activities"):
(a)petroleum and fuel production; and
(b)waste processing (non-thermal treatment).
Part 4 of the EPL contains operating conditions, including condition O1.1, which provides that:
Licenced 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

The Storage and Disposal of Liquid Waste on the Premises

Liquid waste received at the premises includes waste oil and waste water. These liquid wastes are collected by trucks from Truegain's clients and transported to the premises. Upon receipt at the premises, the waste water is separated from the waste oil. In order to separate the waste water, when the trucks arrive at the premises, a valve at the bottom of the tank on the truck is opened allowing the waste water to drain until oil can be seen coming out.
Liquid waste is also generated from Truegain's waste oil re-refining process. The waste water generated in this process typically includes constituent material such as hydrocarbons, benzene, toluene, grease and phenol.
Waste water received at, or generated on, the premises is pumped to a Waste Water Treatment Plant ("the WWTP") located on the eastern side of the premises. The WWTP was installed and commenced operating at the premises in January 2007.
Treated waste water from the WWTP is pumped to the sewer via the TWT, which is located near to the eastern boundary, near the front of the premises.
The TWT is a cylindrical, concrete, underground tank with a lid that sits at ground level. It has a volume or capacity of approximately 15,000 litres.
The TWT not only receives treated waste water from the WWTP, but it also receives septic waste from the administration building and shower block located on the premises. The TWT operates as a final holding tank for all waste water, including treated waste water from the WWTP and septic waste, prior to being discharged to the sewer.
The liquid waste contained in the TWT typically includes the constituent material referred to earlier (for example, petro hydrocarbons and benzene), sewage ("brownwater", including toilet paper) and soapy scummy water ("greywater").
There were four streams of liquid waste contained in the TWT, namely:
(a)treated waste water from the WWTP, including contaminated stormwater runoff captured on the premises and plant washing-down water;
(b)brownwater and greywater from the administration building comprising shower/basin/toilet water and liquid waste from the laboratory;
(c)brownwater and greywater from the shower block (shower/basin and toilet wastewater); and
(d)cooling tower water (water used to cool the condensers).
The treated waste water from the WWTP was pumped into the TWT. The waste from the toilets, shower, kitchen, bathrooms and the cooling water were gravity fed into the TWT.
Operating condition O1.1 of the EPL applied to the TWT. It was not a matter of dispute that the liquid contained in the TWT constituted "waste" within the meaning of that term in the POEOA (as "liquid waste"). The liquid waste was generated by the licenced activities and was stored in the TWT pending discharge to the sewer.
Treated liquid waste was pumped to the TWT from the WWTP at an approximate flow rate of 500 to 600 litres per minute.
Liquid waste stored in the TWT was pumped to the sewer through a pvc pipe which connected to the Hunter Water Corporation ("HWC") sewerage system at the corner of Kyle and Gardner Streets, Rutherford.
The top of the TWT (that is to say, the concrete cover of the TWT located at ground level) was fitted with two Lowara (CO 350/11 series) pumps ("the Lowara pumps"), only one of which operated at any one time.
When one of the Lowara pumps was in operation, it would suck up the liquid waste from the tank through a dip pipe ("spear") fitted with a screen and a non-return valve.
A flow recorder was located adjacent to the TWT and used by HWC to determine the volume of liquid waste leaving the TWT from the premises.
The Lowara pumps delivered the liquid waste via the flow recorder (water-meter) and another non-return valve to the sewer.
The maximum rate that liquid waste was pumped from the TWT to the sewer, governed by the capacity of each of the Lowara pumps, was only 450 litres per minute.
There was a high level float in the TWT which activated one of the pumps until the water level decreased to a low level float, at which time the pump stopped.
At most times when the WWTP was operating (that is, when the WWTP had already filled the TWT to the level of the high level float, and thereafter, continued to pump water to the TWT), the containment of liquid waste in the TWT constituted 'dynamic storage' in the sense that, at those times, liquid waste was being pumped into the TWT from the WWTP (by the pump located at the WWTP) and, at the same time, liquid waste was being pumped out of the TWT to the sewer (by one of the Lowara pumps).
The level of liquid waste in the TWT rose when the pump-in rate from the WWTP exceeded the pump-out rate to the sewer and fell when the pump-out rate to the sewer exceeded the pump-in rate from the WWTP. It remained constant when the pump-out rate equalled the pump-in rate. Other than the times when the TWT was used for dynamic storage, it was used for 'static storage'.
Treated waste water was pumped into the TWT from the WWTP between approximately 6am and 3pm, Monday to Friday.
Since 19 October 2005, Truegain has held a Major Trade Waste Permit ("the trade waste permit") issued by HWC. During the charge period, the trade waste permit allowed Truegain to discharge liquid waste from the premises to the sewer through the TWT, subject to certain conditions. These conditions relevantly included that:
10 The Applicant shall not without prior approval of the Corporation vary any process of discharge of trade waste or alter any treatment process at the premises that will affect or is likely to affect the quantity or quality of trade waste discharged into the sewer.
During the charge period HWC had in place a process in which it sampled the liquid waste being discharged to the sewer from the TWT in a pit (the sample pit) constructed by it immediately adjacent to the point of the actual sewer connection on the corner of Kyle and Gardner Streets.
An automated sampling machine was located in the sample pit and it collected composite samples over a 24 hour period, twice per week, of liquid waste discharged to the sewer from the TWT.
A table prepared by Hunter Water Corporation setting out the results of the analysis of those composite samples from 11 June 2009 to 6 July 2010 was provided to the Court. For each date and time entry, the constituent chemical elements of the sample were shown.
Composite samples of the liquid waste were also subjected to laboratory analysis for various parameters including chemical oxygen demand ("COD") and concentrations of petroleum hydrocarbons.
Between 11 June 2009 and 11 April 2010, the trade waste permit allowed a total discharge from the premises of 50,000 litres per day, seven days per week, with a COD limit of 7,000mg/L and a TPH concentration limit of 50mg/L.
The liquid waste was also analysed for concentrations of benzene and xylene, but only intermittently.
The results of the composite sampling were regularly provided to Truegain by HWC and Truegain was aware of the results in the year prior to the charge period. In other words, at the risk of oversimplification, Truegain was aware of the chemical composition of the liquid waste in the TWT.
During the charge period the liquid waste was tested for benzene and xylene on two occasions, namely on 3 June and 1 July 2010, and the results revealed elevated levels of each chemical in the former sample when compared to the latter sample.

Problems with the TWT

In the period prior to, and during, the charge period there were a number of overflows from the TWT. These were observed at the start of a shift when, after parking in the car park at the premises, an employee noticed that the TWT had overflowed.
There were a number of things which could precipitate the overflowing of the TWT, including:
(a)when the rate at which liquid waste was pumped from the WWTP exceeded the rate at which liquid waste was pumped out of the TWT to the sewer; and
(b)when the operating Lowara pump failed to operate properly because the pump lost prime after becoming blocked at its inlet, or because of an electrical fault.
If the operating Lowara pump failed for any reason, the level of liquid waste in the TWT would quickly rise (assuming the WWTP was operating at the time) because liquid waste was continuing to be pumped into the TWT from the WWTP at a rate of approximately 500 to 600 litres per minute.
Once the TWT was full, liquid waste would rise up through the grate situated on the lid at the top of the tank and overflow from the lid of the tank onto the ground adjacent to the tank. If a sufficient volume of liquid overflowed from the TWT, it would flow downslope towards the eastern boundary and into the stormwater canal.
The vegetation along the steep embankment between the TWT and the stormwater canal obscured visual observation of overflows from the TWT entering the stormwater canal.
The overflows from the TWT went onto the grass, which caused the ground around the TWT to become wet and boggy.
Truegain was aware prior to, and during, the charge period that there was an ongoing problem with the TWT, including that of overflow. It was common knowledge among staff and management of Truegain. Pump failure at the TWT would cause the staff toilets to back up. For example, an email, dated 12 April 2010, was sent by Mr Robert Lane (under the email name "Rutherford Supervisors") to Mr Grant Smith, the General Manager, in relation to the ongoing problem with the TWT in the following (somewhat alarming) terms (emphasis added):
Grant,
We have an OHS issue. At the current discharge rates from the water treatment plant the septic system can't cope and the toilets back up and overflow. Normally this is a problem we tolerate, today however the sink in the lunch room is filling. Can some modification to the septic or the flow rate be considered to alleviate this symptom.
Bob L
Further, it was not a matter of controversy that during the period prior to the charge period, the ongoing problems with the TWT had been brought up at meetings attended by Mr Smith and other Truegain supervisors and operators.

The 2 June 2010 Overflow

The TWT overflowed on 2 June 2010. When the TWT was overflowing, there was no flow through the Lowara pumps. The liquid that escaped from the TWT was a mixture of effluent and treated wastewater.
A partial earthen bund (or dirt hump) existed around the eastern side of the TWT, approximately eight inches high and six feet long, with a slight curve. On 2 June 2010 the waste water that had overflowed from the TWT flowed around the partial earthen bund.
Liquid waste overflowed on the eastern side of the TWT. There was soapy scummy water, toilet paper, sewerage waste and a small amount of oil around the edge of the trade waste tank.
Mr Gerard McCarthy, the WWTP operator, was informed by Mr Jeffrey Gayford, a Truegain supervisor, that the TWT was overflowing and to halt the water from the WWTP to the TWT. Thereafter, Mr Kosta Vujkovic, Maintenance Manager, and Mr Jason Franks, Transport Manager, were informed about the TWT overflow by Mr Gayford. Later that day, Mr Smith was informed that the TWT had overflowed.

Sand was spread over the wet ground around the TWT. Thus on 3 June 2010 a pile of dark sand, approximately 1m3 in size, was observed next to the TWT and black oily waste material was observed on the ground around the TWT. The black oily waste material was observed in the area between the TWT and the edge of the shower block. The black oily waste material was not seen to have entered the stormwater drain.
On 7 June 2010 the Office of Environment and Heritage (from the Enviro-line) received an anonymous report regarding an oily substance discharging into the stormwater canal from Truegain's premises.
At 10am on 16 June 2010, water in the stormwater canal both immediately to the north and south of Kyle Street was clear, with no oily material observed. Oily material was, however, observed in the stormwater canal approximately 50m south of Kyle Street.
By 10.20am on 16 June 2010, OEH received a report of oil in the stormwater canal opposite the premises.
That same day, water with an oily sheen and oily substances were observed in the stormwater canal adjacent to the TWT. Water with an oily sheen was also seen to be seeping into the stormwater canal through its wall in a location close to the TWT, and water in Stony Creek had an oily sheen and brown scum floating on its surface (photographs taken on that day were annexed to the statement of agreed facts).
Composite sample testing of the liquid waste in the TWT for 16 June 2010 revealed elevated levels of petroleum hydrocarbons.
On 17 June 2010, there was oily material around the grate at the top of the TWT and on the ground near the TWT. Sand had been placed around the TWT and downslope of the tank, and between the plant control/amenities building and the eastern boundary fence. There was hydrocarbon material on some of the vegetation and soils under the sand near the TWT. However, the water in the stormwater canal immediately to the north of Kyle Street appeared clear, with no visible hydrocarbons.
Downslope of the TWT adjacent to the premises, hydrocarbon material was visible and able to be smelled on some of the vegetation and soils on the banks of the canal outside the premises.
The waters of Stony Creek were sampled by OEH and found to contain hydrocarbon contaminants.
Significantly, it was agreed by the parties that the presence of the hydrocarbons on vegetation and in the soil in the vicinity of the TWT and in and around the stormwater canal and Stony Creek on 16 and 17 June 2010 was attributable, at least in part, to the overflow of liquid waste from the TWT in the preceding period, including in the charge period. The presence of hydrocarbons attributable to the overflow extended downstream from the TWT to Stony Creek.

The 18 June 2010 Overflow

On 18 June 2010, in order to ascertain whether there was any oil in the TWT, Truegain employees turned off the Lowara pumps. The liquid waste in the TWT subsequently rose to the top of the grate and flowed out of the TWT.
On 9 July 2010, Truegain hired an excavator operator to remove the hydrocarbon material on the embankment between the TWT and the stormwater canal.
The excavator operator observed that black oil had at some earlier time been spilt over the edge of the stormwater canal and then a mixture of sand and dirt had been thrown over the top of the spilt oil. He observed that the sand, dirt and oil mixture on the embankment spread across an area which was approximately three to four metres in width (in a north/south direction) and approximately two to three metres in length (in an east/west direction), extending approximately halfway down the embankment between the TWT and the stormwater canal.
The soil containing the sand, dirt and oil mixture was excavated and placed into a bin (2.5 metres wide, one metre high, and one metre deep).

There Was No Adequate Containment or Controls in the Event That the TWT Overflowed

It could not be disputed by Truegain that there were no adequate containment controls in the event that the TWT overflowed. In summary, first, the TWT did not have an automatic shut-off device that could have prevented an overflow, such as a motorised control valve fitted to the inlet pipe from the WWTP controlled by a high level float switch. Second, the level of liquid waste in the TWT was not monitored by a computer and could only be determined by visual inspection. And third, the TWT was not bunded. It would have been practicable for a concrete bund to be installed around the TWT to contain overflows. Such a bund was installed around the TWT after the charge period.
There was a pump motor control box in close vicinity to the TWT. A fault lamp on the pump motor control box would turn on when there was a failure of a pump on the TWT. However, the pump motor control box did not convey a warning signal to operators in the separate control room at the premises when the fault lamp switched on and the fault lamp could only be seen by someone standing outside looking at the pump motor control box. On occasion, an operator or a supervisor would notice an overflow of the TWT and take action. Any overflow would continue, however, either until it was observed and its cause was addressed, or the cause ceased for some other reason.
It was conceded by Truegain that modern process plants are typically equipped with automatic controls to prevent tank overflows, and moreover, that the use of automatic controls to prevent overflows is available and known in the industry in which Truegain operates. In addition, Truegain admitted that automatic controls could have been employed in the premises to prevent the TWT from overflowing.
After the charge period, Truegain fitted an automatic electrical shut-off valve to the TWT's inlet pipe, which terminates the flow of liquid from the WWTP to the TWT when the level in the TWT reaches approximately 50cm from its top.

The Lowara Pumps Were Unsuitable For Their Use

Again, it was not a matter of serious debate that the Lowara pumps installed on the TWT were insufficient and/or unsuitable.
Only one of the two Lowara pumps was in use at any one time in the TWT. The other was a backup pump. The Lowara pump in use at the relevant time only had a maximum flow rate of 450 litres per minute at a head of seven metres. Thus, because a maximum of 500 to 600 litres per minute of liquid waste was being pumped into the TWT and the pumps could only expel 450 litres per minute, a problem arose. Furthermore, the Lowara pumps were:
(a)general-purpose centrifugal pumps;
(b)not submersible and were sited above the water level in the TWT;
(c)did not have a set of grinding teeth at the entrance to the pump; and
(d)not self-priming.
The Lowara pumps drew from the bottom of the TWT and the intake strainer was prone to blockage. Blockages to the intake strainer slowed or halted the rate at which the Lowara pumps discharged liquid waste from the TWT to the sewer. If the WWTP was operating, and the Lowara pumps on the TWT failed, the TWT could continue filling and then overflow until the WWTP stopped pumping to the TWT. In addition, minor or temporary blockages could result in loss of prime to the Lowara pumps, and consequently, a failure of the pump to convey liquid waste from the TWT to the sewer. The Lowara pumps required manual repriming if they suffered a loss of prime.
Truegain conceded that the pumps used to operate the TWT (during the charge period) were not the most appropriate pumps for the TWT. On several occasions, recommendations for the purchase of new pumps for the TWT were submitted by the WWTP operators to the General Manager. Those recommendations were not adopted even though Truegain management was aware that the pumps on the TWT were problematic. Truegain did not purchase new pumps for the TWT (to replace the existing Lowara pumps) until the second half of 2011.
Importantly, it was entirely practical to install a submersible shredder pump, to pump liquid waste from the TWT to the sewer, which was more suitable for this purpose. Submersible shredder pumps:
(a)are specifically designed to pump sewage from a transfer pit to sewer;
(b)have, at their immediate entrance, a set of grinding teeth that is designed to shred anything that enters the pump;
(c)are located near the bottom of a tank/transfer pit; and
(d)do not rely on a spear, which may be prone to blockage.
Finally, there was no effective warning and/or alarm in place in the event that the Lowara pumps stopped or the TWT overflowed. While there was a fault lamp which would light up if there was an electrical fault with the Lowara pump, the fault lamp did not light up when the Lowara pump was cavitating. And there was no sensor installed on the TWT which was designed to provide a warning or alarm when the liquid waste reached a high level in the TWT. Experienced operators could, however, determine from the sound of the Lowara pump whether it was working properly.

The Evidence of Truegain

On behalf of Truegain, Mr Paul Lucas, a co-director of Truegain, swore an affidavit on 20 October 2014. Relevantly, he deposed that:
(a)his role in Truegain was in engineering development, process control, repairs and maintenance, and research and development. He designed the plant on the premises and oversaw its construction and implemented its commissioning;
(b)in 2010, Truegain processed approximately 11 million litres of waste oil, which generated 1 million litres of waste water;
(c)there had always been a WWTP at the premises to treat waste water generated by the recycling process;
(d)in late 2005 or early 2006, HWC was concerned with the odour caused by sewage stagnating in the TWT. In order to alleviate the problem, it had requested that Truegain divert the waste water discharge from the WWTP into the TWT before pumping it into the sewer. Previously it had been pumped directly into the sewer. This required a change to the pumps to implement the request. It was his decision to choose the Lowara pumps. He believed that they would be able to handle any solids in the TWT. HWC was provided with the specifications for the new pumps before they were installed and HWC approved the pumps prior to installation;
(e)the Environment Protection Authority audited the premises in the early 2000s and again in 2005 or 2006. WorkCover inspected the premises on approximately three or four occasions since 2005, and since 2006 HWC has attended the premises to inspect the TWT and the WWTP at least once a month. At no time did HWC suggest that the pumps were inadequate and should be replaced;
(f)he ordered that sand be packed around the TWT to soak up the 2 June 2010 overflow, and on 9 July 2010 an excavator was hired to remove the hydrocarbon material from the embankment between the TWT and the stormwater canal;
(g)in August 2010 he arranged for MJM Environmental to attend the premises to check for hydrocarbon contamination around the TWT, on the embankment, and in the stormwater canal. An MJM Environmental report following the inspection, dated September 2010, stated the following in the "Summary" in section 11:
11. Summary
The soil results for TPH, BTEX and lead were within the HIL criteria, of Class F - Commercial/Industrial including factories and industrial sites, and the Dutch target intervention levels. TPH was detected in soil results near the tank at S5, S7 and S8 in the C10-C36 range. TPH and BTEX were not detected at S1 and S2 near the creek.
The pH for the water results at W1 was slightly below the recommended pH minimum of 6.5 with a result of 6.32.
It can be seen that the samples from the creek adjacent to Truegain contained petroleum hydrocarbons at detectable levels for the C10-C36 fractions for all three samples. The NEPM GILs do not contain a guideline for TPH. It is also stated in the Australian and New Zealand guidelines for Fresh and Marine Water Quality (2000) that there is insufficient research to present a reliable trigger value for petroleum hydrocarbons in aquatic waterways. The creek water samples were all below the laboratory's detection limits, and therefore below the cleanup criteria.
The results provided in this report are limited to the area specified as sampled between the in-ground process wastewater tank and Stoney Creek.
(h)he was aware that the Lowara pumps got blocked from time to time, however, he believed that there were adequate measures in place to prevent the TWT from overflowing. He accepted, however, that those measures had been proven to be "inadequate";
(i)since 2 June 2010, Truegain has put in place the following measures to ensure that the TWT does not overflow again:
(i)an instruction to Mr Smith to inspect the TWT more frequently;
(ii)the construction of a concrete bund around the TWT in October or November 2010;
(iii)the installation of a sewage grinder submersible pump in the TWT in the second half of 2011; and
(iv)the installation of an audible high level alarm and audible extra-high level alarm in the TWT in 2014; and
(j)the total petroleum hydrocarbons per litre of waste water from the TWT indicates that approximately 0.0291% is made up of hydrocarbons. In short, the amount is very low.
In oral evidence-in-chief Mr Lucas stated that after the charge period, he was not aware of any overflows of the TWT.
Mr Lucas was cross-examined. He conceded that:
(a)at the relevant time there was no documented environmental management system to deal with spillage or overflow specifically from the TWT, and moreover, that such a document was only just being developed (but that other policies dealing with spillages were in place); and
(b)no risk assessment had been carried out in implementing the request by HWC to pump the waste water to the TWT before pumping it to the sewer, thereby resulting in the installation of the Lowara pumps, notwithstanding that because of the known differential in the pumping capacity of the Lowara pumps, there was a risk of overflow.

Sentencing Principles

The sentencing principles applicable to the commission of an environmental offence, and in particular, a contravention of s 64(1) of the POEOA, were exhaustively canvassed by the Court in Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103 (at [80] ff). The principles are only repeated here as necessary.
A basic principle of sentencing law is that the sentence imposed for an offence must reflect, and be proportionate to, the objective circumstances of the offence and the personal or subjective circumstances of the offender (Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 at 490 and Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472).
The instinctive synthesis method is the correct method of sentencing. The Court identifies all the factors relevant to the sentence and weighs their significance to arrive at an appropriate sentence (Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] and Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [35]-[39], [50]-[84] and [136]-[139]).
Although Truegain's plea of guilty to both charges entails acceptance of the proof beyond reasonable doubt of the elements of each offence, the Court must not take facts into account in a manner that is adverse to Truegain unless those facts have been established beyond reasonable doubt by the prosecutor. But if there are circumstances that the Court proposes to take into account in favour of Truegain, it is enough that these circumstances are proved on the balance of probabilities (R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at [27]; Gore v The Queen; Hunter v The Queen [2010] NSWCCA 330; (2010) 208 A Crim R 353 at [27] and [105] and R v Wickham [2004] NSWCCA 193 at [26]).
Section 3A of the Crimes (Sentencing Procedure) Act1999 ("the CSPA") sets out the purposes of sentencing an offender. In addition, s 21A of the CSPA identifies the matters that the Court must take into account when determining the appropriate sentence, including factors in aggravation under s 21A(2) and factors in mitigation under s 21A(3). These matters referred to are in addition to any other matters that are required or permitted to be taken into account by the Court under any Act or rule of law, such as, in this case, s 241(1) of the POEOA.
When assessing the objective gravity of an offence, the Court not only establishes the upper limit of the appropriate penalty, but also the lower limit beneath which the penalty should not go. Subjective mitigating features should never produce a sentence that fails to reflect the gravity of the incident or the objectives of punishment which include both retribution and deterrence (Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 at [44] and Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 at [140]).
In determining an appropriate sentence, the Court must consider the objective and subjective circumstances of the offence in the context of the relevant legislative framework (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234; Environment Protection Authority v Aargus Pty Ltd; Kariotoglou; Kelly [2013] NSWLEC 19 at [53] and Moolarben at [42]).
A proper understanding of the purpose of creating an offence is assisted by a consideration of the objects of the statute (Connell v Santos New South Wales Pty Ltd [2014] NSWLEC 1; (2014) 199 LGERA 84 at [59]). Therefore, regard ought to be had to the objects set out in s 3 of the POEOA and the matters to be considered in imposing a penalty listed in s 241 of the POEOA.
The legislative scheme reflected in the objects and operative provisions of the POEOA requires that proper and strict precautions be taken by those whose activities may cause proscribed pollution. Indeed, the adoption of that legislative scheme reflects on the part of the community "a stern policy against pollution" (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 and Moolarben at [43]).

Objective Circumstances of the Offence

The primary factor the Court must consider in determining an appropriate sentence is the objective gravity or seriousness of the offence. In determining the objective seriousness of each offence, the circumstances to which the Court may have regard include (Bentley at [163]; Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [110] and Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [48]): the nature of the offence; the maximum penalty for the offence; the harm, if any, caused to the environment by the commission of the offence; Truegain's state of mind in committing the offences; Truegain's reasons for committing the offence; the foreseeability of the risk of harm to the environment by the commission of the offence; the practical measures available to Truegain to avoid harm to the environment; and Truegain's control over the causes of harm to the environment.

Nature of the Offence

The objects of the POEOA disclose that the central mischief to which the Act is directed is to avoid, or at least reduce, pollution in order to prevent harm to human safety and the natural environment for both present and future generations (Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198; (2010) 79 NSWLR 236 at [188]).
In Orica the Court opined as follows (at [104]):
104 It is difficult to envisage industrial production that would not, having regard to the broad definitions ascribed to the various forms of pollution regulated by the POEOA, give rise to conduct that would otherwise, but for a proscribed licensing regime under that Act, be unlawful. Compliance with licence conditions is the price that entities must pay for permission to engage in potentially polluting manufacturing processes. The conditions imposed in any licence are aimed at maximising beneficial environmental outcomes and minimising environmental harm. They represent a balancing exercise between fostering economic growth and development, on the one hand, and protecting and preserving the environment now and for the future, on the other. Strict compliance with the conditions of any environmental licence is therefore necessary to ensure that this balance is achieved and that the objectives of the POEOA are met.

Truegain's failure to carry out its licenced activities in a competent manner breached condition O1.1 of the EPL, thereby contravening s 64(1) of the POEOA. The transgression was clearly incompatible with the statutory scheme and offended against the objects established by the Act for the protection of the environment, especially s 3(d) (reducing risks to human health and preventing the degradation of the environment by the use of mechanisms that promote pollution prevention and the reduction of discharges of harmful substances).

Maximum Penalty

In this instance, the maximum penalty for a breach of s 64(1) of the POEOA is $1 million. The maximum penalty for an offence reflects the seriousness with which Parliament views the offence (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and Plath at [67]).

Environmental Harm Caused by the Commission of the Offence

The environmental harm caused by the commission of an offence is a central consideration in determining the objective gravity of the offence. The concept of harm in the context of environmental offences is broad (Waste Recycling and Processing Corp at [145]-[147]).
Harm includes the potential or risk of harm, not merely actual harm (Waste Recycling and Processing Corp at [145]; Axer at 366 and Bentley at [175]). Harm can be direct, indirect or cumulative and "activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernible direct harm to human interest, should also be treated seriously" (Waste Recycling and Processing Corp at [147]).
Furthermore, s 241(1)(a) of the POEOA makes it clear that, in sentencing, the Court is to consider the "extent of the harm caused or likely to be caused to the environment by the commission of the offence". The POEOA defines "harm to the environment" in wide terms to include:
...any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution.
Despite the prosecutor's submission to the contrary, there was no evidence to the requisite criminal standard of any actual harm to the environment caused by the commission of the offence. The presence of hydrocarbons on vegetation and soil in the vicinity of the TWT and in and around the stormwater canal and Stony Creek on 16 and 17 June 2010, was only partially attributable to the overflow of liquid waste and there was no evidence presented to the Court that these hydrocarbons either had the effect of degrading the environment or resulted in pollution.
While I find that the presence of hydrocarbons occasioned by the overflow on the vegetation and the soil in the vicinity of the TWT, and in the stormwater drain and Stony Creek, had the potential or likelihood to cause harm to the environment in the wider sense of that concept, this potential was, on the evidence before the Court, slight. Nevertheless, I do not accept Truegain's submission that there was no likelihood of harm whatsoever caused by the commission of the offence.
Hence, taking all of the evidence into account, I find that the commission of the offence caused environmental harm at the very lowest end of the spectrum.

Truegain's State of Mind

The offence is one of strict liability, which means that mens rea is not an element of the offence. However, the state of mind of Truegain at the time of committing the offence is a relevant consideration when imposing a sentence. This is because a strict liability offence that is committed intentionally, negligently or recklessly will be objectively more serious than one committed accidentally (Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [42]-[43] and Gittany at [123]).
In the present case there was no question of Truegain having intentionally or recklessly committed the offence with which it had been charged. Rather, as Truegain pleaded, and as the evidence plainly demonstrates, by failing to adequately store its liquid waste, Truegain did not carry out its licenced activities in a competent manner as required under its EPL in contravention of s 64(1) of the POEOA.
Truegain knew from the testing of the waste contained in the TWT that it had historically contained contaminants. In addition, the senior management of Truegain, including the General Manager, Mr Smith, were aware that there was an ongoing problem with the TWT insofar as overflows were concerned and were aware that the Lowara pumps were not working properly. There was also an awareness that if the TWT overflowed, and if a sufficient volume of liquid waste escaped, given its close proximity to the stormwater canal, that it would travel downslope towards the eastern boundary and into the stormwater canal.
Truegain's failure to adequately store liquid waste in the TWT, given its historical knowledge of pollutants in that waste, the location of the TWT and the history of overflows and problems with the pump, was, therefore, a fundamental failure on its part to fulfil its statutory responsibility to carry out its licenced activities in a competent manner.

Reasons for Offending

A factor by which the objective seriousness of the offence may be augmented is the reason for its commission (Axer at 366, Bentley at [237] and Rae at [47]). If the offence is found to be committed for financial gain this will increase its objective seriousness (Bentley at [246]-[247] and s 21A(2)(o) of the CSPA). In the present case, there was no evidence rendering this factor operative.

Foreseeability of the Risk of Harm

The extent to which Truegain could have reasonably foreseen the harm caused by the commission of the offences is a relevant objective circumstance in determining an appropriate sentence (s 241(1)(c) of the POEOA; Camilleri's Stock Feeds at 700 and Plath at [48]).
Truegain did not cavil with the proposition that it was reasonably foreseeable that if the TWT overflowed, harm to the environment could ensue, albeit minimal harm. And nor could such a finding be resisted, especially in light of the fact that, as the email quoted above demonstrated, the senior management of Truegain, including the General Manager, were aware of the ongoing problems with the TWT.

Practical Measures Available to Truegain to Avoid or Mitigate Harm

Section 241(1)(b) of the POEOA mandates that the Court consider the "practical measures that may be taken to prevent, control, abate or mitigate" the harm identified in s 241(1)(a).
Truegain accepts that there were practical measures that could have been taken to prevent the overflow, and moreover, that although it had some risk avoidance measures in place, that it did not take all reasonable steps to prevent the overflow. These measures included: an automatic shut-off device; computer monitoring of the level of liquid waste rather than visual inspection; the installation of an overflow alarm; the installation of more suitable pumps, such as submersible shredder pumps; the erection of a bund to contain any overflow; and the design and implementation of a risk analysis in order to ascertain the effect of the installation of the Lowara pumps and the change in process whereby the liquid waste was pumped to the TWT rather than directly to the sewer.

Control Over the Causes of the Harm

The Court must consider the extent to which Truegain had control over the causes of the harm (s 241(1)(c) of the POEOA). Truegain properly conceded that it had complete control over the causes that gave rise to the offence.

Conclusion on Objective Gravity

In my opinion, and contrary to the submission of the prosecutor, the commission of the offence should be classified towards the lower end of the range of seriousness having regard to: Truegain's state of mind at the time of the commission of the offence and the absence of any aggravating reasons for its commission; the absence of any actual or more than slight potential for environmental harm; Truegain's attempts to minimise the environmental impact of the overflows; and, although tardily, its implementation of new measures and procedures in its handling and storage of liquid waste in order to ensure that no further overflows occur at the premises.

Subjective Considerations

Within the limits set by the objective seriousness of the offences, the Court must take into account subjective factors both favourable and unfavourable to Truegain contained in s 21A of the CSPA.

Truegain has a Previous Conviction for an Environmental Offence

Truegain has been convicted of one prior offence for pollution of waters in 2003 (Environment Protection Authority v Truegain Pty Ltd [2003] NSWLEC 277). In that case, the company pleaded guilty to a charge of pollution of waters as a result of an accidental spill of 30 to 200 litres of oily liquid down the embankment into the stormwater canal through an epoxy expansion joint in a bund that had failed. The escaped liquid was a mixture of waste oils and wastewater. The Court found that actual environmental harm, if in fact it had occurred, was inconsequential (at [14]) but that the spill had the potential to cause harm to vegetation and aquatic life (at [15]). The Court concluded that the objective seriousness of the harm was "at the lowest end of the range" and Truegain was fined $7,500, in circumstances where the maximum penalty at the time was $250,000.
Although the antecedent is in respect of an environmental offence, it took place seven years prior to the commission of this offence in 2010. Given its singular nature and the passage of time since the occurrence of the first offence, I do not consider that its commission amounts to an aggravating factor pursuant to s 21A(2)(d) of the CSPA (cf Orica at [171]-[182]).

Mitigating Factors

A proportionate sentence requires the Court to take into account any mitigating factors that are personal to the defendant (Rae at [55]; Gittany at [144] and s 21A(3) of the CSPA). Relevant subjective circumstances include: whether Truegain has a prior criminal record (s 21A(3)(e) of the CSPA); whether Truegain is of good character (s 21A(3)(f) of the CSPA); whether Truegain is unlikely to re-offend (s 21A(3)(g) of the CSPA); whether Truegain has demonstrated remorse for the commission of the offence (s 21A(3)(i) of the CSPA); when Truegain entered its guilty plea (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]-[155]); whether Truegain provided assistance to the regulatory authorities in the investigation and prosecution of the offence (ss 21A(3)(m) and 23 of the CSPA); and whether Truegain is likely to pay the prosecutor's legal and investigation costs of the proceedings.

Prior Criminality

Truegain's prior criminal record forecloses, in my view, recourse to the mitigating factor contained in s 21A(3)(e) of the CSPA.

Good Character

Other than the commission of the two offences referred to above, I find that Truegain is a good corporate citizen.

Likelihood of Re-offending

Truegain has undertaken a number of actions to minimise the chance of a similar incident occurring in the future. These have been described above. They include actions taken both immediately following the overflow and since the commission of the offence.
The cross-examination of Mr Lucas revealed, however, a degree of tardiness in the implementation of some of these measures. No cogent reason was given, for example, why an overflow alarm could not have been installed in the latter half of 2010, rather than 2014. Having said this, no further spillages have occurred since the commission of the offence.
Nevertheless, the delay by Truegain in instituting some of the practical measures necessary to prevent any further overflows of its liquid waste, and the fact of the prior conviction for a previous spillage of wastewater, means that I am unable to confidently conclude that the likelihood of reoffending is so low that it should be taken into account as a factor in mitigation (s 21A(3)(g) of the CSPA).

Contrition and Remorse

The contrition or remorse of an offender must be taken into account as a mitigating factor in determining the appropriate sentence for an offence (s 21A(3)(i) of the CSPA).
In Waste Recycling and Processing Corp, Preston J stated that contrition and remorse is more readily demonstrated by a corporate offender "taking actions" rather than offering "smooth apologies" through legal representatives (at [203]). His Honour identified four forms of actions that would demonstrate genuine contrition and remorse (at [204]-[214]).
Applying these factors, there is no doubt that Truegain has accepted responsibility for the commission of the offence. This was reiterated by Mr Lucas in evidence and has been, in a practical way, demonstrated by, for example, Truegain taking remedial action after the overflow, engaging the services of MJM Environmental to advise it on what further clean-up steps were required, and by implementing practical measures to ensure that no further overflows from the TWT occurred. The Court takes these matters into account.
However, there is missing any statement of regret or apology for the commission of the offence by Truegain. This is not unimportant. There is, in my opinion, a meaningful difference between a defendant accepting responsibility for its unlawful conduct and a defendant expressing genuine remorse for what it has done and the harm (or in this case, potential or likely harm) caused by its unlawful acts. Both must be present in order for the Court to give full weight to this mitigating factor.

Early Guilty Plea

It was agreed that Truegain pleaded guilty at the earliest available opportunity (within a month of receiving the prosecutor's amended statement of facts, that is to say, on 16 July 2014) and that therefore it was entitled to a discount of 25% (ss 21A(3)(k) and 22 of the CSPA and Thomson at [160]).

Assistance to Authorities

Both during the investigation of the commission of the offence and during the preparation of the proceedings for hearing, Truegain cooperated with the prosecutor. This culminated in the filing of the agreed statement of facts. This assistance should be taken into account as a mitigating factor in Truegain's favour (ss 21A(3)(m) and 23 of the CSPA).

Costs

The Court is empowered to order an offender to pay the prosecutor's legal costs of the proceedings pursuant to ss 257B and 257G of the Criminal Procedure Act 1986 and its investigation costs pursuant to s 248 of that Act.
The payment of a prosecutor's costs is an aspect of punishment and should be considered in the determination of the appropriate penalty as a factor that acts to reduce the penalty (Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78] and [88]; Environment Protection Authority vQueanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415 at [248] and Rae at [68]). Therefore, it should be factored into the determination of the appropriate penalty.
The amended summons embodying the charge in its current form was filed on 19 December 2013. As stated above, the prosecutor then made commensurate amendments to its statement of facts accompanying the charge, which it served on 19 June 2014.
As at 19 June 2014, Truegain had incurred a total of $111,759 in legal costs and disbursements in defending these proceedings, and a total of $64,492 in legal costs and disbursements in successfully defending the prosecutor's appeal to the Court of Criminal Appeal from the judgment of Lloyd AJ concerning the duplicitous nature of the charge. In other words, the prosecutor's conduct of the proceedings up until 19 June 2014, caused Truegain to incur approximately $175,000 in irrecoverable costs. Although Lloyd AJ initially awarded Truegain its costs (Environment Protection Authority v Truegain Pty Limited (No 3) [2012] NSWLEC 78), this order was set aside by the Court of Criminal Appeal on the basis that this Court did not have jurisdiction to award costs to a defendant in the absence of the proceedings being dismissed (the CCA proceedings at [98]-[99]). Nevertheless, the Court of Criminal Appeal did not disturb Lloyd AJ's less than complimentary findings in respect of the conduct of the prosecutor that had caused the costs to be incurred by Truegain (at [100]-[102]).
It was in the context of this procedural history that Truegain submitted to the Court in these proceedings that the appropriate costs order in the present sentence proceedings was that each party should bear their own costs. There was some force in the contention.
In response, the prosecutor sought an order that Truegain be ordered to pay its legal costs, as agreed or assessed, as embodied in the amended summons filed on 19 December 2013, and the costs reasonably incurred in its investigation into the offence as particularised in the amended summons.

Wasted Costs of Truegain to be Taken into Account

In my opinion, the wasted costs incurred by Truegain up to 19 December 2013 (when the amended summons was filed) ought to be taken into account in determining the appropriate sentence to be imposed upon it.

Liability for Legal Costs

In terms of the liability for the prosecutor's legal costs (see ss 257B and 257G of the Criminal Procedure Act 1986), I am of the view that the prosecutor is not entitled to an order that Truegain pay any part of its costs incurred in relation to the charge prior to it being embodied in the amended summons filed 19 December 2013. Likewise, the prosecutor is not entitled to an order that Truegain pay any part of the prosecutor's costs incurred in relation to the interlocutory dispute concerning the duplicity of the unamended charges or an order that Truegain pay any costs incurred by the prosecutor in relation to those parts of the charge which were originally pressed but which were subsequently abandoned after the Court of Criminal Appeal found the charge duplicitous. In short, the prosecutor is only entitled to an order that Truegain pay its legal costs from 19 December 2013 onwards.
The appropriate date for Truegain's liability to pay the legal costs of the prosecutor is 19 December 2013 and, as Truegain submitted, not 19 June 2014. Although the latter date is the date upon which the prosecutor served its amended statement of facts on Truegain, in my view, the service of these facts did no more than provide additional information concerning the final form of the charge that Truegain ultimately pleaded guilty to and which is the subject of this hearing. In other words, no wasted costs have been suffered by Truegain after 19 December 2013 and the costs incurred by the prosecutor in respect of the amended charge after this date are costs for which Truegain is legitimately liable.

Liability for Investigation Costs

The prosecutor also seeks an order that Truegain pay the investigation costs incurred during the investigation of the offence, but only those investigation costs referrable to the offence as particularised in the amended summons, and not the original summons. Applying the logic above, I agree that the prosecutor is entitled to these costs.
A problem arose, however, because as the transcript reveals, the prosecutor intended, but omitted, to put any evidence before the Court as to the quantum of the investigation costs it claimed an entitlement to (T43.24-43.37):
HOWARD: ...Unless there's anything that I can say to the Court, I'm asked to, it may be that this is a little precipitant but in respect of investigation costs there --
HER HONOUR: No, it's good to know the amount.
HOWARD: The amount of investigation costs all in total is just under 50,000 as I understand it and I'm asked to indicate to your Honour that a very high proportion of those costs were the costs in, no, the investigation costs were put to be in the sum of $49,392.50 and a very high proportion of that, I don't wish to trouble my friend. It may be I don't need to go there. All I wish to do is if it's required at the end of the day in justification of the investigation costs I'm prepared to make a submission if that's required. I'll say nothing further, may it please the Court.

What the transcript does not record is that prior to Mr Tom Howard SC, counsel for the prosecutor, saying "I'll say nothing further, may it please the Court", there was a private exchange between himself and Mr Tim Game SC, counsel for Truegain, that interrupted Mr Howard and caused him to perfunctorily end his submission.
The issue was never revisited. The amount of the investigation costs claimed by Truegain was never agreed to by the parties.
This was problematic because s 248 of the POEOA expressly contemplates that the Court's power to order a defendant to pay investigation costs is (unlike the payment of the prosecutor's legal costs pursuant to ss 257B and 257G of Criminal Procedure Act) predicated upon those costs being fixed in a specific amount.
Section 248 of the POEOA states that:
248 Orders regarding costs and expenses of investigation
(1) The court may, if it appears to the court that a regulatory authority has reasonably incurred costs and expenses during the investigation of the offence, order the offender to pay to the regulatory authority the costs and expenses so incurred in such amount as is fixed by the order.
(2) An order made by the Land and Environment Court under subsection (1) is enforceable as if it were an order made by the Court in Class 4 proceedings under the Land and Environment Court Act 1979. An order made by the Local Court under subsection (1) is enforceable as if it were an order made by the court when exercising jurisdiction under the Civil Procedure Act 2005.
(3) In this section:
costs and expenses, in relation to the investigation of an offence, means the costs and expenses:
(a) in taking any sample or conducting any inspection, test, measurement or analysis, or
(b) of transporting, storing or disposing of evidence,
during the investigation of the offence.
Thus, on 7 November 2014, immediately prior to delivery of the judgment in the matter, the prosecutor sought to re-open the evidence in order to rely upon an affidavit of Mr Stephen Fuller sworn that day. Mr Fuller is a Senior Scientist employed by the prosecutor. In his affidavit, Mr Fuller purported to depose to the various scientific investigations undertaken by him during the course of the proceedings, and that the cost of these investigations amounted to $38,807. This sum was broken down in an itemised manner (by way of an amount charged per sample and analysis) in a document annexed to his affidavit, which is annexed to this judgment for convenience at annexure "A". It is this sum that the prosecutor claimed as its investigation costs.
The date on the annexure is 7 November 2014 and the document does not describe itself as an "invoice" but as "Submission: 201000162". How the document was generated, or who its author is, are not apparent from either the face of the document or from Mr Fuller's affidavit, which merely stated that:
2. I refer to my previous affidavit filed in these proceedings on 23 August 2011. In particular, I refer to my Forensic Report 201000162-FR in Annexure B to my previous affidavit (my Forensic Report) in which I conducted an analysis of the samples collected by the Environment Protection Authority (EPA).
3. The costs incurred by the EPA in preparing my Forensic Report are contained in the invoice labelled Submission 201000162 as Total for routine analyses: $33,977.00 and Total for forensic analysis: $4,400.00. A copy of Submission 20100162 is Annexure A to this affidavit.
Truegain opposed the application to re-open on the basis of delay. No other prejudice was adverted to by it.
While I had great sympathy for the position in which Truegain, and the Court, found itself due to the oversight of the prosecutor in not adducing this evidence earlier, it would nevertheless have been somewhat perverse if, having found that the prosecutor was entitled to its investigation costs (as confirmed), none were ordered due to the error. The application was therefore acceded to, but with an adjournment granted to Truegain in order to permit it to meet it.
When the hearing resumed on 11 November 2014 at 4.30pm, Truegain requested that the rules of evidence apply to the affidavit. This was opposed by the prosecutor on the sole ground that it had not received any notification that such a request was to be made. As correspondence indicated, this proved to be incorrect. Truegain had in fact notified the prosecutor either earlier that day or late the day before. There being no other reason proffered for opposing the application, it was granted.
Truegain objected to the document at annexure "A" attached to Mr Fuller's affidavit (the "submission") and all paragraphs therein that relied on it. The basis of the objection was that the document was hearsay, and was not capable of falling within the business records exemption contained in s 69(3) of the Evidence Act 1995.
Section 69 relevantly provides as follows:
69 Exception: business records
(1) This section applies to a document that:
(a) either:
(i) is or forms part of the records belonging to or kept by a person, body or organisation in the course of, or for the purposes of, a business, or
(ii) at any time was or formed part of such a record, and
(b) contains a previous representation made or recorded in the document in the course of, or for the purposes of, the business.
(2) The hearsay rule does not apply to the document (so far as it contains the representation) if the representation was made:
(a) by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact, or
(b) on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of the asserted fact.
(3) Subsection (2) does not apply if the representation:
(a) was prepared or obtained for the purpose of conducting, or for or in contemplation of or in connection with, an Australian or overseas proceeding, or
(b) was made in connection with an investigation relating or leading to a criminal proceeding.
I accept, contrary to the submission of Truegain, that the "submission" is a document that forms part of the records of the prosecutor for the purpose of a business and that contains a previous representation recorded in the document (namely, the cost of the forensic analyses) that was made by a person who directly or indirectly may reasonably be supposed to have had personal knowledge of the asserted facts contained in the document (namely, Mr Fuller, who conducted the forensic analyses) (s 69(1) and (2) of the Evidence Act).
Truegain additionally argued that, given the date of the document (created after the filing of the amended summons on 19 December 2014), the date and circumstances of the swearing of the affidavit and the fact that the amount claimed by way of investigation expenses differed from that orally stated by the prosecutor earlier in Court, it was excluded from the ambit of the exception provided for in s 69(1) by reason of either sub-section 69(3)(a) or (b) of the Evidence Act.
In my opinion, the submission of Truegain must be accepted. On the face of the document, it was created for the purpose of these proceedings. There is nothing in the affidavit of Mr Fuller that suggests a contrary conclusion ought to be adopted. The document at annexure "A" is therefore inadmissible.
Recourse to the Forensic Report referred to by Mr Fuller in his affidavit did not assist the prosecutor. While an examination of the report reveals that Mr Fuller conducted the tests referred to in the "submission" at annexure "A" and in his affidavit (the same "submission" number is found in the Forensic Report when describing the samples for oil fingerprinting), it is silent on the cost of the forensic analyses contained therein.
The prosecutor contended, in the alternative, that paragraph 3 of Mr Fuller's affidavit (quoted above) nevertheless provided a sufficient evidentiary basis for the Court to order Truegain to pay its investigation costs in the amount of $38,807, even absent the "submission".
I disagree. Again, the costs referred to in that paragraph amount to hearsay evidence, and are inadmissible pursuant to s 59 of the Evidence Act. Even if not hearsay, without any further information concerning how the costs were calculated or to what aspect of the investigation the costs were referrable, the Court would exclude the evidence under either s 135 or s 137 of the Evidence Act on the basis of its prejudice to Truegain. In short, the evidence cannot, without further detail, be tested by Truegain. Similarly, for the reasons given above, the Forensic Report provided no comfort to the prosecutor.
I therefore reject paragraph 3 of Mr Fuller's affidavit and by parity of reasoning, paragraph 12, which also made similar inadmissible representations. The remaining paragraphs of Mr Fuller's affidavit to which objection was taken by Truegain (viz, paragraphs 6, 9 and 11) do no more than state that the "submission" identifies the costs of analysing various samples, without stating what those costs are. Although of no probative value without the "submission", they are, in my view, nevertheless admissible and are allowed.
The very vice in admitting the evidence contained in the "submission" about which Truegain complained, was neatly illustrated by a careful examination of reasonableness of some of the investigation costs the prosecutor was purporting to claim. Having regard to the answers to a request for further and better particulars by Truegain provided by the prosecutor on 24 February 2012, and comparing those answers to the particulars to the original summons and the particulars to the amended summons, Truegain was able to demonstrate that there was no relevant nexus between nine of the samples for oil fingerprinting taken and analysed by the prosecutor and the offence as ultimately charged (all the samples taken at locations 1 through to 7 on the premises). This was because the samples were taken at locations that were so physically remote from the TWT, they were clearly taken for the purpose of proving the original rather than the amended charge.
Accordingly, the Court could not conclude that the prosecutor had established that the costs of this sampling and analyses had been reasonably incurred by it as a consequence of investigating the offence with which Truegain was charged (s 248(1) of the POEOA and see Environment Protection Authority v Ashmore (No 2) [2014] NSWLEC 142). This amounts to $10,800 in investigation costs. Therefore, even if I am incorrect as to the inadmissibility of the document at annexure "A", the total amount of investigation costs the prosecutor would be entitled to is $28,007.
Although strictly unnecessary given my conclusion above, for completeness I will deal with Truegain's submission that (again, on the assumption that I am wrong and the document at annexure "A" is admissible) the costs detailed in Mr Fuller's affidavit were not costs that were "incurred" by the prosecutor because Mr Fuller was employed by it, and therefore, there was no evidence that it was liable to pay these costs.
Mr Fuller is akin to an in-house solicitor and by analogy, just as a corporate entity or public regulator (such as the prosecutor) can claim its professional legal costs for the work undertaken by its employed legal representative on the premise that they are legal costs incurred by it (Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368 at 385 and 386 and Commonwealth Bank of Australia v Hattersley [2001] NSWSC 60; (2001) 51 NSWLR 333 at [20] and [21]), so too are the costs and expenses occasioned by an expert in carrying out their professional duties (such as the forensic analyses undertaken by Mr Fuller) incurred by the entity employing that expert (in this case, the prosecutor). There is nothing in the text, context or statutory purpose of s 248 of the POEOA that mandates a contrary view.
There having been no admissible evidence put before the Court as to the amount of investigation costs Truegain should pay, the prosecutor has failed to discharge its evidential burden under s 248 of the POEOA and no order can be made.

Conclusion on Subjective Considerations

The subjective circumstances of Truegain operate to mitigate to a reasonable degree the penalty that would otherwise be imposed by the Court and I consider a total discount of 50% appropriate, especially when regard is had to the approximately $175,000 wasted costs that Truegain has already incurred.

The Appropriate Sentence to be Imposed on Truegain

The imposition of a sentence serves a number of purposes. As identified above, the relevant purposes listed in s 3A of the CSPA also inform the determination of an appropriate sentence. These include: punishment (s 3A(a)); both general and specific deterrence (s 3A(b)); community protection (s 3A(c)); making Truegain accountable for its actions (s 3A(e)); denunciation (s 3A(f)); and recognition of the harm done (s 3A(g)).

Deterrence, Denunciation and Retribution

The sentence must be sufficient to specifically deter Truegain from repeating the conduct that resulted in the commission of the offence in the future in the hope that only nominal penalties will be applied. There is also a need for the sentence to serve as a general deterrent to prevent others committing similar offences against the Act (Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273 at [206] and Axer at 367). The penalty imposed should be sufficient to cause others to take the positive precautions necessary to avoid offending.
The prosecutor submitted that specific deterrence was a particularly significant element in the circumstances of the present case because of Truegain's prior conviction for an environmental offence.
I agree that the sentence imposed by the Court must be sufficient to deter Truegain from repeating the conduct that has resulted in the commission of the offence with which it has been charged and from committing any other environmental offences in the future. Although Truegain has implemented operational changes to minimise the risk of any further pollution incidents arising from the overflow of the TWT, and although I do not consider it very likely that Truegain will re-offend, nevertheless, in my opinion, the Court should have regard to specific deterrence in determining an appropriate penalty.
There is also, in my view, a need for the sentence to have embedded in it an element of general deterrence to promote the objects of the POEOA and to ensure that other holders of environmental licences comply with the conditions attached to the licence.
The imposition of an appropriate sentence serves the purpose of ensuring that retribution and denunciation are properly addressed. The sentence of this Court is a public denunciation of the conduct of Truegain and must ensure that it is held accountable for its actions and is adequately punished (Rae at [8]-[9], and ss 3A(a) and (e) of the CSPA). Accordingly, I also take these elements of sentencing into account.

Consistency in Sentencing

A relevant consideration in sentencing is the ascertainment of the existence of a general pattern of sentencing by the Court for offences such as the offence in question (Gittany at [179]-[182] and Rae at [69]). The proper approach is for the Court to look at whether the sentence is within the range appropriate to the gravity of the particular offence and to the subjective circumstances of the particular offender, and not whether it is more severe or more lenient than some other sentence that merely forms part of that range (Gittany at [182] quoting R v Morgan (1993) 70 A Crim R 368 at 371).
Of course care must be taken because each case is different and a sentence in one case does not demonstrate the limits of a sentencing judge's discretion, given the wide divergence of facts and circumstances leading to the imposition of specific penalties (Axer at 365; CabonneShire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at 312 and Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 at [54]).
The pattern of sentencing against which the present case falls to be determined is established through an examination of the relevant sentencing cases dealing with breach of licence offences under s 64(1) of the POEOA and where water pollution has been caused by failure to operate plant or equipment or carry out licenced activities in a proper or competent manner. These cases were comprehensively considered in Orica (at [222] and [223]). Although relied upon for present purposes, that analysis is not repeated here for the sake of brevity.
Relied upon by Truegain by way of comparison, Orica involved a spill of between six to twelve tonnes of nitric acid in contravention of ss 64(1) and 120 (pollution of waters) of the POEOA, which sullied approximately 70m² of groundwater. In terms of objective factors, the incident was found to have caused environmental harm at the lower end of the spectrum; Orica was found to have acted negligently; the harm was foreseeable; there were practical measures Orica could have implemented to avoid the harm; and it had complete control over the causes of the harm. In respect of subjective factors, Orica had an extensive environmental criminal history that was considered to be an aggravating factor; it had pleaded guilty early; it had provided assistance to the authorities; and it had amply demonstrated its contrition and remorse. The Court imposed a monetary penalty of $60,000 discounted by 30% to $42,000 for the s 64(1) offence.
Truegain also referred the Court to Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158. In that case, water contaminated with tailings containing cyanide and heavy metals from the defendant's gold mining processing plant discharged from a tailings dam during rainfall events into a clean water drain and remained onsite. There was actual harm to the environment and a low level of potential harm to flora and fauna. The defendant pleaded guilty early, expressed remorse and contrition, remediated the discharge and cooperated with the prosecutor. A fine of $50,000 was imposed, directed towards a nominated environmental project. The defendant was ordered to pay the prosecutor's legal and investigative costs of approximately $57,000 and a publication order was made.
I agree with the submission by Truegain that both Orica and Peak Gold are more serious cases when compared to the facts of the present matter. However, I disagree with Truegain that Truegain (the facts of which have been summarised earlier in the judgment) represents a truly comparable decision given the different (lower) penalty regime operating at the time that case was decided.

Conclusion on the Appropriate Penalty

Synthesising the objective circumstances of the two offences as mitigated by the subjective circumstances of Truegain, and having regard to the existing patterns of sentencing, I consider that the appropriate penalty for the offence is a monetary penalty.
The appropriate penalty for the breach of licence condition offence contrary to s 64(1) of the POEOA is $45,000 discounted by 50% to $22,500, taking into account the mitigating factors discussed above.

Publication Order

The parties agreed that it was also appropriate that the orders include a publication order pursuant to s 250(1)(a) of the POEOA.
In Waste Recycling and Processing Corp, Preston J noted that the Court had made publication orders in a number of cases and described their utility as improving the effectiveness of sentences as a deterrent, particularly in relation to corporate offenders, "who are susceptible to criminal stigma" (at [242]). In the circumstances of this case, I find that the making of a publication order is appropriate.
The form and manner of publication of the proposed notice was provided to the Court by the prosecutor. Truegain opposed the terms of the publication order insofar as it stated a finding by the Court that there was actual or likely environmental harm. Because the Court has not found that there was actual harm caused by the commission of the offence, but has found that there was the potential for harm to be caused, the terms of the proposed publication have been modified.

Orders

For the reasons discussed above, the Court orders that:
(1)the defendant is convicted of the offence as charged;
(2)the defendant is fined the amount of $22,500;
(3)pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, the defendant, within 28 days of this order and at its own expense, is to place a notice in the form of annexure "B" in the first 12 pages of the early general news section in the following publications, at a minimum size of 8cm by 12 cm:
(a)The Sydney Morning Herald;
(b)The Newcastle Herald; and
(c)The Maitland Mercury;
(4)the defendant is to provide to the prosecutor a complete copy of the page of the publications in which the notice appears within 14 days of the date of publication of the notices set out in order 3;
(5)the defendant is to pay the prosecutor's legal costs incurred after 19 December 2013 as agreed or assessed; and
(6)the exhibits are to be returned.
Annexure A
Annexure B[1]

[1]Annexure B

Case Title:	Environment Protection Authority v Truegain Pty Limited (No 4)
Medium Neutral Citation:	[2014] NSWLEC 179
Hearing Date(s):	22 October, 7 and 11 November 2014
Decision Date:	14 November 2014
Jurisdiction:	Class 5
Before:	Pepper J
Decision:	See orders at [183].
Catchwords:	ENVIRONMENTAL OFFENCES: plea of guilty to breach of licence condition - determination of appropriate sentence - no actual and low likely environmental harm - prior conviction for an environmental offence - no apology - defendant subject to substantial wasted costs due to conduct of prosecutor - entitlement of prosecutor to legal costs - entitlement of prosecutor to investigation costs - whether evidence of entitlement to investigation costs - nexus between investigation costs claimed and charge as amended - fine imposed - publication order made. EVIDENCE: whether document setting out claimed investigation expenses hearsay - whether a business record of prosecutor - whether document created for the purpose of criminal litigation - document rejected.
Legislation Cited:	Crimes (Sentencing Procedure) Act 1999, ss 3A, 21A Criminal Procedure Act 1986, ss 248, 257B, 257G Evidence Act 1995, ss 59, 69, 135, 137 Protection of the Environment Operations Act 1997, ss 3, 64(1), 241, 248, 250
Cases Cited:	Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Commonwealth Bank of Australia v Hattersley [2001] NSWSC 60; (2001) 51 NSWLR 333 Connell v Santos New South Wales Pty Ltd [2014] NSWLEC 1; (2014) 199 LGERA 84 Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 Environment Protection Authority v Aargus Pty Ltd; Kariotoglou; Kelly [2013] NSWLEC 19 Environment Protection Authority v Ashmore (No 2) [2014] NSWLEC 142 Environment Protection Authority v Barnes [2006] NSWCCA 246 Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65 Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103 Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158 Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415 Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273 Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368 Environment Protection Authority v Truegain Pty Ltd [2003] NSWLEC 277 Environment Protection Authority v Truegain Pty Limited [2012] NSWLEC 41; (2012) 186 LGERA 412 Environment Protection Authority v Truegain Pty Limited (No 3) [2012] NSWLEC 78 Environment Protection Authority v Truegain Pty Limited [2013] NSWCCA 204; (2013) 85 NSWLR 125 Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198; (2010) 79 NSWLR 236 Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 Gore v The Queen; Hunter v The Queen [2010] NSWCCA 330; (2010) 208 A Crim R 353 Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Wickham [2004] NSWCCA 193 Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458
Category:	Sentence
Parties:	Environment Protection Authority (Prosecutor) Truegain Pty Limited (Defendant)
Representation
- Counsel:	Mr T Howard SC with Ms C Novak (Prosecutor) Mr T Game SC with Mr J Horowitz (Defendant)
- Solicitors:	Office of Environment and Heritage (Prosecutor) Horowitz & Bilinsky (Defendant)
File Number(s):	50471 of 2011