Environment Protection Authority v Tyco Water Pty Ltd

[2005] NSWLEC 453

Land and Environment Court

New South Wales

• Amendment notes

Medium Neutral Citation:	Environment Protection Authority v Tyco Water Pty Ltd [2005] NSWLEC 453
Hearing dates:	5 April 2005
Decision date:	19 August 2005
Jurisdiction:	Class 5
Before:	Bignold J
Decision:	1. The Defendant is convicted of the offence as charged. 2. A penalty of $50,000 is imposed in respect of that conviction. 3. The Defendant is to pay the Prosecutor’s reasonable costs in the sum determined in accordance with s253(2) of the Criminal Procedure Act 1986. 4. Exhibits to remain on the Court file.
Catchwords:	Environmental Offences :- water pollution caused by sewerage effluent entering waters during sewer restoration works undertaken by contractor for Sydney Water - mitigating factors - nature and extent of Defendant's culpability
Legislation Cited:	Protection of the Environment Operations Act 1997 s120 Crimes (Sentencing Procedure) Act 1999 s10
Cases Cited:	Empress Car Co (Abertillery) Ltd v National Rivers Authority (1998) 1 All ER 481 ; State Rail Authority v Hunter Water Board (1992) 28 NSWLR 721 ; Thorneloe v Filipowski (2001) 52 NSWLR 60
Category:	Principal judgment
Parties:	Environment Protection Authority (Prosecutor) Tyco Water Pty Ltd (Defendant)
Representation:	Counsel: Mr C McElwain (Prosecutor) Mr N Hemmings QC (Defendant)   Solicitors: Solicitor for the Environment Protection Authority (Prosecutor) Allens Arthur Robinson (Defendant)
File Number(s):	50059 of 2004

Judgment

A. INTRODUCTION

1. The Defendant has pleaded guilty to a charge of an offence against s120(1) of the Protection of the Environment Operations Act 1997 (the PEO Act) in that between 14 and 15 August 2003 near Fairfield Road Bridge Fairfield it polluted waters.

2. According to the particulars endorsed in the Summons the relevant “waters” are Prospect Creek near the Fairfield Road Bridge, the relevant “pollutant” was untreated sewerage waste and “the manner in which the pollution occurred” was that the Defendant while carrying out operations to reline a sewer pipe, put in place flow diversion works which failed to operate properly, resulting in the discharge of the pollutants into the waters.

3. Section 120(1) of the PEO Act provides as follows:

120 Prohibition of pollution of waters

(1) A person who pollutes any waters is guilty of an offence.

(2) In this section:

"pollute" waters includes cause or permit any waters to be polluted.

4. The terms “pollute” and “waters” are expansively, defined in the Dictionary to the PEO Act.

5. Section 123 of the PEO Act prescribes a maximum penalty of $250,000 where the offence is committed by a corporation.

B. THE RELEVANT FACTS

6. The relevant facts are chiefly to be found in the Statement of Agreed Facts (Exhibit 1). The following factual summary is extracted from that statement.

7. In mid 2003 the Defendant (Tyco) was contracted by Sydney Water Corporation (Sydney Water) to undertake sewer renewal works (principally involving the relining of sections of the concrete sewer) on the Smithfield and Kenyon carriers located at Fairfield.

8. The contract required Tyco before undertaking the contract works to develop and adhere to a flow management plan (FMP) subject to Sydney Water’s approval, which was to operate during by-pass operations that were necessary to temporarily stop and divert flows in the carrier to enable the contract works to be undertaken on the Smithfield carrier. The contract required trialling of the FMP before the contract works were undertaken. Tyco conducted a successful trial of the FMP, overseen by officers of Sydney Water, on 26 June 2003.

9. During the course of carrying out the relining work on a section of the Smithfield carrier on 14 August 2003 Tyco established the necessary by-pass to divert the flow away from the section of the carrier being relined. The by-pass system involved the installation in the carrier of isolation plugs to temporarily stop flow and a number of pumps to divert the flow into the by-pass system.

10. The relevant by-pass system involved the installation of 2 plugs in the Smithfield carrier – one immediately upstream of the section of the carrier to be relined and the other further upstream - and the diversion of the stopped flows to the Kenyon carrier and the installation of a plug in the Kenyon carrier just before it converges with the Smithfield carrier under Polding Street North (which is an extension of Fairfield Road). It also involved the diversion of the flow in the Kenyon Road carrier to another carrier (in Dursely Road). The obvious object of the by-pass system was to temporarily free the section of the Smithfield carrier to be lined by Tyco of sewer flows which would otherwise be experienced from upstream in the Smithfield carrier and upstream in the Kenyon carrier before it merges with the Smithfield carrier, to enable Tyco to undertake the relining contract work.

11. At approximately 2.30pm after the by-pass operation was established Tyco commenced the relining work on the relevant section of the Smithfield carrier and about 1 hour later a small leak was observed by Tyco personnel in connection with the plug placed in the Kenyon carrier just before it converges with the Smithfield carrier. Thereupon work on the relining was suspended while the cause of the leak was investigated. The investigation revealed that the plug in the Kenyon carrier had failed to function properly and Tyco assessed that there was no prospect of reinstallation of the plug.

12. Tyco personnel monitored the performance of the bypass operation with the pumps applied to their full capacity.

13. Tyco personnel, including Mr Mark Segalla, the Project Manager, conducted a risk review of the by-pass system taking into account the changed conditions created by the failure of the plug.

14. After observing flows in the system and monitoring overflow points the decision was taken to resume work on the relining. This occurred at 4.30pm and about this time or soon thereafter Mr Dennis Forster, the officer of Sydney Water having responsibility for on-site surveillance of the contract works, arrived at the location and remained there for some hours.

15. There is some dispute in the evidence as to whether Mr Forster, upon his arrival, was informed by Tyco of the plug failure or was otherwise made aware of that fact. The General Manager of Tyco, Mr Brian Fenton in his affidavit sworn 17 March 2005 (Exhibit A) states that a Tyco employee, Mr Paul Clarke, had told him that he had informed Mr Forster, upon his arrival on location, of the plug failure and had shown him the failed plug and that Mr Forster remained on the scene until 1am the following morning during which time he had made observations of flow levels during the evening sewer peak period and that being aware of these circumstances, Mr Forster had not directed that the relining work cease or that it be carried out in some alternative manner.

16. This hearsay evidence was met by the Prosecutor tendering without objection the hearsay record of interview of Mr Forster conducted by Prosecution investigators on 7 June 2004 (Exhibit 4) which includes the following questions and answers:

Q 68. Are you aware of any other Sydney Water officer having been informed by Tyco of the plug failure on the night of 14 August?

A. No, I’m not aware of anybody being notified.

Q 69. Are you aware of any Sydney Water officer having been informed by Tyco of their continuing with the lining operation on 14 August 2003 after the plug failure?

A. No.

Q 70. Do you consider that Sydney Water would have taken action to stop the renewal works on 14 August 2003 after the plug failure, until a new plug was installed in the place of the failed plug, if it had been made aware of the plug failure by Tyco?

A. Not only would it have been stopped, they would have stopped there and then under my direction and until I notified other people and they could have made the decision above me. But of course Sydney – the double isolation was for safety and they didn’t – hadn’t achieved that by what’s said here now so it was - - -

17. Corroboration of the hearsay evidence of Mr Forster is provided in the hearsay evidence comprising the Prosecutor’s record of interview with Mr Henry Pisanko, an officer of Sydney Water, who had the role of Superintendent’s Representative in respect of Tyco’s contract to undertake relining works on the Smithfield carrier (Exhibit 3). That record (as corrected by Mr Pisanko’s affidavit evidence) includes the following question and answer:

Q: Were you aware that the plug failed on the 14th ? What communications with Dennis Forster did you have on the night?

A: Tony Ciliegi wasn’t on site at the time. Dennis Forster wasn’t notified of that incident. I wasn’t aware on 14 August that the plug had failed. My recollection of a conversation with Dennis Forster on the 14 th was that there were no indications of problems, that he was going to another site that evening, and that Tony Ciliegi would be on site on the 15 th. (Tony Ciliegi is another officer of Sydney Water)

18. The Prosecutor also tendered without objection the record of its interview conducted on 19 May 2004 of Mr Segalla, Tyco’s Project Manager (Exhibit 7) which includes the following question and answer:

Q: Was Sydney Water made aware of the plug failure immediately, and if not, when was this information passed on to Sydney Water?

A: No. Sydney Water’s field supervisor Dennis Forster came on-site at about 6.00 to 8.00pm to observe flows, and it was assumed that he knew about the plug failure.

19. This factual issue is raised by Tyco in mitigation of its culpability for the admitted offence (in as much as its decision to resume the relining work after its investigation of the plug failure would be seen to be the more reasonable if the decision had the support of the informed consent of Sydney Water) and as such it carries the onus of proof on the balance of probabilities: see R v Olbrich (1999) 199 CLR 270 at 281.

20. However I am not satisfied on the balance of probabilities that Tyco personnel relevantly informed Mr Forster of the plug failure when he attended the location on 14 August 2003. Indeed the preponderance of the admittedly entirely hearsay evidence on this issue clearly lies in the opposite direction. However I do not need to further resolve the conflict in the evidence other than to record my finding that I am not persuaded on the balance of probabilities that Mr Forster was informed by Tyco on 14 August 2003 that there had been a plug failure in the by-pass system.

21. On the following morning (15 August 2003) between 9 and 10am a person working for an energy company in the immediate area observed an effluent discharge from the overflow point located in the Kenyon carrier in close proximity to the failed plug. However Tyco was not informed of this observation and did not become aware of the existence of the overflow until approximately 12.20pm later that day.

22. Tyco’s Project Manager attended the overflow location and following his telephone conversation with Mr Fenton directions were given to Tyco personnel to immediately remove the partially installed liner in the Smithfield carrier so as to restore flows in that carrier. He also, about the same time, notified Mr Pisanko, of Sydney Water, of the sewerage discharge.

23. The removal of the liner required the return to the site of a large crane that had been employed in the installation of the liner.

24. At 3pm Sydney Water notified the EPA Pollution Line of the overflow discharge.

25. It was not until 6.15pm that the concrete liner was removed from the carrier and at 6.30pm normal flows in the Smithfield carrier were reinstated and the discharge from the overflow thereupon ceased.

26. At 7pm Tyco commenced and continued a clean-up operation involving pumping the contents of Prospect Creek back into the sewer line. By 9.30pm Tyco commenced pumping back to the sewer line the creek contents 1 kilometre downstream of the overflow point and by 10.30pm Tyco was pumping back to the sewer line the creek contents 1.5 kilometres downstream of the overflow point.

27. At 10pm Tyco and Sydney Water began flushing fresh water into Prospect Creek from a nearby hydrant so as to dilute the discharged effluent. A sandbag weir was created by Tyco about 2 kilometres downstream of the overflow outlet thereby containing the discharge to that section of the Creek approximately 1 kilometre upstream of the point where the Creek becomes tidal salt water.

28. In the week following the pollution incident Tyco maintained its flushing and pumping activities in the affected section of Prospect Creek until water sampling demonstrated no remaining evidence of the discharge.

29. The pollution incident discharged into Prospect Creek a large quantity of untreated human sewage. The only evidence estimating that quantity is the opinion of Mr Enrico Coiro – a civil engineer employed by Sydney Water (whose estimates were based upon manual calculation and computer modelling). His estimates of the quantity of discharge occurring between 12.30pm and 6.30pm on 15 August 2003 ranged from 0.24ML (lower range) to 2.36ML (upper range). (It is to be recalled that the first observation of overflow was between the hours of 9 and 10am on the day in question so that those estimates are to that extent necessarily conservative.)

30. The only evidence of the environmental harm or likely harm caused by the discharge is the opinion of Mr Geoffrey Coade, Senior Environmental Scientist employed by the Prosecutor since 1990. It is to be noted that Mr Coade’s opinions are based upon the estimate of the quantity of the discharge of between 2 to 5ML that had earlier been provided by Sydney Water in its report on the pollution that it was required (as licensee of the relevant environment protection licence) to furnish to the Prosecutor. (This higher range estimate considerably exceeds the higher range estimate that was an agreed fact at the trial.) Mr Coade’s affidavit describes the receiving waters of Prospect Creek as revealed by his inspection carried out on 3 June 2004 and that description includes the following:

19. In the zone between the release point and the tidal influenced part of the creek, the creek comprises mostly pools and a few riffles. The bottom is mostly clay or mud except in the riffle zones where rock and cobbles are present. The pools vary in width from about 2 to 10 metres but are typically around 4 metres. The depth is also variable but is typically less that 0.5m. In many areas the banks have been stabilised and the channel modified.

20. I estimated the flow rate to be around 1,200 litres per minute on 3 June 2004. This appeared to represent a typical base flow condition and dry-weather stream depth as the stream-bank terrestrial vegetation was not inundated and viable aquatic vegetation was growing to near the stream edge.

21. I did not investigate the aquatic fauna associated with Prospect Creek and I did not see any fish. I would expect a range of pollution-tolerant invertebrates and some species of fish (eels, carp, gudgeons, mosquito fish) in an urban creek such as this.

31. Mr Coade’s conclusions are expressed in the following passages of his affidavit:

29. The release of contaminated water to Prospect Creek on 15 August 2003 exposed parts of the Creek to a severe environmental stress for several days. In a healthy ecosystem this would have caused serious harm.

30. As Prospect Creek appears to host a somewhat degraded aquatic ecosystem, probably the result of a long period of sporadic exposure to other contaminants, the effect of the release would not be as serious. However it is discharges such as this that cumulatively damage the aquatic ecosystems of urban creeks and ensure that they remain in a degraded state.

31. The effect of the release on Prospect Creek, while serious, is unlikely to have long term effects.

32. Paragraphs 32 to 35 of the Statement of Agreed Facts (which detail the “causes of the offence”) include the following facts:

32. The failure of the plug located near to the Fairfield Road Bridge on 14 August 2003 (ie, Plug 3) changed the hydraulic characteristics of the Kenyon Road carrier upstream of the lining works. The pumps operating upstream of the failed plug were unable to pump at their full capacity because the liquid waste they were pumping was at a lower level than expected.

33. Tyco’s decision to rely on the pumping system notwithstanding the plug failure and the existence of an intervening overflow point resulted in the incident.

33. An additional fact that is not referred to in the Statement of Agreed Facts was raised by the Defendant as being relevant to the question of the “causes of the offence An additional fact that is not referred to in the Statement of Agreed Facts was raised by the Defendant as being relevant to the question of the “causes of the offence”. This fact concerns the asserted unawareness on the part of Tyco of the existence of the overflow discharge pipe from which the pollution incident emanated. This fact is raised in paragraph 30 of Mr Fenton’s affidavit in the following terms:

30. The overflow into Prospect Creek occurred because the existence of the KC01 Overflow Point, having not been identified in the approved FMP, was not taken into account in the risk assessment of the location of the isolation plugs.

34. Under cross-examination it was put to Mr Fenton that Figure 1 showing the by-pass layout plan in the approved Flow Management Plan disclosed the existence of the overflow discharge point from which the discharge in the present case occurred. Mr Fenton agreed that the feature was shown on the plan but added “it was just a line on paper, which if Tyco had known to be an overflow pipe in actuality would have been isolated in the by-pass scheme”.

35. Mr Fenton went on to say that the existence of the relevant overflow pipe had not been identified in the information flow from Sydney Water and had it been so identified it would have been seen to be a risk (and presumably would have been safeguarded).

36. At this stage in the cross-examination an extract of the contract between Tyco and Sydney Water outlining the Contractor’s responsibilities was put to Mr Fenton. The extract (Exhibit 8) includes the following statement:

Information Provided by the Principal

Notwithstanding that the Principal has provided or provides to the Contractor information concerning the Site or the design of the Works, this information could be incomplete or include errors and is provided without responsibility. The Contractor must not rely upon the information but must independently check the accuracy or otherwise of all information.

37. Mr Fenton acknowledged his awareness of the contents of this extract but said that it was a standard provision in every contract from Sydney Water but that “it was impossible to achieve” (compliance therewith).

38. It is a little surprising given the very extensive investigation of the pollution incident, conducted by the Prosecutor involving detailed reporting on the incident, both by Tyco and Sydney Water, that the fact of Tyco’s unawareness of the existence of the relevant overflow discharge feature on the Kenyon carrier in close proximity to the location of the failed plug only came to light with the emergence of Mr Fenton’s affidavit (sworn on 17 March 2005).

39. It was on the basis of Mr Fenton’s evidence (and despite the contents of the Statement of Agreed Facts on the subject of “the causes of the offence” which did not include this fact) that Senior Defence Counsel submitted that but for the existence of the overflow pipe of which Tyco was unaware, the pollution incident would not have occurred.

40. The existence of the discharge pipe from which the sewage overflow occurred obviously and logically was a precondition of the subject pollution incident. So much is implied in the agreed fact stated in paragraph 33 of the Statement of Agreed Facts as follows:

Tyco’s decision to rely on the pumping system notwithstanding the plug failure and the existence of the intervening overflow point resulted in the incident. (my emphasis)

41. However the agreed fact concerning the existence of the overflow point is silent on the question whether Tyco relevantly knew of its existence, being the matter raised in mitigation by Mr Fenton’s evidence.

42. On this issue in mitigation (upon which the Defendant bears the onus of proof on the balance of probabilities) there is no relevant evidence except for Mr Fenton’s evidence and for the fact that surprisingly it does not appear to have been raised or explored in the extensive investigations of the pollution incident conducted by the Prosecutor before it commenced the present prosecution. Whereas Mr Fenton’s testimony (which I accept on this point) establishes the probability that Tyco did not have actual knowledge of the existence of the relevant overflow pipe it does not negate the probability of Tyco’s constructive knowledge of its existence by virtue of the content (admittedly oblique) of Figure 1 to the Flow Management Plan in combination with Tyco’s contractual responsibilities under its contract with Sydney Water. Accordingly on this matter of mitigation I am prepared to find that in preparing the Flow Management Plan and in operating the by-pass system at the time that it was relining the section of Smithfield carrier when the pollution incident occurred, Ty co did not have actual knowledge of the existence of the relevant overflow pipe, but that it did have constructive knowledge of that fact given the bases for that knowledge I have identified. The effect of this finding is that the absence of actual knowledge is a mitigating factor in terms of Tyco’s culpability but that mitigating force is diminished by virtue of its relevant constructive knowledge of the fact.

43. In addition to this mitigating factor paragraphs 38 to 42 of the Statement of Agreed Facts record the following mitigating facts:

38. The Prosecutor is not aware of Tyco being convicted by this Court for an offence against the environment protection legislation.

39. An early plea of guilty was entered by Tyco in these proceedings on 16 December 2004.

40. Tyco co-operated with EPA investigations into the offence, including Tyco employees attending interviews with EPA officers.

41. On becoming aware of the incident, Tyco immediately ceased operations and took remedial action.

42. For a week following the incident, Tyco and Sydney Water monitored water quality and undertook clean-up operations at Prospect Creek, including pumping and flushing parts of the Creek.

44. Some of these mitigating facts are amplified by the affidavit evidence of Mr Mike Keegan, the General Manager of Tyco (Exhibit B). For example, amplification of the remedial action Tyco undertook upon learning of the existence of the sewerage discharge into Prospect Creek included the removal from the Smithfield carrier of the partially installed liner resulting in a loss of $188,827 on account of the fact that the removed liner could not be reused and an expenditure of $88,000 in the clean up costs. As a result of the pollution incident Tyco suffered an overall loss of $591,000 on the contract with Sydney Water.

45. Additional facts in mitigation established by Mr Keegan’s testimony include the following matters:

(i) the excellent and hitherto unblemished environmental record of Tyco during the past 40 years in the manufacture and installation of pipeline systems (including the carrying out of sewer rehabilitation works for the past 12 years without any pollution incidents);

(ii) the environmental conscientiousness of Tyco in its manner of conducting its business of manufacture and installation of pipeline systems;

(iii) the changes in operational practices when carrying out sewer rehabilitation works including employing the technique of double isolation of sewers and constant monitoring of the major isolation plugs thereby avoiding the prospect of a repeat of a similar pollution incident to that which occurred in the present case; and

(iv) the expression of genuine contrition on behalf of Tyco for the admitted offence.

C. THE COMPETING CASES ON SENTENCE

46. Based upon the foregoing recital of relevant facts pertaining to the admitted offence (including all of the identified mitigating factors) the competing submissions on sentence were vastly divergent.

47. The Prosecutor submitted that a significant penalty was called for having regard to (i) the stated objects of the PEO Act, (ii) the need for a penalty to create general deterrence, (iii) the objective effects of the admitted offence (the discharge into Prospect Creek of a very large quantity of untreated human sewage creating actual (albeit transitory) environmental harm and posing a risk for human health) and (iv) the subjective elements of the Defendant’s culpability - subject to the appropriate discount in penalty to reflect the mitigating factors in favour of the Defendant. With a view to achieving evenhandedness in sentencing the Prosecutor referred to a number of earlier decisions of this Court imposing penalties for water pollution offences under the Clean Waters Act 1970 involving the discharge into waters of sewerage effluent where the penalties imposed were $15,000 (2 cases) and $40,000 (1 case) against the then prescribed maximum penalty of $125,000.

48. The Prosecutor referred to the factors enumerated in s241 of the PEO Act submitting that upon the basis of the agreed facts concerning the admitted offence the Court would reasonably conclude that each of the relevant factors specified in paragraphs (a), (b), (c) and (d) of s241(1) would be evaluated in a manner that was adverse to the Defendant.

49. The competing Defence submission laid emphasis upon Tyco’s lack of knowledge of the existence of the sewer overflow pipe from which the effluent discharge had occurred in the present case.

50. It was submitted on behalf of Tyco that it had honestly believed that the by-pass system that it had designed and installed would function efficiently to direct sewer flows without causing a pollution incident. However because Tyco had not been aware of the relevant overflow pipe that feature of the sewer system had not been taken into account in the design of the by-pass system, which on that account, was unwittingly a flawed system.

51. Moreover because of Tyco’s ignorance of the existence of the overflow pipe it was submitted that the risk of a discharge via that overflow pipe was not foreseeable by Tyco. Indeed it was submitted that but for the existence of the overflow pipe (which was unknown to Tyco) the pollution incident would not have occurred.

52. Upon the basis of the foregoing submission Senior Counsel for Tyco submitted that in all the circumstances of this admitted offence and having regard to the agreed mitigating factors the Court would exercise in favour of the Defendant the discretion conferred by s10(1) of the Crimes (Sentencing Procedure) Act 1999 by not recording a conviction and by not imposing a penalty.

53. The Prosecutor strenuously opposed the Defendant’s application for discharge pursuant to s10 of the Crimes (Sentencing Procedure) Act.

54. It is common ground that the offence created by s120(1) of the PEO Act is an offence of strict liability and that that liability is susceptible to exculpation on the basis of honest and reasonable mistake of fact: He Kaw Teh v The Queen (1985) 157 CLR 523.

55. However the nature of the mistaken belief sufficient to raise the “defence” to a charge of the subject offence is something more than inadvertence or a mere absence of knowledge. This is demonstrated by the following passage of the judgment of Gleeson CJ in the NSW Court of Criminal Appeal in State Rail Authority v Hunter Water Board (1992) 28 NSWLR 721 at 726/726 (a case involving the offence of water pollution created by s16(1) of the Clean Waters Act 1970):

The origin of the "defence" is said to be found in the statement of Cave J in R v Tolson (1989) 23 QBD 168. His Lordship said (at 181):

"At common law an honest and reasonable belief in the existence of circumstances, which, if true, would make the act for which a prisoner is indicted an innocent act has always been held to be a good defence. This doctrine is embodied in the somewhat uncouth maxim 'actus non facit reum, nisi mens sit rea'. Honest and reasonable mistake stands in fact on the same footing as absence of the reasoning faculty, as in infancy, or perversion of that faculty, as in lunacy."

The concluding words in that passage emphasise that what is involved is something more than inadvertence. In a number of different contexts courts have stressed the need to show an affirmative belief in a certain fact or state of affairs, as distinct from a mere absence of knowledge: eg, Bergin v Stack (1953) 88 CLR 248 at 261-262 per Fullagar J; Gherashe v Boase [1959] VR 1; G J Coles & Co Ltd v Goldsworthy [1985] WAR 183.

In determining what state of mind will be treated as a mistaken belief for the purposes of an offence of strict liability created by statute, questions of statutory construction arise, and the purpose of the legislature in creating an offence needs to be considered: He Kaw Teh v The Queen (at 576-578) per Brennan J.

It would be inconsistent with the legislative purpose underlying the Clean Waters Act to conclude that the mere lack of knowledge that pollution was occurring, or was likely to occur, based upon a general understanding or assumption that everything was in order, would be sufficient to amount to a mistaken belief. Rather, a belief in the existence of a set of facts which, if true, would take the conduct in question outside the operation of the statute would entail, in a case such as the present, a positive belief that the operation of the plant and equipment would not result in pollution. That belief would also need to be sufficiently specific to relate it to the elements of the particular offence. In the present case it could be a belief that the particular pipeline did not leak, or a belief that, if it did, oil that was leaked would not pollute waters. Such a belief might relevantly constitute a mistake, and it would then be necessary to examine the question whether that mistake was honest and reasonable.

It would be inconsistent with the legislative purpose of the Clean Waters Act to conclude that a defendant would be excused on the basis simply that he or she had no particular reason to apprehend that the operation of the plant and equipment in question would, or might, result in pollution. Indeed, bearing in mind where the onus of proof lies in relation to this issue, it is hardly likely that the legislature intended that the prosecution should have to prove the absence of a belief of that kind.

56. Significantly in the present case Tyco has not sought to raise the “ Significantly in the present case Tyco has not sought to raise the “defence” of honest and reasonable mistake of fact and thereby be exculpated of liability. Rather Tyco seeks to avoid the conviction and penalty which might otherwise reasonably be expected to flow from its admission of culpability upon the ground that it was not blameworthy in the circumstances causing the pollution incident because it did not know about the overflow pipe from which the effluent discharge occurred in the process of Tyco operating the sewer by-pass system that it had designed and installed to enable it to undertake the sewer relining contract works.

57. Although the strict liability imposed by s120(1) of the PEO Act in no way depends upon any requisite mental element or intent or negligence on the part of the offender the purpose for imposing strict liability is not to punish a luckless victim. This is a matter emphasised by the Chief Justice in his judgment in the Court of Criminal Appeal in Thorneloe v Filipowski (2001) 52 NSWLR 60 when considering the availability of s10 of the Crimes (Sentencing Procedure) Act to a strict liability offence created by the Marine Pollution Act 1987 . The relevant passage from the Chief Justice’s judgment which commences at 74 is as follows:

171 Even in the case of an offence of strict liability, no public purpose is served by recording a conviction or imposing a penalty in circumstances where the relevant accused could not, as a matter of practical reality, have done anything to ensure that the offence or, in the case of a result offence, the adverse consequences of the conduct, did not occur.

172 Lord Scarman expressed the purpose of imposing strict liability in Gammon (Hong Kong) Ltd v Attorney General of Hong Kong [1985] AC 1 at 14: "... the creation of strict liability will be effective to promote the objects of the statute by encouraging greater vigilance to prevent the commission of the prohibited act."

173 To similar effect are the observations of Lord Evershed in Lim Chin Aik v The Queen [1963] AC 161 at 174:

"It is pertinent also to inquire whether putting the defendant under strict liability will assist in the performance of the regulations. That means there must be something he can do, directly or indirectly, by supervision or inspection, by improvement of his business methods or by exhorting those whom he may be expected to influence or control, which will promote the observance of the regulations. Unless this is so, there is no reason in penalising him, and it cannot be inferred that the legislature imposed strict liability merely in order to find a luckless victim."

174 In He Kaw Teh v The Queen (1984-1985) 157 CLR 523, immediately prior to quoting this passage from Lim Chin Aik, Brennan J said:

"It requires clear language before it can be said that a statute provides for a person to do or to abstain from doing something at his peril and to make him criminally liable if his conduct turns out to be prohibited because of circumstances that that person did not know or because of results that he could not foresee. However grave the mischief at which a statute is aimed may be, the presumption is that the statute does not impose criminal liability without mens rea unless the purpose of the statute is not merely to deter a person from engaging in prohibited conduct but to compel him to take preventive measures to avoid the possibility that, without deliberate conduct on his part, the external elements of the offence might occur. A statute is not so construed unless effective precautions can be taken to avoid the possibility of the occurrence of the external elements of the offence."

175 Brennan J, Lord Evershed and Lord Scarman were concerned with determining whether a particular offence required mens rea. However their Honours' reasoning suggests that in the case of any criminal offence the Parliament will be strongly presumed to be concerned to impose liability only in the case of events that could have been avoided by some action on the part of the accused.

176 As Lord Salmon said in the Federal Steam Navigation case, immediately after the passage quoted above, at 526:

"I can see nothing unfair in making the master guilty for any contravention of section 5. If the vessel is not fitted with the proper equipment and the master knows it, he should refuse to put to sea until the vessel is properly equipped. If he puts to sea when there has been some contravention of section 5 of which he could not have known, no court, were he to be prosecuted, would do more than impose a nominal fine, or give him an absolute discharge."

177 Although Lord Salmon understated the responsibility of the owner - which extends to establishing systems, guidelines and practices - nevertheless, there is a difference between the absentee character of ownership and the direct involvement in operations of the Master. Both share responsibilities. The object of ensuring greater vigilance in the context of strict liability is served by imposing as the Parliament has done, coordinate, and not merely derivative, obligations on both.

178 It is, in my opinion, relevant to the exercise of the discretion under s10 of the Sentencing Act, in the context of a strict liability offence, to consider what the applicant for the benefit of s10 could have done to avert the event that has occurred. While questions of weight are always for the sentencing judge, it is unlikely that this consideration will be given determinative weight in the case of a serious offence or a repeat offender. Where, as here, there was a comparatively minor pollution by a first offender, this consideration is entitled to weight.

58. It follows that Tyco is entitled to seek to invoke the favourable exercise of the discretion conferred by s10 of the Crimes (Sentencing Procedure) Act in the present case notwithstanding its deliberate decision not to raise the exculpatory “defence” of honest and reasonable mistake of fact.

59. However as I will presently illustrate (when considering the various factors specified in s10(3) of the Crimes (Sentencing Procedure) Act ) the Defence submission based upon absence of actual knowledge by Tyco of the existence of the relevant overflow pipe overstates the significance of this fact and inadequately addresses the agreed facts of the case concerning the causes of the pollution incident. In particular the fundamental deficiency in the Defence submission is that it tends to ignore the fact of the failure of the plug for which Tyco must be held to be entirely responsible. As will be demonstrated Tyco, on the facts of the present case, cannot reasonably be regarded as being unblameworthy in the circumstances causing the pollution incident. On the contrary Tyco must be held to be entirely responsible for the plug failure and to be chiefly responsible for the consequences of its decision to continue to operate the by-pass system despite that plug failure.

60. S10(3) of the Crimes (Sentencing Procedure) Act provides as follows:

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

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

(b) the trivial nature of the offence,

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

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

61. Factor (a) clearly operates in favour of the Defendant in as much as it enjoys a previously unblemished environmental record in the specialised industry in which it had been engaged for many years.

62. Factor (b) operates against the Defendant in as much as the offence of polluting waters is a self-evidently significant offence, carrying a significant prescribed maximum penalty and the particular facts relevant to the admitted offence (as detailed earlier in these reasons) demonstrate that it was a serious and significant example of the offence created by s120(1) of the PEO Act.

63. Factor (c) (combined with the related Defence submission that the pollution incident was unforeseeable) is founded upon the absence of actual knowledge by Tyco of the existence of the relevant overflow pipe. It may be accepted that Tyco’s relevant ignorance has some extenuating effect upon the level and extent of its blameworthiness in the causes of the pollution incident. However that extenuating effect does not apply to its blameworthiness for the failure of the plug and for its decision to continue to operate the by-pass system after the plug had failed and when that failure had not been remedied. It is no answer for Tyco to seek to rely upon its successful trialling of the by-pass system because that trial involved the effective functioning of all features of the by-pass system whereas a cause of the pollution incident was the failure of the plug. Whilever the failed plug was functioning effectively the sewer effluent would not have traversed the section of the Kenyon carrier containing the relevant overflow pipe because it would have been arrested by the plug. It was only when that plug failed that the sewer effluent upstream in the Kenyon carrier gravitated to the plug installed in the Smithfield carrier most proximately to the section of that carrier where Tyco was installing the sewer liner. It was from that plug point when the pumping activity was attempting to redirect that flow upstream in the Kenyon carrier to the by-pass to the Dursley Road carrier, that there occurred the discharge from the relevant overflow pipe situate between the failed plug in the Kenyon carrier and the effective plug in the Smithfield carrier.

61. Accordingly the “cause” of the pollution incident can be truly traced back to the failed plug as is reflected in paragraphs 32 and 33 of the Statement of Agreed Facts earlier recited.

62. To the extent that the “cause” included the existence of the relevant overflow pipe (as reflected in par 33 of the Statement of Agreed Facts) my finding that Tyco, though not actually aware of its existence, had “constructive To the extent that the “cause” included the existence of the relevant overflow pipe (as reflected in par 33 of the Statement of Agreed Facts) my finding that Tyco, though not actually aware of its existence, had “constructive” knowledge of its existence, significantly reduces the extenuating effect of Tyco’s lack of actual knowledge.

63. When full regard is had to all relevant facts concerning the “cause” of the pollution incident I am satisfied that the level or extent of extenuating circumstances is not significant and is appreciably outweighed by the non-extenuating circumstances.

64. Factor (d) includes the full range of mitigating factors that I have earlier summarised which operate in favour of Tyco.

65. Balancing all of my findings in respect of the several factors enumerated in s10(3) of the Crimes (Sentencing Procedure) Act I am ultimately of the opinion that discharge of the Defendant pursuant to s10(1) is not justified. In so concluding I find that the Defendant was not unblameworthy for the pollution incident and that in answer to the practical question posed by the Chief Justice in Thorneloe there was much that the Defendant could have done to have averted the pollution incident.

66. Most obviously it could have stopped the by-pass operation once it knew the plug had failed because that plug was an essential element of the by-pass system. To continue the by-pass operation with that essential element not functioning involved a risk that that by-pass system would not operate effectively. In voluntarily assuming that risk the Defendant was not actually aware of the existence of the overflow pipe in the vicinity of the failed plug but it was in possession of information that gave it constructive knowledge of the existence of the overflow pipe.

67. For all the foregoing reasons I am satisfied that discharge pursuant to s10(1) of the Crimes (Sentencing Procedure) Act is not justified.

68. It follows that I am satisfied that the present case justifies the recording of a conviction and the imposition of a penalty.

69. The appropriate penalty is one that recognises the objective gravity of the offence (including the Defendant’s culpability in the commission of the offence) but which reflects significant discount recognising the ov The appropriate penalty is one that recognises the objective gravity of the offence (including the Defendant’s culpability in the commission of the offence) but which reflects significant discount recognising the overall effect of relevant mitigating factors.

70. In determining the appropriate penalty I am of the opinion that the facts of the present case justify an evaluation of the relevant factors specified in s241(1) of the PEO Act which is generally adverse to the Defendant.

71. Senior Defence Counsel submitted as I have earlier noted that the discharge of the effluent via the overflow pipe that was unknown to Tyco was not reasonably foreseeable by the Defendant (vide s241(1) par (c)). However this submission ignores the fact that a cause of the pollution incident (if not “the cause” or the principal cause) was the failure of the plug and the decision of Tyco to continue to operate the by-pass system despite that plug failure. Even if par (c) is interpreted so as to call up the precise manner in which the pollution incident occurred (and query whether this is its true effect cf Empress Car Co (Abertillery) Ltd v National Rivers Authority (1998) 1 All ER 481 at 492 per Lord Hoffman) the constructive knowledge of the existence of the relevant overflow pipe that I have held Tyco to have had, would operate to render “reasonably foreseeable” the discharge via that overflow pipe in the course of operating the by-pass system notwithstanding the plug failure.

72. But for the existence of all the mitigating factors that I have earlier mentioned together with the residual extenuating circumstances created by Tyco’s lack of actual knowledge of the existence of the overflow pipe (which taken globally justifies a penalty discount of some 50%) I would have regarded the gravity of the admitted offence as moderately (mid-range) serious within the overall spectrum of gravity of the offence created by s120(1) of the PEO Act. To this end a penalty of $100,000 reflecting 40% of the prescribed maximum would be justified. When this penalty is discounted by 50% it yields a penalty of $50,000 which in my opinion is the appropriate penalty to be imposed and is one that generally accords with the range of penalties imposed for convictions of water pollution offences involving significant volumes of untreated sewerage entering “waters”.

D. CONCLUSIONS AND ORDERS

76. For all the foregoing reasons I make the following orders:

1. The Defendant is convicted of the offence as charged.

2. A penalty of $50,000 is imposed in respect of that conviction.

3. The Defendant is to pay the Prosecutor’s reasonable costs in the sum determined in accordance with s253(2) of the Criminal Procedure Act 1986.

4. Exhibits to remain on the Court file.

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Amendments

17 June 2015 - complete judgment published

Decision last updated: 17 June 2015