Environment Protection Authority v Unomedical Pty Limited (No 3) - [2010] NSWLEC 198

Land and Environment Court

of New South Wales

CITATION: Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198

PARTIES:
PROSECUTOR
Environment Protection Authority
DEFENDANT
Unomedical Pty Limited

FILE NUMBER(S): 50046 of 2008

CORAM: Pepper J

KEY ISSUES:
ENVIRONMENTAL OFFENCES :- whether the defendant failed to implement such practicable means as may have been necessary to reduce air pollution resulting from the operation of a medical sterilisation facility - as a result of the sterilisation process ethylene oxide, a carcinogen, was emitted into the atmosphere - no defined statutory standards or limits were imposed on the defendant's discharge of ethylene oxide - the defendant was aware that an abatement system could have been installed that would have significantly reduced the amount of ethylene oxide emitted but considered it unneccesary to install it - whether the installation of an abatement system was necessary when no actual harm proven - use of overseas learning and literature to establish defendant's state of knowledge of available practicable means - defendant found guilty
STATUTORY CONSTRUCTION :- meaning of "such practicable means as may be necessary" - meaning of "air pollution"
DEFENCES :- whether defence of honest and reasonable mistake of fact established by defendant - held it was not - whether defence of officially induced error of law available at common law in Australia - held it was not - whether, if it was, it had been established on the facts - held it had not

LEGISLATION CITED: Environmental Planning and Assessment Act 1979 s 79C(1)
Evidence Act 1995 s 136
Interpretation Act 1987 ss 9, 33, 45
Protection of the Environment Operations Act 1997 ss 96, 128, 172
Protection of the Environment Operations (Clean Air) Regulation 2002 cl 6C(1) and (2)(c)

CASES CITED: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618
Australian Fisheries Management Authority v Su [2009] FCAFC 56; (2009) 176 FCR 95
Australian Iron & Steel Pty Ltd v Environment Protection Authority [No 2] (1992) 79 LGERA 158
Azzopardi v The Queen [2001] HCA 25; (2001) 205 CLR 50
Ballantyne v WorkCover Authority of New South Wales [2007] NSWCA 239
Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301
Beckwith v R (1976) 135 CLR 569
Bodney v Bennell [2008] FCAFC 63; (2008) 167 FCR 84
Casa v City of Ryde Council [2009] NSWLEC 212; (2009) 172 LGERA 348
Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 83; (2009) 255 ALR 131
Chief Commissioner of State Revenue v Qantas Airways Ltd [2009] NSWCA 163; (2009) 74 NSWLR 181
Chugg v Pacific Dunlop Ltd [1990] HCA 41; (1990) 170 CLR 249
CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384
CMT v R [2008] HCA 25; (2008) 236 CLR 440
Dyers v The Queen [2002] HCA 45; (2002) 210 CLR 285
Electricity Commission of NSW v Environment Protection Authority (1992) 28 NSWLR 494
Environment Protection Authority v Brazel [2002] NSWLEC 7; (2002) 119 LGERA 72
Environment Protection Authority v Fletcher [2001] NSWLEC 104; (2001) 114 LGERA 187
Environment Protection Authority v Goulburn Wool Scour Pty Limited [2003] NSWLEC 200
Environment Protection Authority v Milpharma [1994] NSWLEC 189
Environmental Earth Sciences Pty Ltd v Environment Protection Authority [1999] NSWCCA 192; (1999) 103 LGERA 434
GPT RE Ltd v Belmorgan Property Development Pty Ltd [2008] NSWCA 256; (2008) 72 NSWLR 647
Hawkesbury City Council v Johnson; Hawkesbury City Council v Johnson Property Group Pty Limited [2008] NSWLEC 138
He Kaw Teh v R [1985] HCA 43; (1985) 157 CLR 523
Iannella v French (1968) 119 CLR 84
Lane Cove Council v Minister for Urban Affairs and Planning [2005] NSWCA 122; (2005) 140 LGERA 185
Lévis (City) v Tétreault; Lévis (City) v 2629-4470 Québec Inc [2006] 1 SCR 420
Louizos v R [2009] NSWCCA 71; (2009) 194 A Crim R 223
MacRae v Buller District Council [2005] NZHC 378
Mahmood v Western Australia [2008] HCA 1; (2008) 232 CLR 397
Maitland Valley Conservation Authority v Cranbrook Swine Inc (2002) 225 DLR (4th) 455
Martindale v Falkner (1846) 2 CB 706; 135 ER 1124
Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154
Morris v Kanssen [1946] AC 459
McLean Bros and Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835
Morrison v ANL Ltd (1996) 91 LGERA 437
Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273
Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146
Ostrowski v Palmer [2004] HCA 30; (2004) 218 CLR 493
Pace Farm Egg Products Pty Ltd v Newcastle City Council [2006] NSWCCA 403; (2006) 151 LGERA 260
Page v Manningham City Council [2010] VSC 267; (2010) 174 LGERA 48
Paice v Hill [2009] NSWCA 156
Palos Verdes Estates Pty Ltd v Carbon (1991) 72 LGRA 414
Pelechowski v Registrar [1999] HCA 19; (1999) 198 CLR 435
PQ v Australian Red Cross Society [1992] 1 VR 19
Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355
Proudman v Dayman (1941) 67 CLR 536
R v City of Sault Ste Marie (1978) 85 DLR (3d) 161
R v Dodsworth (1837) 8 Car and P 218; 173 ER 467
R v Fazio (1997) 69 SASR 54
R v Jorgensen [1995] 4 SCR 55
R v Jung [2006] NSWSC 658
R v Karger [2001] SASC 64; (2001) 83 SASR 1
R v Lavender [2005] HCA 37; (2005) 222 CLR 67
SAEED v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 115 ALD 493
Samad v District Court of New South Wales [2002] HCA 24; (2002) 209 CLR 140
Selby v Pennings (1998) 102 LGERA 253
State Pollution Control Commission v Australian Iron & Steel Ltd (1992) 74 LGERA 387
State Rail Authority of New South Wales v Hunter Water Board (1992) 28 NSWLR 721
Street v Luna Park Sydney Pty Ltd [2007] NSWSC 1529
Tesco Supermarkets Ltd v Nattrass [1972] AC 153
Thomas v The King (1937) 59 CLR 279
Tipple v Police [1994] 2 NZLR 362
Valsane Pty Ltd v Environment Protection Authority [1996] NSWLEC 265
Von Lieven v Stewart (1990) 21 NSWLR 52
Wallaby Grip Limited v QBE Insurance (Australia) Limited; Irene Stewart (As Legal Personal Representative of the Estate of the Late Angus Clugston Stewart) v QBE Insurance (Australia) Limited [2010] HCA 9; (2010) 240 CLR 444
Waugh v Kippen [1986] HCA 12; (1986) 160 CLR 156
Williams v The Queen (1978) 140 CLR 591
Wilson v Auckland City Council [2007] NZHC 287
Woods v The Director of Public Prosecutions [2008] WASCA 188; (2008) 38 WAR 217
Workcover Authority of NSW (Inspector Simpson) v CNH Australia Pty Ltd (formerly Case Corporation Pty Ltd) [2006] NSWIRComm 220

TEXTS CITED: J D Heydon, Cross on Evidence, Vol 1, (1996) Butterworths
I Freckelton SC and H Selby, Expert Evidence Law, Practice, Procedure and Advocacy (4th ed), (2009) Lawbook Co

DATES OF HEARING: 29-30 June, 6-10 and 15-16 July 2009

DATE OF JUDGMENT:
12 October 2010

LEGAL REPRESENTATIVES:
PROSECUTOR
Mr B Docking
SOLICITORS
Department of Environment and Climate Change
DEFENDANT
Mr I Lloyd QC
SOLICITORS
Henry Davis York

JUDGMENT:

THE LAND AND
ENVIRONMENT COURT
OF NEW SOUTH WALES

PEPPER J

12 October 2010

50046 of 2008 Environment Protection Authority v Unomedical Pty Ltd (No 3)

JUDGMENT

Contents

Subject Paragraph No

Introduction 1

Uncontroversial Background Facts 4

Legislative Framework Giving Rise to the Charge 21

Overview of the Proceedings: Elements of the Offence and Defences 24

EPA’s Evidence 27

Ms Janice Davis/Taylor 27

Mr James Goodwin 32

Ms Amiette Wakenshaw 36

Professor Bernard Stewart 38

Mr Nicholas Ives 50

Mr Andrew Doig 60

Ms Angela Daly 67

Mr Peter Ellis 76

Mr John Court 80

Use of Overseas Literature and Learning 80

Use of the Approved Methods Documents 93

Unomedical’s Evidence 107

Mr Anders Kolding 107

Reliability of Mr Kolding as a Witness 168

Elements of the Offence 173

The Proper Interpretation of s 128(2) of the POEOA 173

Current Approach to Statutory Construction 177

The Emission of EtO Constituted “Air Pollution” as Defined 179

“Such Practicable Means as May Be Necessary” 204

“Such Practicable Means” 205

“As May Be Necessary” 210

“To Prevent or Minimise” 221

Summary 223

Unomedical Did Not Carry on Its Sterilisation Operations By Such Practicable Means As

Were Necessary to Minimise the Emission of EtO Into the Air 224

Nature of the Risk of the EtO Emissions and Unomedical’s Knowledge of the Risk 224

Summary 237

The Amount of EtO Emitted 238

Such Practicable Means Existed at the Time to Minimise the Air Pollution and Were

Necessary 242

Unomedical’s Knowledge of “Such Practicable Means” 249

Summary 252

Defences 254

Honest and Reasonable Mistake of Fact 254

Principles and Elements of the Defence 255

Any Mistake Made by Unomedical Was Neither One of Fact Nor Was it Reasonable 263

Summary 281

Officially Induced Error of Law 282

Acceptance of the Defence Overseas 296

Acceptance of the Defence In Australia 298

Summary 309

Onus of Proof 311

Unomedical Cannot Avail Itself of the Defence on the Evidence 313

Summary 335

Conclusion and Orders 337

Introduction

1 HER HONOUR: By way of summons filed on 14 July 2008, the prosecutor (“the EPA”) charged the defendant, Unomedical Pty Ltd (“Unomedical”), with the following offence:

Protection of the Environment Operations Act

2 The following particulars were given:

Activity

Sterilising medical instruments.

Air Pollution

The emission of an air impurity, namely ethylene oxide.

Manner of Contravention

The defendant carried on the activity without such practicable means necessary to prevent or minimise air pollution, such as:

(1) absorption and/or hydrolysis; or

3 Unomedical pleads not guilty to the charge, however, for the reasons given below I find Unomedical guilty of the offence as charged.

Uncontroversial Background Facts

4 The background facts in this matter were largely uncontroversial and were contained, in the main, in a statement of agreed facts. They are as follows.

5 Unomedical is a company specialising in the manufacturing of single use medical instruments and equipment. This includes the operation of a sterilising facility used in the manufacture of instruments and equipment.

6 Unomedical currently occupies the premises of 11-17 Wilmette Place, Mona Vale, New South Wales (“the facility”). They have done so since about 1 January 2002. Prior to occupying the Wilmette Place facility, from approximately 1985, Unomedical (and its predecessor companies) operated a sterilising plant nearby at Bassett Street, Mona Vale.

7 In the late 1990s Unomedical decided to consolidate its operations and move to the Wilmette Place facility. As part of this process Unomedical applied for (DA 0919/00 or “the first DA”), and obtained, development consent from Pittwater Council (“the council”), the consent authority and the regulatory authority under the Protection of the Environment Operations Act 1997 (“the POEOA”).

8 Ethylene oxide (“EtO”) is the principal chemical used in the sterilisation process.

9 During the charge period there was no standard or rate prescribed for the emission of EtO under New South Wales legislation and the facility was not classified as a scheduled premises under the POEOA.

10 On 10 November 2006, the council’s environmental health officer, Mr Nick Ives, received a telephone call advising that EtO was being used at the facility. As a consequence, Mr Ives undertook an inspection of the facility on 17 November 2006. During the site inspection Mr Ives asked Mr Anders Kolding, then the managing director of Unomedical, to prepare a report on its EtO emissions. Mr Kolding engaged the company HLA Enviro Sciences Pty Limited (“HLA”) to prepare the report.

11 In or about May or June 2007, the HLA report was submitted to the council. The council forwarded the report to the New South Wales Department of Health and the New South Wales EPA for advice. The Department of Health formed a ‘health expert panel’ to advise it on the health impacts of the Unomedical EtO emissions. The health expert panel comprised of:

(a) Professor Bruce Armstrong;

(b) Ms Kerry Holmes

(c) Professor Brian Priestley; and

12 These persons were chosen by the Department of Health as having expertise on the impact of carcinogenic materials, and in particular the impact of EtO, on environmental, occupational and population health.

13 On 26 July 2007, the council issued Unomedical with a prevention notice under s 96 of the POEOA (“the First Prevention Notice”). Unomedical ceased operations at the facility in response to the First Prevention Notice.

14 In July and August 2007, Unomedical installed a catalytic abatement system in the steriliser. The catalytic abatement system converted the residual EtO from the sterilisation process to carbon dioxide in water vapour or steam. It reduced the amount of EtO vented to the atmosphere at the end of each sterilisation cycle by approximately 99.9%. The purchase, freight and installation of the catalytic abatement system cost Unomedical approximately $840,000. The catalytic abatement system was sourced from a sterilisation plant operated by Unomedical in Denmark.

15 On 16 August 2007, the council issued Unomedical with a second prevention notice under s 96 of the POEOA (“the Second Prevention Notice”).

16 Prior to the council serving Unomedical with the First and Second Prevention Notices there was extensive consultation between the then Department of Environment and Climate Change (“DECC”), the council and the New South Wales Department of Health in relation to the emission of EtO. The consultation process continued after the Second Prevention Notice was served. During this process all agencies sought information, which Unomedical provided voluntarily, including expert information, which it provided at its own cost.

17 In or about September 2007, following the installation of the catalytic abatement system, Unomedical resumed operation in the facility in compliance with the Second Prevention Notice.

18 Unomedical has fully complied with the First and Second Prevention Notices. By way of letter dated 3 October 2008, the council informed Unomedical that it would not take any further action.

19 On 28 April 2008, the Protection of the Environment Operations Amendment (Scheduled Activities and Waste) Regulation came into effect (“the Regulation”). This Regulation amended Schedule 1 of the POEOA so that the use of more than one tonne of EtO per year in the sterilisation of products or equipment was a scheduled activity. Since the amendment to Schedule 1 of the POEOA, Unomedical has held, and continues to hold, an environmental protection licence for the facility in accordance with s 48 of that Act.

20 In relation to the health and environmental impact of the exposure to EtO from Unomedical’s facility in Mona Vale, the health expert panel produced a consensus statement entitled “Past Community Exposures to Ethylene Oxide From Facilities in Mona Vale”. The consensus was exhibited to Professor Stewart’s affidavit. Professor Stewart concurred with the health expert panel’s conclusion that:

On balance, although there may have been a low level of cancer risk present, it is unlikely that the historical exposure to ethylene oxide from the operations of the Bassett Street and the Wilmette Place facilities have resulted in as much as one additional case of cancer among local residents.

Legislative Framework Giving Rise to the Charge

21 Although the charge is framed in terms of the entirety of s 128 of the POEOA, there was no dispute that it is alleged that Unomedical breached s 128(2) only of that Act. This provision states (emphasis added):

by such practicable means as may be necessary

22 The offence created by s 128(2) of the POEOA is one of strict liability.

23 This is the first case that deals with an alleged breach of s 128(2) of the POEOA. Its predecessor is located in s 15(2) of the Clean Air Act 1961 for scheduled premises and s 19(2) of that Act for non-scheduled premises.

Overview of the Proceedings: Elements of the Offence and Defences

24 The EPA and Unomedical agreed that the elements of the offence created by s 128(2) are as follows:

(a) that no standard or rate has been prescribed for the emission of an air impurity;

(b) that Unomedical was the occupier of the premises;

(c) that Unomedical carried on an activity, or operated a plant; and

25 Elements (a)-(c) were admitted by Unomedical. Accordingly, I find they have been proved beyond reasonable doubt. The proceedings therefore concerned only whether sufficient proof of the last element could be demonstrated by the EPA.

26 In addition to submitting that the EPA had not proven to the requisite standard the last element of the offence, Unomedical also relied on two defences:

(a) first, honest and reasonable mistake of fact. That is to say, that Unomedical, through its Managing Director, Mr Anders Kolding, held an honest and reasonable but mistaken belief of fact that it was taking all necessary measures to minimise air pollution in the operation of the facility. This is because at the time Unomedical commenced its operations at the facility, Mr Kolding held the positive but mistaken belief that the EtO which was being discharged was minimal and would not harm human health or the environment, and moreover, that no regulatory controls having been imposed on the discharge of the EtO from the facility, Unomedical was at all times complying with the law in relation to its use and emission of EtO; and

EPA’s Evidence

Ms Janice Davis/Taylor

27 Ms Davis was employed as an Investigator, Special Investigations Unit, at DECC. Ms Davis was the investigator, who together with Mr James Goodwin, investigated the alleged breach of s 128(2) of the POEOA. She gathered documentary information and interviewed various employees of Unomedical. In particular, she gathered information on the installation of the catalytic abatement system.

28 Ms Davis conducted an interview with Mr Kolding on 30 April 2008. Ms Davis stated that at the end of the interview with Mr Kolding he was given an opportunity to state anything further he wished to say about the matter or to make a written statement and he declined to do so. Ms Davis also stated that throughout the entire interview Ms Elizabeth Wild was present as Mr Kolding’s legal representative.

29 During the course of this interview Mr Kolding relevantly stated that:

(a) between 2002 to July 2007, Unomedical did not undertake any independent testing to measure the emission rates of EtO;

(b) he reported to Mr Henrik Brandt who was the CEO of Unomedical Denmark, Unomedical Australia and Unomedical “everywhere”;

(c) in Australia there was an overall policy that Unomedical was to minimise any environmental impact and “always to be within legislation”;

(d) he did not know what the requirements were for EtO emissions in New South Wales, but Unomedical had asked for advice from Mr Andrew Doig from the Australian Environmental Business Network (“AEBN”) who advised Unomedical that because it was not a licensed company there were no applicable emissions guidelines;

(e) Unomedical got advice from the EPA in 2000 that because it was not a licensed company the amount of EtO utilised was sufficiently small that Unomedical was “of no interest to the EPA” and that it should consult with its local council. Since 2001 and up to 2007 this was the course that Unomedical pursued;

(f) because there was no legislation saying that the EtO emitted from the sterilisation process was required to be tested, no testing was conducted prior to 2007. Mr Kolding stated that “we actually didn’t even know how to test it” and that even in 2006 when the council asked HLA to test the emissions, it had been difficult to find a company who could carry out the tests;

(g) prior to July 2007 the preventative measures taken by Unomedical to minimise or prevent the release of EtO into the atmosphere were that it was diluted with nitrogen prior to its release. This resulted in, Mr Kolding believed, only 50% of the EtO utilised in each sterilisation cycle being released into the atmosphere;

(h) the abatement system installed in or about 2007 was sourced from one of Unomedical’s factories in Denmark. It had initially been installed in premises in Denmark in 1996 and was later recommissioned and rebuilt in 2003. It had been installed in Denmark to meet the requirements of the Danish legislation with respect to the emission of EtO into the atmosphere. These requirements applied due to the significantly larger size (ten times bigger than the facility at Wilmette Place) of the Danish factory;

(j) the EtO emissions were not referred to in the Environmental and Earth Sciences Proprietary Limited (“EES”) audit report commissioned by Unomedical because they were not considered to be an issue when the report was being prepared;

(k) he had never seen the POEOA before;

(l) the EPA had provided Unomedical with advice in 2001 and 2006 about permissible EtO emissions from the facility, although he could not recall who at the EPA had provided this advice. In relation to the 2001 provision of advice, Mr Kolding stated that he had received the advice via his Operation Manager, Mr Nerinda Kanda; and

30 Ms Davis stated that during her site inspection of the facility on 16 May 2008, she saw sensors in place in various positions throughout the facility monitoring the release of EtO inside the facility. She saw a number of warning signs placed throughout the premises in respect of EtO. At all times Mr Kolding was cooperative with her during the site visit and that he willingly showed her around the facility and gave her any assistance required.

31 Ms Davis stated that her enquiries of EPA staff revealed that there were no records held by the EPA of any contact by Mr Kolding or Mr Kanda to the EPA in or around 2001.

Mr James Goodwin

32 Mr James Goodwin was the Unit Head, Sydney Industry Section, at DECC. Mr Goodwin, along with Ms Davis, attended a meeting with representatives of the New South Wales Department of Health. During this meeting, the New South Wales Department of Health advised that it had compiled a preliminary report concerning its investigation into community exposure to untreated EtO from Unomedical’s facility at Wilmette Place.

33 Mr Goodwin obtained the following information from the council, namely, that:

(a) DA 919/00 was lodged by Maersk Medical Pty Ltd (“Maersk”) for a change of use to a medical manufacturing and warehouse facility at Wilmette Place from Bassett Street, to council on 19 September 2000. The description of the proposal was for a:

The application form stated that, “Council’s staff will assess your proposal and contact you should any additional information be required”. The Statement of Environmental Effects contained a description of the “Proposed Development” which read:

sterilisation of the manufactured medical products is carried out using ethylene oxide by fully automated process control two cycles run each day. The process is validated and conforms to EN550/ISO11135 with auditing by the Department of Health for licencing and BVQI for CE marking on a yearly basis.

Ethylene oxide is classified under the Dangerous Goods Act, & Maersk is licensed under the Act to carry 500 kg with Lic No 35/007026.

No noise is involved and no odours generated or released.

(b) on 13 March 2001, the council granted development consent in respect of the first DA. The Statement of Environmental Effects was attached to the consent;

(c) on 13 August 2001, Maersk applied to modify the consent;

(d) the council approved the modification application on 5 October 2001. An identical Statement of Environmental Effects was attached to the approval, together with documents disclosing the location of the EtO gas tanks enclosure.

(e) on 20 October 2004, a second development application was lodged by BOS Constructions Pty Ltd (“BOS”) for a gas bottle enclosure extension at the facility (“DA 776/04” or “the second DA”). A new Statement of Environmental Effects attached to the consent made it clear that the application was for an extension of an existing ethylene oxide gas bottle enclosure at the facility. An email from Mr Mark Blake at BOS to the council on 9 February 2005 attached various documents in support of the application. These included a chemical fact sheet stating that most of the ethylene oxide used in sterilisation entered the environment, but once in the atmosphere it would take approximately one week to degrade or to return to earth in rain. The development control plan ( My Development Control Plan – 11 Wilmette Place, Mona Vale ) attached to the application (at C3.7), however, that the development did not adversely impact upon “health, the environment or other lands”. It stated that the development must be designed, constructed, maintained and operated in a proper and efficient manner so as to prevent air pollution. It also stated that the development and business operation “must comply with the” POEOA. At the foot of that section of the plan the word “ok” had been written. It is not known by whom; and

34 Mr Goodwin stated under cross examination that local councils had the primary responsibility as the regulatory authority under the POEOA of enforcing the provisions of that Act in relation to non-scheduled industries such as Unomedical’s facility, which included conducting environmental audits of these premises. He agreed that if any local council had any particular concerns in relation to any industries falling within its regulatory jurisdiction it could seek advice from the EPA.

35 Mr Goodwin confirmed that prior to Unomedical becoming a scheduled premises there were no legislative enforceable air emission limits for EtO that applied to it.

Ms Amiette Wakenshaw

36 Ms Wakenshaw was a specialist investigator with DECC. Ms Wakenshaw assisted in the investigation into the reports of air pollution from the facility together with Ms Janice Davis and Mr James Goodwin.

37 In particular, Ms Wakenshaw received information and records from Unomedical pursuant to a notice served on it under s 212A of the POEOA. Amongst the material provided by Unomedical in response to the notice was the following:

(a) a document entitled 2007 OHS Hazard Register – Steriliser Plant Post Installation of Air Purification System published by Unomedical (“the 2007 Register”). The 2007 Register noted that EtO was classified as a hazardous and dangerous good 2.3. It stated that the legislative requirements, recommendations and guidelines for risk assessment and control of EtO were set out in the documents, 1992 National Code of Practice for the Safe Use of EtO in Sterilisation/Fumigation Process NOHCS:2008(1992) (“the National Code”) and the Guidance Note for the Safe Use of EtO in Sterilisation/Fumigation Process NOHSC:3016(1992). These documents stated that EtO was a category 1 carcinogen according to the International Agency for the Research of Cancer. This meant that EtO was a human carcinogen and human exposure might result in the development of cancer;

(b) a BOC material safety data sheet dated 7 June 2005 for “Fumigas 1000 Fumigant” (“the MSDS”), the trade name of the EtO sterilant used by Unomedical, which stated that the gas used in the sterilisation process comprising 99.7% EtO, may irritate eyes, respiratory system and skin, may cause cancer and may cause heriditary genetic damage. The health hazard summary for the gas stated that it was “moderately to highly toxic”. The summary went on to state that the symptoms were usually delayed. It stated that EtO was classified as carcinogenic to humans and that special approval for use was required by the Health Department under the poisons legislation. In terms of the ecological information available it stated that “limited ecotoxicity data was available for this product at the time this report was prepared. Ensure appropriate measures are taken to prevent this product from entering the environment”; and

Professor Bernard Stewart

38 In his affidavit sworn 11 September 2008, Professor Stewart stated that he was a medical scientist employed by South Eastern Sydney and Illawarra Area Health Service.

39 In July 2007 he was invited by the Director of the Environmental Health Branch of the New South Wales Health Department to sit on the health expert panel established to assess the effects of the discharge of EtO from the facility. In particular, the purpose of the expert panel was to assess the impacts on human health of EtO emissions.

40 On 5 September 2007, the expert panel considered a report entitled Pittwater Local Government Area Cancer Incident Study 1996 to 2005 produced by the Northern Sydney Central Coast Public Health Unit. The expert panel concurred with the report’s conclusions that there “is no evidence of increased cancer rates in the Mona Vale postcode for the period 1996 to 2005”.

41 The expert panel convened in meetings on 11 February and 18 March 2008. At these meetings the expert panel reviewed the report entitled Retrospective Air Quality Impact Assessment Unomedical Sterilisation Process, Mona Vale, New South Wales produced by HLA, and considered that “the annual average levels of Ethylene Oxide estimated in the period 1986 to 2007 were suitable for assessing past human health risk”.

42 On 18 March 2008, the expert panel also considered a document entitled Estimate of Additional Cancers due to Ethylene Oxide Exposure at Mona Vale. The document was produced by the Northern Sydney Central Coast Public Health Unit at the request of the expert panel.

43 On 9 April 2008, the expert panel produced a document summarising from the expert panel’s work, entitled Past Community Exposure to Ethylene Oxide in facilities in Mona Vale. The document was a consensus statement agreed to by the entire panel.

44 Professor Stewart stated that he considered that the document was “an accurate summary of the expert panel’s work. I also concur with the expert panel’s conclusion that, ‘on balance, although there may have been a low level of cancer risk present, it is unlikely that the historical exposure to Ethylene Oxide from the operations of the Bassett Street and Willmette Place facilities has resulted in as much as one additional case of cancer among local residents’”.

45 However, Professor Stewart further stated in his affidavit that:

Ethylene oxide is categorized by International Agency for Research on Cancer (IARC: an arm of the World Health Organization) as being a cancer-causing hazard in common with tobacco smoke, asbestos and benzene: all four agents are included in the current listing of IARC Group 1 carcinogens. Pollution of the workplace or general environment by these agents and similarly categorized substances is properly addressed from the perspective of preventing exposed persons being at risk.

Scientific data particular to ethylene oxide limit specification of quantitative risk – the actual number of cancer cases anticipated to result from a particular circumstance or level of exposure – by comparison with some other carcinogens. This consideration does not qualify or reduce the imperative to ensure that preventable human exposure to ethylene oxide does not occur by the adoption of any practicable procedure(s) known to eliminate or markedly reduce such exposure.

46 Having said this, in cross examination Professor Stewart agreed that:

there is a lack of definitive evidence using the word to mean unequivocal proof of the type associated with say asbestos or tobacco smoke as causing cancer. There is not, however, a complete lack of evidence as far as studies have been done and there is what might reasonably be characterised as inference of increased risk but it is not definitive.

47 Professor Stewart also agreed that all the studies were concerned with the occupational exposure to EtO and centred around employees in industrial premises where EtO was being used primarily in the sterilisation process of medical instruments. Moreover, the studies concerned exposure over a number of years in the workplace at “the highest levels that humans are exposed” to EtO. Professor Stewart noted that the highest levels of exposure were in the workplace and levels of exposure “metaphorically speaking beyond the facility fence are invariably less”.

48 During the cross examination of Professor Stewart the following exchange took place:

Q. And it would it be fair to say so much so that is that environmental exposure is so markedly less than an industrial occupational situation that no one has ever attempted to demonstrate any environmental causation of cancer?
A. By ethylene oxide specifically as distinct--

Q. By ethylene oxide?
A. Yes, that’s correct. And the fact that, as you have correctly in my view cited the IRC study, there is inference of increased risk of cancer in the workers but the data are not definitive. And granted that scenario it would not be rational to attempt to detect cancer following lower levels of exposure the rational thing is to keep on monitoring where records are available, the relevant exposed workforce and that would be the focus of all studies. It would almost be impossible in my view to get funding for a study involving environmental exposure.

Q. So is it fair to say Professor, where we stand today in relation to studies there’s simply no evidence that environmental exposure to ethylene oxide has caused cancers in humans?
A. There’s no, there’s no evidence in the direct sense, ..(not transcribable).. study or there’s no study as we just -as your evidence just adduced, no studies have been undertaken therefore there’s no evidence in humans of that result.

…

49 In re-examination, however, Professor Stewart said:

So ethylene oxide, being a material that’s known to cause tumours in experimental animals, but despite studies is not definitively known to cause tumours in humans, would only be studied further in humans in high dose situations even though in public health policy it’s undesirable for people to be exposed to the material.

Q. Why do you add that last qualifier about it being undesirable?

Mr Nicholas Ives

50 In his affidavit affirmed 4 July 2008, Mr Ives stated that he was the Environmental Health Officer for the council during the charge period. His duties as Environmental Health Officer included conducting environmental assessments of industries to ensure compliance, conducting routine inspections of industrial premises and responding to complaints. As part of his duties he was responsible for exercising the provisions of the, amongst other legislation, POEOA.

51 It was Mr Ives who, on 10 November 2006, received a telephone call from an unidentified male person who stated “Unomedical is using Ethylene Oxide with the gas being pumped into the air. EtO is hazardous and can pose serious health risks”.

52 On 17 November 2006, Mr Ives attended the premises at Unomedical for the purpose of conducting a site inspection. He was shown throughout the facility by Mr Anders Kolding. During the inspection he saw EtO monitors mounted on the outside walls of the sterilisation chamber and he observed warning signs that EtO was in use. He was informed by Mr Kolding that the monitors and signage were required by WorkCover.

53 While viewing the sterilisation chambers, Mr Ives had a conversation with Mr Kolding about the sterilisation process. Mr Kolding disclosed to Mr Ives the following information:

(a) that the steriliser was run on average about one and a half times each day;

(b) that about 15 to 20 kg of EtO was used in the sterilisation process and released into the air;

(c) that the release of EtO was not monitored outside the facility;

(d) that the discharge was, according to Mr Kolding, “safe” because when Unomedical first moved to the site it engaged an environmental consultant to ensure its methods were satisfactory. This culminated in a report by the consultant which Mr Kolding stated that he would send to Mr Ives; and

54 Mr Ives subsequently drafted a Environmental Compliance Inspection report dated 22 November 2006. The report stated:

Inspection result: ethylene oxide is used in steralisation (sic) process. There does not appear to be any monitoring. The company have an environmental consultant who advised the meathod (sic) is satisfactory. After discussion with DEC there are levels that should not be exceeded and Council will require Unomedical to show that the use of Ethylene Oxide meets the criteria.

55 On 6 June 2007, Mr Ives attended a meeting at Unomedical, the purpose of the meeting was for Unomedical to present the findings of the emission testing conducted by HLA.

56 As a result of the findings by HLA and information received from DECC which specified the standard EtO when measured in ambient air should not exceed 0.0033 mg/m³ (or 3.3 ug/m³), Mr Ives issued the First Prevention Notice. The First Prevention Notice prevented Unomedical from utilising EtO until they were able to produce documented evidence they had complied with the accepted standard of 0.0033 mg/m³. As a result, Unomedical was required to temporarily cease sterilisation activities at the facility, which it did.

57 In relation to the earlier audit report that Mr Kolding had referred to during the site inspection, Mr Ives discovered that council records indicated that the report was completed by EES for Unomedical in November 2002. A copy of the report was not on council files. Between 14 to 17 August 2007 Mr Ives sent a number of emails to Mr Kolding requesting a copy of the EES report. It was never received.

58 Under cross examination, Mr Ives stated that he had observed monitors at various places inside the facility, which Mr Kolding had explained to him were to ensure that the levels of EtO inside the premises met occupational health and safety standards. Mr Ives stated that he had observed the premises to be spotless and efficiently operated and that it was clear to anyone inspecting the premises that EtO was being used as part of the industrial process carried out at the facility.

59 Mr Ives also stated that Mr Kolding had told him that EtO was emitted through the stack at the top of the roof and that he showed Mr Ives the location of the stack. Mr Ives stated that the stack could easily be seen standing beside the facility, because it projected approximately 6 to 8 m above the roofline. However, Mr Ives said that in his opinion to the untrained eye it would not be known that the stack was a discharge point for EtO.

Mr Andrew Doig

60 In his affidavit sworn 23 June 2009, Mr Doig stated that he was the Director of AEBN. On 31 May and 1 June 2006, AEBN held a workshop entitled Environment Management Practitioners’ Workshop. One of the attendees of that seminar was an employee of Unomedical, namely, Ms Annegrete Kolding.

61 After the conference, Mr Doig received a telephone call from Mr Paul Orton of Unomedical. Mr Orton requested that AEBN provide Unomedical with some general environmental information in relation to its sterilisation operation. Mr Doig agreed to the request.

62 Over the course of a number of months Mr Doig and Mr Kolding exchanged various communications by way of emails and telephone calls. The subject matter of these communications was the use of EtO at the facility.

63 In or around November 2006, and at Mr Kolding’s invitation, Mr Doig took a tour of Unomedical’s operations at the facility. During the tour, Mr Doig had a discussion with Mr Kolding in which Mr Kolding sought further information concerning permissible EtO emission limits. Mr Doig was also asked to provide general information on the environmental impact of EtO. Mr Doig stated that the discussions were informal in nature.

64 After the tour Mr Kolding and Mr Doig had a telephone conversation to the following effect:

AD Hello Anders, it’s Andrew Doig.

AK Hello Andrew.

While the document doesn’t contain any stack limits for ethylene oxide, it does contain ground level concentrations. However, it is largely used during development assessment for premises that are regulated by the EPA.

Based on the facts you told me that Unomedical is already operating under a valid development consent and the site isn’t regulated by the EPA because, it’s not a type of industry listed in Schedule 1 of the Protection of the Environment Operations Act 1997 and the Approved methods only recently included ethylene oxide, it appears it does not apply directly to the site for setting stack emissions limits.

AK Thank you for looking into that for me. It’s much appreciated.

AK Goodbye.

65 Mr Doig subsequently referred Mr Kolding to an air pollution consultant for advice.

66 Under cross examination, Mr Doig stated that he had told Mr Kolding that it was his understanding that because the facility was not scheduled there were no stack limits in relation to the emission of EtO.

Ms Angela Daly

67 In her affidavit sworn 3 July 2009, Ms Daly states that from August 2002 until January 2003, she was employed by the council as an Environmental Health Officer. During this period she carried out a number of environmental audits of industrial and commercial premises in the council local government area. These audit inspections were of a “general nature” in as much as “the primary focus was on whether the goods were properly stored, whether stormwater drains were adequately protected from any discharges of foreign materials, whether any waste materials were being dealt with properly”. Ms Daly said that she did not undertake any desktop evaluation of premises before undertaking the inspections, rather she simply relied on what she saw and was told during the course of the inspection.

68 One of the inspections carried out by Ms Daly was of the facility. During the inspection she was accompanied by Mr Kanda from Unomedical. Whilst on the inspection, Ms Daly completed an inspection sheet based on her observations and on what she was told. Ms Daly stated that during the course of the inspection she did not see any visible air emissions such as steam or smoke. Ms Daly stated that she was unfamiliar with the processes carried on at the facility.

69 Ms Daly stated that whilst she saw material safety data sheets (“MSDS”) for chemicals used in the maintenance of the cooling tower she did not see an MSDS for the goods stored at the premises, including EtO.

70 Ms Daly stated that she had no recollection of anyone telling her at the time of the inspection, or any time thereafter, that EtO was discharged into the air. Ms Daly stated that whilst she was aware that EtO was stored at the facility and used in the process of sterilising medical devices, she did not know how it was used and was “very surprised when I read in the local press in 2007 that EtO was, according to those reports, being discharged to the atmosphere from the premises”.

71 The Pittwater Council Environmental Audit Inspection report completed by Ms Daly stated as follows:

Air Quality Management

No evidence of air emissions (pollution control devices etc not relevant).

…

Recommendations

No recommendations

72 The report was sent to Maersk in Denmark on 29 November 2002. She was not aware of any response from Maersk or Unomedical.

73 On the same day, Ms Daly sent to Mr Kanda a copy of a summary report of conditions observed by her at the time of inspection of premises on 22 November 2002. The letter attaching the summary report referred to having been allowed to read the report prepared by EES in May 2002. The letter stated that if Mr Kanda had any enquiries regarding the matters raised in the audit that he should contact her. No contact was forthcoming.

74 Ms Daly stated under cross examination that at the time she worked with the council she knew that the council was the appropriate regulatory authority for non-scheduled industrial premises (of which Unomedical was one) within the council’s jurisdiction. Ms Daly also agreed that the audits that she conducted for the council were aimed at meeting the objectives set out in s 172 of the POEOA.

75 Ms Daly also agreed that the audits she conducted were primarily concerned with the storage of waste to protect the stormwater system and water quality. Thus they were very general audits of no more than half an hour to 40 minutes duration and could not be considered to be comprehensive.

Mr Peter Ellis

76 Mr Peter Ellis, who was not required for cross examination, stated in his affidavit affirmed 18 June 2008, that on 25 May 2007 his company, Peter J Ellis and Associates Pty Ltd, prepared a proposal for Unomedical to increase the overall efficiency and capacity of its sterilisation process based on discussions with Unomedical’s plant engineer, Mr Hop Lam.

77 Subsequently, Mr Ellis was asked by Mr Ross Halfacree and Mr Brandon Buhler on behalf of Unomedical if he was able to facilitate the installation of an abatement system to the steriliser. Mr Halfacree advised Mr Ellis that he had ordered the abatement system (consisting of a balancer and catalytic converter) from overseas. The function of the abatement system was to treat the EtO prior to it entering the atmosphere following sterilisation. This process involved the EtO reacting with a catalyst and being converted into carbon dioxide and steam prior to it entering the atmosphere.

78 Mr Ellis stated that prior to the installation of the abatement system, there was no external device which treated the EtO before it was released into the atmosphere. Rather, Unomedical’s process for disbursing EtO was to dilute it with nitrogen and at the conclusion of the sterilisation cycle to pump the gas through a pipe which went from the steriliser directly through the ceiling roof and into the atmosphere.

79 The installation of the abatement system, which Unomedical imported from Denmark, took approximately one month to complete, including testing. During the testing phase the emission levels of EtO were measured by HLA to ensure that Unomedical complied with air quality requirements.

Mr John Court

Use of Overseas Literature and Learning

80 The EPA relied upon expert reports by Mr John Court, an environmental engineering consultant with expertise and experience in the investigation, assessment and control of environmental pollution.

81 Attached to his reports were various overseas learning and academic articles on the adoption of controls for the emission of EtO from commercial sterilisers. The material came principally from Canada, the United States and Denmark.

82 In his oral evidence, Mr Court identified which parts of the literature and learning he had relied upon and had adopted thus forming either directly or indirectly the basis of his expert report.

83 Unomedical objected to the admission of this overseas literature and learning on the basis of relevance, first, because the commission of the offence occurred in Australia, and second, because Unomedical had conceded that it could have (and subsequently did) implement practical means to limit the EtO emissions, but that in its opinion it was not necessary to do so. Second, it objected to the material on the basis that it was hearsay. Third, and in the alternative, Unomedical sought to exclude the material pursuant to either ss 135 or 137 of the Evidence Act 1995 on the basis of its prejudicial nature.

84 In PQ v Australian Red Cross Society [1992] 1 VR 19 the plaintiff claimed damages for a HIV infection received from an infusion of blood products administered in the treatment of his haemophilia. Claims in negligence and under the Trade Practices Act 1974 (Cth) were made. In a trial before a jury, an issue arose as to the evidential use that could be made of information in authoritative scientific publications and the data relied upon by scientific experts in forming opinions and making decisions. McGarvie J held that articles that had been discussed and analysed could not be admitted as exhibits because the publication itself was hearsay. That is to say, the publication itself was not evidence of the truth of statements it made as to the information or data it contained. If, however, the expert adopted the publication referred to or quoted, then it became part of the testimony of the expert witness and therefore admissible (at 35-36).

85 However, his Honour went on to hold that the publications could be admissible as exhibits if the contents were relevant to the issue of what information was available at a particular time and/or how reliable the information was (at 36-37). An important issue in that case was what the defendants knew or ought to have known about the risks of persons becoming HIV+ through the use of blood products and the available means of eliminating such risks.

86 The decision in PQ has been subsequently followed in a number of Australian jurisdictions (see, for example, Fazio v R (1997) 69 SASR 54 at [41]; Woods v The Director of Public Prosecutions (2008) 38 WAR 217 at [53]-[61]; Workcover Authority of NSW (Inspector Simpson) v CNHAustralia Pty Ltd (formerly Case Corporation Pty Ltd) [2006] NSWIRComm 220 at [89], [106], [109], [110] and [111] – [116]; R v Jung [2006] NSWSC 658 at [60]; Street v Luna Park Sydney Pty Ltd [2007] NSWSC 1529 at [7]; Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618 at [698]-[783]; Bodney v Bennell (2008) 167 FCR 84 at [92]; J D Heydon, Cross on Evidence, Vol 1, (1996) Butterworths at [29150] and I Freckelton SC and H Selby, Expert Evidence Law, Practice, Procedure and Advocacy (4^th ed), (2009) Lawbook Co, p 129).

87 Accordingly, the overseas material identified by Mr Court as having been adopted and relied upon by him in the formulation of his reports was admitted into evidence without limitation on the basis that, first, it was relevant in determining the ambit of the term “practicable means” under s 128(2) of the POEOA, second, it was relevant to determining what knowledge Unomedical ought to have had during the charge period as to what were the practicable means available to prevent or minimise air pollution (leaving aside the question of whether these means were necessary), and third, to assess the accessibility of this material.

88 Unomedical took further objection to the literature and learning identified by Mr Court that had not been relied upon or adopted by him in stating his expert opinion. The EPA submitted that the purpose of this tender was not to rely on the truth of the contents of these publications, rather the material demonstrated the knowledge Unomedical ought to have had during the charge period of the practicable means available to it to prevent or minimise air pollution.

89 Given this stated purpose, this latter category of literature and learning was admitted subject to a limitation pursuant to s 136 of the Evidence Act 1995 that the material was evidence only of the fact of their contents and not of the truth of the facts and opinions contained therein (PQ at 36-37 and R v Karger (2001) 83 SASR 1 at [71]-[72]). As it transpired, in light of the evidence of Mr Kolding, very limited weight was required to be attributed to this latter category of publications.

90 With respect to domestic EtO emissions where that product was used as a sterilant:

(a) in the Approved Methods and Guidance for the Modelling and Assessment of Air Pollutants in New South Wales (EPANSW 2001) (“the 2001 Approved Methods document”) an acceptable design ground-level concentration of EtO from any source after dispersion was specified to be 0.05 mg/m ³ (based on a 3-minute averaging period);

(b) under the 2005 Approved Methods document the design ground-level concentration could not be greater than 0.0033 mg/m ³ and a requirement was introduced to control emissions of EtO to the “maximum extent achievable”;

(c) in Victoria, the design ground-level concentration must be 3.0 mg/m ³ and EtO emissions had to be reduced to the “maximum extent achievable”; and
(d) at a Commonwealth level, the National Code stated that EtO was a category 2 carcinogen which meant that it was a “probable” human carcinogen and should be treated as carcinogenic to humans and “handled with great caution”. The Code went on to state that the absence of a relevant exposure standard or compliance with a relevant exposure standard should not preclude further efforts to reduce exposure. Exposure should be controlled to the “lowest practicable level”. The Code recommended that exhaust gases from a steriliser should be scrubbed or consideration should be given to a catalytic converter or incinerator.

91 In respect of EtO emissions where the product is used as a commercial sterilant, what the literature and learning disclosed in relation to overseas practice was equivocal. For example, as at 2001 (Environment Canada, “Summary of Technical and Socio-Economic Background Study for Ethylene Oxide Sterilisation Applications”, Final Report, January 2001, Cheminfo Services Inc):

(a) approximately 71% of the annual potential EtO emissions from its use as a sterilant in Canada were destroyed by reason of the use of an acid-water scrubber, thermal oxidation or a catalytic converter;

(b) there were no harmonised European emission standards for EtO used as a sterilant;

(c) the United Kingdom, France, Spain, Portugal, Italy and Greece had no emission standards in place for EtO;

(d) the Netherlands had an EtO stack concentration standard of 2 mg/m ³ ; and
(e) Germany, Belgium, Ireland, Denmark and the Czech Republic had an EtO stack concentration standard of 5 mg/m ³ .

92 In the United States, a 99% elimination of EtO emissions from a normal steriliser cycle was required.

Use of the Approved Methods Documents

93 In giving his opinion, Mr Court relied upon the Approved Methods documents (2001 and 2005 versions).

94 Again, Unomedical submitted that these documents were inadmissible because they were only relevant to determine emission standards for the purpose of scheduled premises under s 128(1). That is to say, there was no reference in the documents to non scheduled premises, and therefore, they had no application to the offence as charged under s 128(2).

95 The EPA pressed for the admission of these documents notwithstanding that the facility was not scheduled and that no prescribed emission limits or standards applied for the purposes of the POEOA. Rather, the EPA relied upon oral evidence given by Mr Court that he regularly had regard to these documents, and used them to assess the emission controls of non-scheduled premises. It was Mr Court’s evidence that in his experience, including in his experience dealing with local councils, the documents were commonly used as a reference resource for both scheduled and non-scheduled premises. However, Mr Court conceded that the Approved Methods documents were not widely available and, in particular, that they had not been introduced in 2000 when the first DA was lodged with the council by Unomedical for use of the facility.

96 The Approved Methods documents were admitted because:

(a) while clearly most relevant to the offence created under s 128(1), this did not of itself preclude any consideration of them in respect of the offence as charged under s 128(2); and

97 Having said this, the weight to be accorded to the Approved Documents was tempered given the limitations identified above surrounding their direct application to the facility.

98 In his report dated 27 June 2008, Mr Court opined that:

(a) first, equipment for effectively controlling EtO emissions had been developed in North America and Europe. Either scrubbing with water or acid, oxidation by direct flame or by using a catalytic converter were all well established techniques for EtO control, and moreover, were available for application in commercial sterilisation as at 2000;

(b) second, regulatory controls limiting the amount of EtO that could be emitted into the atmosphere were introduced in the 1990s in the United States and some European countries. Had Unomedical been operating in these countries it would have been compelled to significantly reduce its EtO emissions. Initial air quality modelling by HLA in May 2007 indicated that the EtO emissions from the facility were well in excess of the ground level concentration of 3.3 ug/m ³ . In fact subsequent modelling by HLA predicted that the ground level concentration of EtO was 8.3 ug/m ³ ;
(c) third, while there were no emission limits in New South Wales that were applicable to the facility, the 2005 Approved Methods document assessment requirements for scheduled premises mandated a 3.3 ug/m ³ ground level emission concentration with the additional requirement that emissions at the source be controlled to the maximum extent achievable using “practical means” before dispersion could be considered. Unomedical’s emissions would not have complied with the 2005 requirements;

(d) fourth, as a result of its operations in Denmark, Unomedical ought to have been aware of the need to stringently control emissions of EtO resulting from its sterilisation processes;

(e) fifth, at a minimum Unomedical should have undertaken an environmental assessment of air quality impacts from the facility much earlier that it did; and
(f) sixth, the subsequent installation in 2007 of an abatement system effectively eliminating the EtO emissions from the steriliser was a demonstration of the “practical means” that Unomedical could have implemented earlier.

99 In his report dated 4 June 2009, Mr Court described seven options for control of EtO emissions from commercial sterilisers. These ranged from absorption, oxidation, condensation and reaction with solids. Further, after surveying the regulations in Denmark and the United States from 2002 to 2007, Mr Court concluded that the size of the operation of the steriliser at the facility during 2002 to 2006 would have necessitated the installation of emission reduction equipment to reduce EtO discharges had it been operating in either of those two countries.

100 To the extent that it was relevant, it was Mr Court’s opinion that the words “practicable means“ meant minimising pollution as far as possible by using available technology. This, Mr Court acknowledged, meant striking a balance between what was desirable and what was practically and commercially achievable. It did not mean employing the best available technology irrespective of the commercial implications. In this regard, Mr Court readily agreed that there was no abatement system that could be utilised at the facility that would achieve zero emission levels without significantly changing the method of sterilisation.

101 With respect to the term “as necessary”, again to the extent this evidence was relevant, it was Mr Court’s opinion that given the toxicity of EtO, and consistent with the approach adopted to air pollution management since the mid 1990s in Europe and the United States, this meant to control emissions to the maximum possible extent.

102 Mr Court did not agree with Unomedical that an adequate method of minimising EtO emissions to the atmosphere was to emit them from a tall stack. This was because stack emission did not minimise EtO emission from the sterilisation process, instead it minimised exposure because the height of the stack ensured a greater dispersion of the chemical.

103 Mr Court stated that the amount of additional beneficial dispersion obtained from increasing the velocity of the emissions of EtO from the stack was, in his view, limited. Mr Court conceded, however, that he gave this opinion absent any testing of disbursement velocities from the facility.

104 In terms of reducing emissions by using only a full load for sterilisation, Mr Court stated that while this reduced the overall amount of EtO in use over time, per load any decrease in the rate of EtO emissions would be minimal.

105 Finally, with respect to flushing, Mr Court stated that, in his opinion, this had no impact on the amount of EtO emitted because the same amount of EtO was emitted only in a more diluted form.

106 Unomedical sought to discredit Mr Court on the basis that he lacked sufficient practical expertise or experience with medical sterilisation processes, and in particular sterilisation processes using EtO. I reject this criticism. While it is true that Mr Court did not have any direct experience with the use of EtO in the course of the manufacture and sterilisation of medical instruments, he nevertheless had nearly four decades of experience and training as a chemical engineer, and in particular, in analysis of emissions resulting from industrial processes. I therefore do not accept the submission by Unomedical that Mr Court was unqualified to give the opinions he did. Having said this, Mr Court’s lack of direct experience with sterilisation processes using EtO must nevertheless be taken into account when assessing his evidence, albeit, in my opinion, to a limited degree.

Unomedical’s Evidence

Mr Anders Kolding

107 In light of the ultimate conclusion that I have reached concerning Unomedical’s guilt, as a matter of fairness to Unomedical I have set out in considerable detail (more than would otherwise be necessary or appropriate) the oral evidence of Mr Kolding, Unomedical’s only witness in the proceedings.

108 As referred to above, Mr Anders Kolding was the managing director of Unomedical during the charge period. Mr Kolding commenced his employment with Unomedical on 1 September 1980. He ceased his employment with the company around 31 March 2009.

109 At the time he commenced employment with Unomedical, Mr Kolding was located in Denmark. At that time Unomedical was known as Pharma Plast. The company manufactured medical devices and was owned by the shipping group Maersk. It later changed its name to Maersk Medical, then Unomedical.

110 Mr Kolding stated that he had worked for Unomedical for approximately 30 years. As a consequence, he had considerable experience with EtO and he knew that it was regarded as a carcinogen. After being promoted to plant manager (from production assistant) Mr Kolding became responsible for a plant outside of Copenhagen, which did not have an on-site steriliser. Later he was promoted to general manager for the same site and he then assumed the position of managing director of Unomedical Australia on or about 25 June 1996. As managing director he was responsible for the entire facility, namely, manufacturing, sales, marketing, distribution and its general operation.

111 Mr Kolding stated that Unomedical typically manufactured single use disposable medical products. This included catheters, urine drainage bags, wound drainage products, custom procedure packs, and pre-prepared packs for all kinds of operations. Most of the products were sterilised on site at Unomedical. The products were supplied to hospitals across Australia and New Zealand. The products were generally supplied weekly or fortnightly.

112 Mr Kolding stated that in the Australia and New Zealand market Unomedical was considered to be a dominant operator with considerable market share. Typically, Unomedical serviced approximately 20 million people in Australia and 5 million in New Zealand. By contrast, Unomedical’s European plants serviced 600 to 700 million across Europe, the United States and the Asian region. Consequently the sterilisers used by Unomedical Denmark were considerably larger. Mr Kolding’s estimate was that in Denmark, Unomedical sterilised up to 10 times more products than at the facility in Australia.

113 When Mr Kolding commenced as managing director of Unomedical Australia in 1996, the plant operated next door to the current facility at Wilmette Place. In February 2002, the company relocated to Wilmette Place because Unomedical needed larger premises. Thus the two sites merged.

114 Unomedical engaged Mr Ross Halfacree, a consultant, to assist in the preparation of the first DA required for the relocation. Mr Kolding stated that he had seen the development application at the time it was lodged with the council.

115 The first DA clearly stated in its description of the proposed development, that there would be sterilisation of manufactured medical products by a fully automated process control using EtO. The application stated that EtO was classified under the Dangerous Goods Act 1975. Mr Kolding conceded that the first DA did not, however, state that EtO would be emitted into the atmosphere as a consequence of the sterilisation process.

116 But Mr Kolding stated that if such information had been asked for it would have been provided. Mr Kolding said that at the time of the relocation he had assumed that the council knew about the EtO emissions because Unomedical had been operating for the past 15 to 20 years in adjacent premises. However, Mr Kolding accepted that no plan was attached to the first DA that showed an emission stack. This was because, Mr Kolding stated, Unomedical was not required to show a stack on the plans given that the application was for a relocation and continuation of Unomedical’s existing operations.

117 Mr Kolding stated that prior to submitting the first DA, Unomedical had consulted with the council and had been advised by Mr Nick Sutton, the council planner, that because Unomedical had been operating a sterilisation plant for the past decade, existing approvals could be moved across to the new site and that nothing other than a Statement of Environmental Effects was required.

118 Mr Kolding also stated that before the fully automated steriliser was installed at the facility, Unomedical had checked with the EPA as to what, if any, approvals were required for the operation of the steriliser. Mr Kolding said that he had asked his operations manager, Mr Kanda, to ensure that all necessary approvals were obtained. Mr Kanda had informed Mr Kolding that he had been advised by the council that Unomedical could continue operating under the same approvals that Unomedical had previously had. That is to say, Unomedical was not required to limit the amount of EtO emissions from the facility at Wilmette Place.

119 Further, Mr Kanda told Mr Kolding that he had spoken with the EPA and had been advised by it to ask the council, as the regulatory authority, what, if any, limits there were on the emission of EtO from the facility. It was as a result of this conversation that Mr Kolding concluded that no catalytic converter needed to be installed at the facility at this point in time.

120 Mr Kolding stated that had the council or the EPA required Unomedical to conduct emissions testing or to install an abatement system to reduce emissions, Unomedical would have done so.

121 Mr Kolding stated that the advice given to Mr Kanda, relayed to him via Mr Kanda, was that “10 tonnes [of EtO] was the critical number, as long as you were below 10 tonnes there was no requirement for you to put any controls in and you will be regulated by the council and Unomedical back at that time only used about 5.5 tonnes per year”. Mr Kolding stated that in 2006 the maximum tonnage of EtO used by Unomedical was about 9 tonnes.

122 Under cross examination, Mr Kolding accepted that in his record of interview he had made no mention of any of the conversations between himself and Mr Kanda concerning the advice given to Mr Kanda by the EPA nor had he made any mention of the 10 tonne threshold. Mr Kolding accepted that there was no record of the EPA having had any of the conversations with Mr Kanda as alleged.

123 Mr Kolding stated that his belief during the charge period that the level of EtO that was being emitted from the stack never exceeded a level which could cause harm to persons outside the facility, was based on, first, his experience of EtO emissions in Denmark, and second, on what his operations manager, Mr Kanda, who had been working at Unomedical for a decade had told him.

124 Mr Kolding stated that the May 2002 EES environmental due diligence report had not been received by him, but by the head office in Denmark. It had been prepared by Unomedical answering a questionnaire probably, Mr Kolding said, completed by Mr Kanda, but checked by himself. He recalled that the questionnaire, the completed version of which could not be found, dealt with the issue of the EtO emissions.

125 Under cross examination Mr Kolding accepted that no irregularities were identified by EES in the audit. Furthermore, nobody from Denmark had contacted Mr Kolding to say, having read the EES report, that when it stated that the questions concerning air emissions were not applicable to the facility, that this was incorrect because EtO was being discharged from it.

126 Contradicting his earlier evidence, Mr Kolding stated that the responsibility for checking the correctness of the conclusions regarding air emissions contained in the EES report fell not to himself but to his operations manager, Mr Kanda. The task had been delegated to him.

127 In November 2002 the council conducted its own environmental audit of the facility. Ms Angela Daly of the council was the officer responsible. Mr Kolding was not present when Ms Daly conducted the environmental audit. Mr Kanda, however, was. Mr Kolding stated that if, as a result of the council audit, Unomedical had been asked to conduct air emission tests or to install an abatement system, it would have done so.

128 In relation to Ms Daly’s environmental audit report, Mr Kolding stated that he knew, as at the date it was sent, that what was stated in the report (namely, that there was “no evidence of air emission (pollution control devices etc not relevant)”) was not correct because there were emissions from the facility. It was Mr Kolding’s evidence that Mr Kanda would have told Ms Daly during the audit about the EtO emissions. According to Mr Kolding, if Mr Kanda had not discussed this with Ms Daly “it would be a mistake”. But, Mr Kolding agreed that while Ms Daly would have seen the emission stack on her inspection, EtO emissions were odourless and were not visible to the naked eye.

129 In relation to the second DA in 2005 to increase the capacity of the gas tanks from 80 kgs to 750 kgs, Mr Kolding accepted that the fact that EtO was being emitted into the atmosphere as a result of the sterilisation process was not disclosed in the application. Mr Kolding stated, however, that had the council made such inquiries this information would have been provided to it.

130 Mr Kolding gave evidence that prior to the beginning of 2006 the steriliser would have been operating at approximately 80 to 85 % capacity. That is to say, it would have been using 8 to 9 tonnes of EtO per year. Mr Kolding stated that typically the operation of the steriliser was five days a week, but there were times when it was operating “24/7”. Mr Kolding stated that by the end of the charge period, Unomedical was very busy and the steriliser was generally operating seven days a week.

131 Mr Kolding stated that from early to mid 2006 Unomedical sought to expand its production capacity. This anticipated expansion would have taken Unomedical over the 10 tonne annual limit for use of EtO in its operations and as a consequence Unomedical gave consideration to installing an abatement system using a catalytic converter. Consequently Mr Kolding engaged in discussions with a company called Lesni to provide Unomedical with a catalytic converter.

132 Mr Kolding gave evidence that about this time he consulted Mr Andrew Doig of AEBN and requested him to inspect the premises and to give advice on whether Unomedical was “right in our assumptions of what was required for us to operate the steriliser”. Mr Doig attended the premises and Mr Kolding showed him the steriliser and explained the mechanics of its operation. Mr Kolding stated that Mr Doig subsequently telephoned him and “confirmed that he was on the same belief as I was”, namely, that there were no emission limits on the operation of the steriliser.

133 Mr Kolding recalled that he and Mr Doig had a conversation about the 10 tonne Commonwealth National Pollutant Inventory (“NPI”) threshold. Mr Kolding also recalled Mr Doig telling him that he should engage an air pollutant consultant for the purpose of properly assessing the EtO emissions from the stack at the facility. That is to say, “to get an idea of what the limit and what our emission was, yes”.

134 Mr Kolding stated that when he spoke to Mr Doig about the 2005 Approved Methods document, Mr Doig had told him that it did not apply to Unomedical.

135 However, under cross examination Mr Kolding admitted that he was aware of the existence of the document prior to his conversation with Mr Doig (initially Mr Kolding stated that he had not read the document whereas Mr Kanda had and that Mr Kanda had not communicated the contents of the document to him). He agreed that he had read parts of the 2005 Approved Methods document in 2006. In particular, he had read section 7.2.1 “Impact Assessment Criteria” and table 7.2A. Mr Kolding stated that as a consequence of reading section 7.2.1 and table 7.2A he understood that EtO was considered to be a principal toxic air pollutant; that it was carcinogenic; that it was highly toxic; that it was utogenic; that it was highly persistent in the environment and that it had to be minimised to the maximum extent achievable through the application of best practice process design and/or emission controls.

136 Mr Kolding gave evidence concerning the inspection by Mr Ives on 17 November 2006. He stated that Mr Ives had asked to see the emission point and that he had obliged. In the weeks that followed, Mr Ives had asked Unomedical to assess and test the EtO emissions. Unomedical agreed to do so and engaged HLA to perform the tests.

137 Mr Kolding agreed that it was not in dispute that the testing revealed EtO emission levels of 3.3 ug/m³. It was also not a matter of controversy that the subsequent HLA analysis indicated that 99% of the EtO used in the sterilisation process was discharged to the atmosphere via the stack.

138 As a consequence of the tests and the resulting prevention notices, a catalytic converter abatement system was installed at the facility which was obtained from “an idle system which we got from Denmark, from one of the old sites in Denmark”.

139 Mr Kolding accepted that prior to the involvement of HLA, Unomedical had established no system to monitor EtO emissions outside the facility and no analysis had been conducted to determine how much EtO was being emitted from the facility’s stack.

140 Inside the facility, by contrast, electrochemical detectors were calibrated against EtO and set to a 1 ppm (1 part per million) detection rate. These detectors were there, Mr Kolding stated, for the purpose of ensuring compliance with occupational health and safety standards.

141 Mr Kolding noted though, that these internal detectors were not appropriate for monitoring the ambient value of EtO outside the facility. To obtain this information, dispersion modelling was required based on the stack emission figures.

142 While Mr Kolding initially stated that he was unaware that one available means of monitoring ambient EtO values was to ascertain the stack concentration or emission of EtO and then to use modelling to determine where and how the EtO was being dispersed, he later conceded that during the charge period Unomedical could have readily commissioned an expert to model and quantify the dispersion of EtO from the facility but that it did not. Mr Kolding stated that he had not previously monitored the EtO emitted because “I have never been asked to do it”.

143 Mr Kolding did not know whether or not monitoring was undertaken by Unomedical in Denmark. This was because Mr Kolding had never asked. Nevertheless Mr Kolding accepted that there were persons to whom enquiries could have been made about undertaking such testing and modelling, in particular, Unomedical’s EtO specialist, Mr Alan Happel.

144 On 21 July 2007, Mr Kolding sent an email to Mr Henrik Brandt, the CEO of the Unomedical group, in Denmark. The email stated as follows:

Hi Henry, the reason I called you Friday evening was to inform you about a critical development in our EtO operation. As you probably know we have over the last few years budgeted for a catalytic converter which is a known process to reduce EtO emission to the atmosphere. According to our legal environmental advisors and the way we interpret the legislation we are not obliged to have installed such a converter and we therefore postponed the investment as long as possible. However late last year the local council asked Unomedical to conduct a voluntary air quality impact assessment for the sterilisation process. We conducted the test in early June and submitted the report which was of a critical character. We had included a plan on how to reduce our future emissions to an acceptable level.

145 Mr Kolding’s evidence was that he was convinced that Unomedical had been conducting the sterilisation process at the facility by “such practical means which is necessary to minimise pollution, absolutely, yes”. This belief was based on:

292 Lamer CJ’s reasons in Jorgensen were subsequently endorsed by the Supreme Court of Canada in Lévis (City) v Tétreault; Lévis (City) v 2629-4470 Québec Inc [2006] 1 SCR 420 (Lebel J, McLachlin CJ and Bastaraceh, Binnie, Fish, Abella and Charron JJ concurring).

293 In Lévis the Court referred to the defence as discussed in Jorgensen by Lamer CJ and observed that (at [22] and [27]):

22 This Court has firmly and consistently applied the principle that ignorance of the law is no defence. It has given effect to this principle not only in the context of the criminal law itself, but also in cases involving regulatory offences ( Molis v. The Queen , [1980] 2 S.C.R. 356; Pontes ). However, the inflexibility of this rule is cause for concern where the error in law of the accused arises out of an error of an authorized representative of the state and the state then demands, through other officials, that the criminal law be applied strictly to punish the conduct of the accused. In such a case, regardless of whether it involves strict liability or absolute liability offences, the fundamental fairness of the criminal process would appear to be compromised. Although the Court has not ruled on this point, Lamer C.J. responded to these concerns, in concurring reasons in R. v. Jorgensen , [1995] 4 S.C.R. 55, by proposing to recognize the defence of officially induced error and attempting to define the conditions under which the defence would be allowed.

…

27 Although the Court did not rule on this issue in Jorgensen , I believe that this analytical framework has become established. Provincial appellate courts have followed this approach to consider and apply the defence of officially induced error ( R. v. Larivière (2000), 38 C.R. (5th) 130 (Que. C.A.); Maitland Valley Conservation Authority v. Cranbrook Swine Inc. (2003), 64 O.R. (3d) 417 (C.A.)). I would also note that, in this appeal, neither the prosecution nor the intervener, the Attorney General of Canada, has questioned the existence of this defence in Canadian criminal law as it presently stands. At most, the Attorney General of Canada has suggested another condition in addition to those enumerated by Lamer C.J., namely that the act was committed contemporaneously with the reception of the information. I do not think this addition is necessary. The Attorney General of Canada’s concerns relate more to the need to demonstrate that the advice was reasonable and that the accused relied on it. It should be noted, as the Ontario Court of Appeal has done, that it is necessary to establish the objective reasonableness not only of the advice, but also of the reliance on the advice ( R. v. Cancoil Thermal Corp. (1986), 27 C.C.C. (3d) 295; Cranbrook Swine ). Various factors will be taken into consideration in the course of this assessment, including the efforts made by the accused to obtain information, the clarity or obscurity of the law, the position and role of the official who gave the information or opinion, and the clarity, definitiveness and reasonableness of the information or opinion ( Cancoil Thermal , at p. 303). It is not sufficient in such cases to conduct a purely subjective analysis of the reasonableness of the information. This aspect of the question must be considered from the perspective of a reasonable person in a situation similar to that of the accused.

294 The facts of Lévis were as follows. The defendant company was charged with operating a motor vehicle for which its registration fees had not been paid. In response, the defendant raised the defence of officially induced error of law and the defence of due diligence, submitting that a representative of the Société de l’assurance automobile du Québec had earlier made the company pay registration fees for a 15 month period and had told the company that a renewal notice would be sent to it before the period of expiry. Due to an administrative error on the part of the Société (the address to the defendant was incorrect), the renewal notice sent by the Société to the defendant was returned.

295 The Crown’s appeal was allowed. Relevantly, the defence of officially induced error of law, although available, could not be established on the facts because the error by the Société related to, at the most, an administrative practice and not to any legal obligation to pay the fees by the prescribed date. Moreover, the company could not have considered the legal consequences of its conduct on the basis of advice from the official in question nor could it have acted in reliance on that opinion since no information regarding the nature and effects of the relevant legal obligations had been requested or obtained by it (at [30]-[34]).

Acceptance of the Defence Overseas

296 Unomedical was not able to point to any English authorities where the defence, as accepted by the Canadian decisions, has been applied. In R v Dodsworth (1837) 8 Car and P 218; 173 ER 467 the accused was charged with falsely stating electoral qualifications. He had acted on the advice of an election committee. Lord Denman stated that the accused should not be convicted if it could be proved that he had acted bona fide and had “been guided in his conduct in a matter of law by persons who are conversant with the law”. However, properly analysed the decision stands for no more than, in my opinion, the suggestion that evidence of erroneous legal advice may displace the necessary mens rea that a prosecutor must prove where the commission of an offence requires proof of a particular state of mind.

297 While it has been stated that the doctrine might apply in New Zealand, the courts there have yet to unequivocally endorse the defence and have tended to find that on the evidence it could not be established in any event (Tipple v Police [1994] 2 NZLR 362, MacRae v Buller District Council [2005] NZHC 378 at [39]-[41] and Wilson v Auckland City Council [2007] NZHC 287 at [30]-[47]).

Acceptance of the Defence In Australia

298 It is certainly the case that in Ostrowski the High Court did not dismiss the availability of the defence of officially induced error of law. This may have been because, as Unomedical submitted, at the time that Ostrowski was decided the decision of the Supreme Court of Canada in Lévis had not been handed down and the defence had not been entrenched in that country.

299 Unomedical relied on comments by Callinan and Heydon JJ in Ostrowski (at [61]) to the effect that the facts of this prosecution were an example of how “mandatory penalties can operate harshly and unfairly” and that “in the imposition of harsh mandatory penalties, has the appearance of an act of mindless oppression” (at [70]).

300 Unomedical also submitted that an acceptance of the availability of the defence was consistent with the presumption of regularity that official acts are presumed to have been done rightly and regularly (Morris v Kanssen [1946] AC 459 at 475, McLean Bros and Rigg Ltd v Grice (1906) 4 CLR 835 at 849-851, Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 at 163-164, Selby v Pennings (1998) 102 LGERA 253 at 261-262, Hill v Woolhara Municipal Council (2003) 127 LGERA 7 at [51]-[52], Lane Cove Council v Minister for Urban Affairs and Planning (2005) 140 LGERA 185 at [78] and GPT RE Ltd v Belmorgan Property Development Pty Ltd (2008) 72 NSWLR 647 at [78]-[84]).

301 The presumption has been enshrined in legislation, particularly with respect to environmental planning instruments (s 45 of the Interpretation Act). And while the decisions have been divergent, the better view on the authorities is that the presumption can apply to criminal cases, albeit on a more restrictive basis (see the review of the authorities in Selby at 262-266 per Ipp J).

302 In my opinion, however, the presumption is of little assistance to Unomedical. This is because, first, the presumption generally only applies in circumstances where there is a challenge to the performance of a condition essential to the validity of an administrative act or decision upon which an offence depends. No such challenge is mounted here. There is no suggestion that any of the development consents granted to Unomedical were not valid. Second, the presumption has been said not to apply to the substance of development consents (Belmorgan at [82]).

303 Third, the presumption is no more than a rebuttable presumption of fact (Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 at [177]) and as the evidence presently demonstrated, it had been rebutted. For example, and as discussed further below, Unomedical never made a development application that contained an adequate Statement of Environmental Effects detailing the discharge of EtO into the atmosphere, no plan was provided to the council showing the emission stack, no process diagram was provided to the council and the council was never told of the frequency and quantity of the EtO emissions from the facility.

304 Fourth, to the extent that Unomedical sought to draw a comparison with, or make an analogy to, the existence of the presumption in support of the application of the defence of officially induced error of law in Australia, it ignored the fact that Australian courts are generally not supportive of the use of estoppel in administrative law (see the discussion and authorities referred to in Casa v City of Ryde Council (2009) 172 LGERA 348 at [109]-[111] and Page v Manningham City Council (2010) 174 LGERA 48 at [61] and the authorities referred to at footnote 31 of that decision). To permit a defence to be available in Australia, which if established would operate as a stay on the proceedings, would be to, in effect, entrench a species of estoppel against administrative decision-makers.

305 While it is correct to say, as Unomedical did, that Ostrowski does not preclude the operation of the defence in Australia, a close examination of the reasons of that decision cannot give Unomedical the comfort it desires. For example in Ostrowski McHugh J stated (at [53]-[54]):

53 It is irrelevant that Mr Palmer’s mistake was induced by the conduct of an employee of Fisheries WA. That conduct cannot convert a mistake as to the applicable law into a mistake of fact. If a defendant knows all the relevant facts that constitute the offence and acts on erroneous advice as to the legal effect of those facts, the defendant, like the adviser, has been mistaken as to the law, not the facts.
54 Four cases which address this issue are Olsen v Grain Sorghum Marketing Board ; Ex parte Olsen (89) , Loch v Hunter; Ex parte Loch (90), Cambridgeshire and Isle of Ely County Council v Rust (91) and Power v Huffa (92). In the first two cases each defendant claimed that he or she was acting on the erroneous advice of a third party — either a legal adviser or a government official — that the acts in question were legal and that this mistake amounted to a mistake of fact. In the last two cases each defendant claimed that he or she had been given lawful authority to act as charged and that this mistake likewise amounted to a mistake of fact. In each case the defendant’s argument failed, the court finding that each defendant was acting under a mistake of law. Accordingly, the bare fact that the adviser or official may have been mistaken as to the state of the law does not convert the defendant’s mistake into one of fact. Both the adviser or the official and the defendant operate under a mistake of law.

306 Callinan and Heydon JJ, while sympathetic to the plight of the defendant in Ostrowski, expressed a similar sentiment (at [84]-[85], emphasis added):

84 It is impossible not to sympathise with the respondent. On any fair and objective view he was not culpable in any way. To the contrary he was most diligent. He went to the office of the administering authority twice in order to ascertain what his obligations were. Entirely openly and strictly in accordance with his licence he sought to comply with his understanding of what he could do based on official information personally provided by officials.
85 Be that as it may, it is the task of this Court to apply the law by answering the question whether the respondent should be regarded merely as having been ignorant of the law, an excuse which s 22 of the Code would deny him, or whether he had an honest and reasonable, but mistaken, belief in the existence of a state of things which if they had in fact existed would have meant that he was not criminally responsible. The question is an important one. A mockery would be made of the criminal law if accused persons could rely on, for example, erroneous legal advice, or their own often self-serving understanding of the law as an excuse for breaking it, however relevant such matters might be to penalty when a discretion, unlike here, in relation to it may be exercised .

307 The defence of officially induced error of law has been raised on several occasions in this Court. First, in the context of a sentencing decision where in Environment Protection Authority v Fletcher (2001) 114 LGERA 187 (at [116]) Sheahan J went no further than to state that officially induced error may be a mitigating factor in determining an appropriate penalty, and second, in Environment Protection Authority v Goulburn Wool Scour Pty Limited [2003] NSWLEC 200 (at 118]) where pursuant to a finding of not guilty of the offence charged, Talbot J noted that “the concept has not, so far, been imported into Australian law, so far as this Court is aware”.

308 Finally, the entreaty by Unomedical to recognise the defence of officially induced error of law in Australia bears more than a passing resemblance to the earlier invitation to the Court to accept the defence of due diligence as available in this country. Again, that defence had been recognised in Canada (R v City of Sault Ste Marie (1978) 85 DLR (3d) 161). In this Court, however, Cripps J rejected any application of the defence of due diligence at common law (State Pollution Control Commission v Australian Iron & Steel Ltd (1992) 74 LGERA 387). On appeal his Honour’s decision was unanimously upheld in Australian Iron & Steel Pty Ltd v Environment Protection Authority [No 2] (1992) 79 LGERA 158 at 170-174. In my opinion, a similar result must follow with respect to the defence of officially induced error of law.

Summary

309 For these reasons I do not accept that the defence of officially induced error of law is a defence available to Unomedical at common law in Australia.

310 However, assuming for present purposes that this conclusion is incorrect, I have nevertheless considered, first, who bears the onus of proof in respect of the defence, and second, whether or not it can be established by Unomedical on the evidence before the Court.

Onus of Proof

311 Unomedical submitted that similar to the defence of honest and reasonable mistake of fact, once a defendant adduces sufficient evidence in support of the defence of officially induced error of law on the balance of probabilities, then it is for the prosecutor to negative the defence beyond reasonable doubt. The EPA rejected this contention, noting that the Canadian position with respect to onus in relation to this defence was that it was for the defendant to establish the elements of the offence on the balance of probabilities (see, for example, Cranbrook Swine at [58]).

312 In my opinion, the defence of officially induced error of law is sufficiently analogous in form and substance to the defence of honest and reasonable mistake of fact that to impose any different evidential and legal onus on the defendant could not be rationally justified. I therefore accept Unomedical’s submission in this regard.

Unomedical Cannot Avail Itself of the Defence on the Evidence

313 In my opinion, the evidence underlying this prosecution renders incapable any reliance by Unomedical upon the defence of officially induced error of law and there is nothing for the EPA to negative. Even if this conclusion is wrong, then I am of the view that the EPA has successfully negatived the defence on the facts as found.

314 This is so notwithstanding that, on balance, I am prepared to accept (contrary to the arguments of the EPA) that Unomedical made an operative error of law and that the advice, if any, to the extent that it came from the council and not the EPA, came from an appropriate official. I make the latter finding conscious of the contrary position put by the EPA. However, the EPA’s position cannot be correct in light of the fact that it was the council that was the regulatory authority under the POEOA in respect of the activities carried out by Unomedical at the facility.

315 In my opinion, Unomedical cannot exculpate itself by recourse to the defence of officially induced error of law because, first, Mr Kolding, and thus Unomedical, was, as he readily conceded, completely ignorant of s 128(2). There could, therefore, be no consideration by Unomedical of the legal consequences of its actions in operating the steriliser and emitting the EtO. That is to say, there could be no consideration of the legal consequences of not implementing such practicable measures as may have been necessary to reduce the emission of the EtO. Although Unomedical submitted that Mr Kolding had considered the use of EtO at the facility more generally within the regulatory framework, as the terms of the first and second development applications, including the Statement of Environmental Effects, evidenced, this was not specific enough.

316 I should add for the sake of completeness that because that I do not accept as reliable the conversation between Mr Kanda and Mr Kolding concerning the NPI 10 tonne threshold, it follows that I do not accept that this was an operative consideration by Mr Kolding of the consequences of Unomedical’s activities in emitting the EtO.

317 Second, and although the council was an appropriate official for the purposes of the defence, the evidence discloses that Unomedical did not consult the council for advice. Unomedical consulted Mr Doig and EES but never the council as to whether it was lawful for it to discharge 99%, or indeed any, of the EtO it utilised in the course of the sterilisation processes into the atmosphere.

318 It is undeniable that, as Unomedical submitted, the council was aware of Unomedical’s use of EtO in the sterilisation process and that it had several opportunities to regulate the emission of EtO by Unomedical. But not only does this presuppose knowledge by the council that EtO was being vented into the air from the stack, a fact which I find the council was not aware of, it misconceives the nature of the consultation.

319 In respect of the first DA to change the use of the premises at Wilmette Place to a medical manufacturing site, it is undeniable that, as Unomedical submitted, the council officers (Mr Nick Sutton and Ms Robina Warburton) assessing the first DA must have been aware of their responsibilities and the council’s obligations under the POEOA when the DA was considered. However, this awareness did not transform the development application into a request for legal advice about the lawfulness of the sterilisation operation.

320 The same may be said of the modification application to the first consent submitted on 13 August 2001. The modifications related only to alterations to the office and factory layout, provisions of a shade structure and new entry to the outdoor recreational area, provision of a new gas tank enclosure, provision of a water storage tank, pump room, sprinkler system and changes to the carpark layout. It was silent in respect of the EtO emissions.

321 A similar conclusion may be drawn in respect of the development application to expand the capacity of the gas bottle enclosure area by BOS in October 2004 (the second DA). While it is accurate to note that the council, in approving the increased storage capacity, stated in a memorandum written by Ms Sarah Winnacotta dated 14 February 2005 that, “there is no evidence to suggest that the quality of the existing environment has been degraded as a result of the existing system…it is unlikely that environment (sic) will experience any change in environmental impacts”, this assessment only concerned the expansion of gas tank storage facilities. Viewed accordingly, the opinions expressed in the memorandum were entirely unsurprising and conventional. The development application disclosed neither the frequency nor the amount of EtO likely to be vented into the air as a consequence of the amplification of the storage capacity.

322 Likewise, the environmental audit performed by Ms Daly for the council in November 2002. Although undertaken for the purpose of, amongst other things, providing information to the persons managing the activity “on compliance with legal requirements” (s 172 of the POEOA), the audit was conducted without the benefit of full disclosure by Unomedical of critical information concerning the use and emission by it of EtO. As a consequence, Unomedical cannot rely on the audit to constitute ‘consultation’ or ‘advice’ for the purpose of the defence.

323 Furthermore, to the extent that the audit required Ms Daly to form an opinion as to whether the business had any air emissions in the form of smoke, dust and other particulates, it is true that Ms Daly indicated that it did not and her summary of the audit disclosed no problems in this regard. But again, at no point was Ms Daly told that EtO was being vented into the air. The presence of the stack was not explicably solely by reference to a discharge point for the EtO (it could have been, as the EPA submitted, an emergency safety valve). Ms Daly’s evidence was that because she was unfamiliar with the processes carried out at the facility and because did not know how the EtO stored at the facility was used, she relied upon what she was told and what she observed in expressing her opinions at the conclusion of the audit. In addition, Ms Daly did not see any visible air emissions, steam or smoke emanating from the facility. This is unremarkable given that the discharged EtO was both colourless and odourless. The evidence of Ms Daly was not challenged in this regard and I accept it.

324 Thus had the council been told of critical details concerning the use and discharge of EtO from the facility, then the absence of any prescribed conditions of consent regulating the EtO emissions may have constituted obtaining advice from the council that it was lawful to operate the facility without the implementation of an abatement system or the installation of other such practicable means to reduce the EtO vented into the air. But at the risk of repetition, neither the fact that EtO was being emitted through the stack into the air nor the amount of EtO being discharged was adequately conveyed to the council. As referred to above, no process diagram demonstrating the steriliser emissions from the stack was ever provided to the council. Indeed, the first DA did not even show that a stack was proposed to be used. The Statement of Environmental Effects accompanying it did not specify that 99% of the EtO used would be discharged from the facility into the atmosphere. Instead it merely stated that “no odours [are] generated or released” during the sterilisation process. In my view, this was wholly inadequate for the purpose of the defence.

325 It was not to the point to submit, as Unomedical did, that the council, as both the regulatory and consent authority, was under an obligation to assess the development applications against the criteria contained in s 79C(1) of the Environmental Planning and Assessment Act 1979 (“the EPAA”). In particular, to assess the applications against s 79C(1)(b) (the “impact of that development”) and (1)(c) of that Act (the “suitability of the site for development”), and to modify through the imposition of appropriate conditions of consent, the air emissions from the facility. The absence of any such conditions of consent does not amount to a legal representation by the council that the activities carried out by Unomedical at the facility were lawful.

326 Equally irrelevant was the submission by Unomedical that a development application was not invalid merely because it was not accompanied by an adequate statement of environmental effects or a site plan. The validity of the development consents granted by the council or their compliance with the EPAA or the Environmental Planning and Assessment Regulation 2000 was not at issue.

327 To the extent that Unomedical placed reliance on the assessment and approval process by Fairfield City Council in January 1998 for the use of an EtO steriliser to be operated by Steritech - which resulted in that council imposing conditions of consent concerning the filtration of the EtO used and emitted during the sterilisation process - I did not find this comparison to be of assistance. Each prosecution turns on its own evidence and facts.

328 Ultimately, what was at issue was the quality of the information given to the council which formed the basis of any purported advice, even by omission, the council is contended to have given Unomedical. Absent full, or event adequate, disclosure of the EtO emissions, the council’s silence cannot be relied upon by Unomedical as advice properly obtained by it as to the lawfulness of its activities at the facility.

329 I accept, as the evidence discloses (see the council document My Development Control Plan – 11 Wilmette Place, Mona Vale dated 29 October 2004), that the council was aware that it had an obligation to assess the impact of any proposed development against the POEOA. I also accept, as the evidence demonstrates (see, for example, the communications to and from Ms Winnacotta of the council), that the council was aware that Unomedical used EtO during the sterilisation operation, and moreover, that EtO was a dangerous chemical. But I do not accept that the council was aware of the extent to which the EtO was not totally consumed during the sterilisation process, was aware of where the excess EtO was being discharged and was aware of what amount. Had the council been appraised this information at the time it grant the approval to Unomedical to operate the steriliser at Wilmette Place, then a more solid foundation for the defence would have been in existence.

330 To the extent that there is a perceived inconsistency with my findings and the result on retrial in Cranbrook Swine, then I must respectfully cavil with the correctness of that case. In my view, however, the facts of Cranbrook can be distinguished on the basis that, unlike here, in that decision the location of the manure tank, namely, on swampland, was presumably plain for the relevant authority to see on the development permit application or when the relevant officer visited the site. That is not the present case.

331 Accordingly, not only was a greater degree of specificity in the consultation by Unomedical of the council necessary, so too a greater specificity in the disclosure of information to the council concerning the EtO emissions from the facility was required in order to enable Unomedical to avail itself of the defence.

332 Third, it follows that to the extent that the omission by the council to comment or to impose conditions of consent limiting the discharge of EtO (even when not specifically asked to do so) constitutes operative advice for the purpose of the defence, in the absence of sufficient disclosure by Unomedical as to the nature and extent of the EtO emissions, I find that any reliance on the advice obtained was not reasonable.

333 Fourth, the advice was not erroneous. It was correct. The council did not know that Unomedical was polluting the air in the manner in which it was. The corollary of this was that to the extent that it gave Unomedical any ‘advice’, this ‘advice’ must have been confined in scope to the facts known to the council at the time. Accordingly, the advice was not wrong because on the information the council had, not only was Unomedical a non scheduled premises with no statutorily prescribed limits on its use of EtO, but there was no reason for the council to impose any conditions of consent requiring an abatement system to be installed in respect of the EtO when the council was not aware that the EtO was being vented to the atmosphere.

334 Fifth, given that evidence discloses that Unomedical was not aware of the duty imposed by s 128(2) of the POEOA, discloses that Unomedical did not seek any advice in respect of the duty imposed by that section and discloses that no such advice was ever given by the council, it logically follows that Unomedical could not have relied on any advice obtained from the council in committing the act of operating the facility without implementing such practicable means as were necessary to minimise its air pollution.

Summary

335 For the reasons given above I find that the defence of officially induced error or law is not available to Unomedical to exculpate its liability.

336 I therefore do not need to consider what the appropriate relief should be had Unomedical successfully demonstrated the application of the defence, namely, a permanent stay of proceedings as ordered in Canada, or an acquittal, as suggested by Unomedical.

Conclusion and Orders

337 Having found the elements of the offence contained in s 128(2) proven beyond reasonable doubt by the EPA and having found that Unomedical has not been successful in establishing any of the defence relied upon by it, I find the defendant guilty of the offence with which it has been charged.

338 The order of the Court is:

(1) stand the proceeding over to the list judge on 22 October 2010 for the purpose of making directions for a hearing on sentence.

**********

CITATION:	Environment Protection Authority v Unomedical Pty Limited (No 3) [2010] NSWLEC 198
PARTIES:	PROSECUTOR Environment Protection Authority DEFENDANT Unomedical Pty Limited
FILE NUMBER(S):	50046 of 2008
CORAM:	Pepper J
KEY ISSUES:	ENVIRONMENTAL OFFENCES :- whether the defendant failed to implement such practicable means as may have been necessary to reduce air pollution resulting from the operation of a medical sterilisation facility - as a result of the sterilisation process ethylene oxide, a carcinogen, was emitted into the atmosphere - no defined statutory standards or limits were imposed on the defendant's discharge of ethylene oxide - the defendant was aware that an abatement system could have been installed that would have significantly reduced the amount of ethylene oxide emitted but considered it unneccesary to install it - whether the installation of an abatement system was necessary when no actual harm proven - use of overseas learning and literature to establish defendant's state of knowledge of available practicable means - defendant found guilty STATUTORY CONSTRUCTION :- meaning of "such practicable means as may be necessary" - meaning of "air pollution" DEFENCES :- whether defence of honest and reasonable mistake of fact established by defendant - held it was not - whether defence of officially induced error of law available at common law in Australia - held it was not - whether, if it was, it had been established on the facts - held it had not
LEGISLATION CITED:	Environmental Planning and Assessment Act 1979 s 79C(1) Evidence Act 1995 s 136 Interpretation Act 1987 ss 9, 33, 45 Protection of the Environment Operations Act 1997 ss 96, 128, 172 Protection of the Environment Operations (Clean Air) Regulation 2002 cl 6C(1) and (2)(c)
CASES CITED:	Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27 Alphapharm Pty Ltd v H Lundbeck A/S (2008) 76 IPR 618 Australian Fisheries Management Authority v Su [2009] FCAFC 56; (2009) 176 FCR 95 Australian Iron & Steel Pty Ltd v Environment Protection Authority [No 2] (1992) 79 LGERA 158 Azzopardi v The Queen [2001] HCA 25; (2001) 205 CLR 50 Ballantyne v WorkCover Authority of New South Wales [2007] NSWCA 239 Bankstown Foundry Pty Ltd v Braistina [1986] HCA 20; (1986) 160 CLR 301 Beckwith v R (1976) 135 CLR 569 Bodney v Bennell [2008] FCAFC 63; (2008) 167 FCR 84 Casa v City of Ryde Council [2009] NSWLEC 212; (2009) 172 LGERA 348 Caterpillar of Australia Pty Ltd v Industrial Court of New South Wales [2009] NSWCA 83; (2009) 255 ALR 131 Chief Commissioner of State Revenue v Qantas Airways Ltd [2009] NSWCA 163; (2009) 74 NSWLR 181 Chugg v Pacific Dunlop Ltd [1990] HCA 41; (1990) 170 CLR 249 CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384 CMT v R [2008] HCA 25; (2008) 236 CLR 440 Dyers v The Queen [2002] HCA 45; (2002) 210 CLR 285 Electricity Commission of NSW v Environment Protection Authority (1992) 28 NSWLR 494 Environment Protection Authority v Brazel [2002] NSWLEC 7; (2002) 119 LGERA 72 Environment Protection Authority v Fletcher [2001] NSWLEC 104; (2001) 114 LGERA 187 Environment Protection Authority v Goulburn Wool Scour Pty Limited [2003] NSWLEC 200 Environment Protection Authority v Milpharma [1994] NSWLEC 189 Environmental Earth Sciences Pty Ltd v Environment Protection Authority [1999] NSWCCA 192; (1999) 103 LGERA 434 GPT RE Ltd v Belmorgan Property Development Pty Ltd [2008] NSWCA 256; (2008) 72 NSWLR 647 Hawkesbury City Council v Johnson; Hawkesbury City Council v Johnson Property Group Pty Limited [2008] NSWLEC 138 He Kaw Teh v R [1985] HCA 43; (1985) 157 CLR 523 Iannella v French (1968) 119 CLR 84 Lane Cove Council v Minister for Urban Affairs and Planning [2005] NSWCA 122; (2005) 140 LGERA 185 Lévis (City) v Tétreault; Lévis (City) v 2629-4470 Québec Inc [2006] 1 SCR 420 Louizos v R [2009] NSWCCA 71; (2009) 194 A Crim R 223 MacRae v Buller District Council [2005] NZHC 378 Mahmood v Western Australia [2008] HCA 1; (2008) 232 CLR 397 Maitland Valley Conservation Authority v Cranbrook Swine Inc (2002) 225 DLR (4th) 455 Martindale v Falkner (1846) 2 CB 706; 135 ER 1124 Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 Morris v Kanssen [1946] AC 459 McLean Bros and Rigg Ltd v Grice [1906] HCA 1; (1906) 4 CLR 835 Morrison v ANL Ltd (1996) 91 LGERA 437 Network Ten Pty Ltd v TCN Channel Nine Pty Ltd [2004] HCA 14; (2004) 218 CLR 273 Northside Developments Pty Ltd v Registrar-General (1990) 170 CLR 146 Ostrowski v Palmer [2004] HCA 30; (2004) 218 CLR 493 Pace Farm Egg Products Pty Ltd v Newcastle City Council [2006] NSWCCA 403; (2006) 151 LGERA 260 Page v Manningham City Council [2010] VSC 267; (2010) 174 LGERA 48 Paice v Hill [2009] NSWCA 156 Palos Verdes Estates Pty Ltd v Carbon (1991) 72 LGRA 414 Pelechowski v Registrar [1999] HCA 19; (1999) 198 CLR 435 PQ v Australian Red Cross Society [1992] 1 VR 19 Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 Proudman v Dayman (1941) 67 CLR 536 R v City of Sault Ste Marie (1978) 85 DLR (3d) 161 R v Dodsworth (1837) 8 Car and P 218; 173 ER 467 R v Fazio (1997) 69 SASR 54 R v Jorgensen [1995] 4 SCR 55 R v Jung [2006] NSWSC 658 R v Karger [2001] SASC 64; (2001) 83 SASR 1 R v Lavender [2005] HCA 37; (2005) 222 CLR 67 SAEED v Minister for Immigration and Citizenship [2010] HCA 23; (2010) 115 ALD 493 Samad v District Court of New South Wales [2002] HCA 24; (2002) 209 CLR 140 Selby v Pennings (1998) 102 LGERA 253 State Pollution Control Commission v Australian Iron & Steel Ltd (1992) 74 LGERA 387 State Rail Authority of New South Wales v Hunter Water Board (1992) 28 NSWLR 721 Street v Luna Park Sydney Pty Ltd [2007] NSWSC 1529 Tesco Supermarkets Ltd v Nattrass [1972] AC 153 Thomas v The King (1937) 59 CLR 279 Tipple v Police [1994] 2 NZLR 362 Valsane Pty Ltd v Environment Protection Authority [1996] NSWLEC 265 Von Lieven v Stewart (1990) 21 NSWLR 52 Wallaby Grip Limited v QBE Insurance (Australia) Limited; Irene Stewart (As Legal Personal Representative of the Estate of the Late Angus Clugston Stewart) v QBE Insurance (Australia) Limited [2010] HCA 9; (2010) 240 CLR 444 Waugh v Kippen [1986] HCA 12; (1986) 160 CLR 156 Williams v The Queen (1978) 140 CLR 591 Wilson v Auckland City Council [2007] NZHC 287 Woods v The Director of Public Prosecutions [2008] WASCA 188; (2008) 38 WAR 217 Workcover Authority of NSW (Inspector Simpson) v CNH Australia Pty Ltd (formerly Case Corporation Pty Ltd) [2006] NSWIRComm 220
TEXTS CITED:	J D Heydon, Cross on Evidence, Vol 1, (1996) Butterworths I Freckelton SC and H Selby, Expert Evidence Law, Practice, Procedure and Advocacy (4th ed), (2009) Lawbook Co
DATES OF HEARING:	29-30 June, 6-10 and 15-16 July 2009
DATE OF JUDGMENT:	12 October 2010
LEGAL REPRESENTATIVES:	PROSECUTOR Mr B Docking SOLICITORS Department of Environment and Climate Change DEFENDANT Mr I Lloyd QC SOLICITORS Henry Davis York