Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi

[2015] NSWLEC 78

Land and Environment Court

New South Wales

Medium Neutral Citation:

Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2015] NSWLEC 78

Hearing dates:

14 August 2014

Date of orders:

15 May 2015

Decision date:

15 May 2015

Jurisdiction:

Class 5

Before:

Sheahan J

Decision:

See orders at [214]

Catchwords:

ENVIRONMENTAL OFFENCES: breach of conditions of Environment Protection Licence – quarry exceeded its prescribed output – failure to report exceedances – totality – double punishment – no actual environmental harm – deliberate disregard of licence conditions – mitigating circumstances – fine – costs – publication order.

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999
Environmental Planning and Assessment Act 1979
Environment Protection and Biodiversity Conservation Act 1999
Protection of the Environment Operations Act 1997
State Environmental Planning Policy (Infrastructure) 2007

Cases Cited:

Australian Competition & Consumer Commission v ABB Transmission & Distribution Ltd (No 2) [2002] FCA 559; 190 ALR 169
Australian Securities and Investments Commission v Adler [2002] NSWSC 483
Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357
Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; 145 LGERA 234
Chief Executive of the Office of Environment and Heritage v Bombala Investments Pty Ltd [2013] NSWLEC 185; 199 LGERA 236
Duffy v R [2009] NSWCCA 304
Environment Protection Authority v Barnes [2006] NSWCCA 246
Environment Protection Authority v MA Roche Group Pty Ltd [2015] NSWLEC 29
Environment Protection Authority v M A Roche Group Pty Ltd [2014] NSWLEC 114
Environment Protection Authority v Centennial Newstan Pty Ltd [2010] NSWLEC 211
Environment Protection Authority v Orica Australia Pty Ltd (The Nitric Acid Air Lift Incident) [2014] NSWLEC 103; 206 LGERA 239
Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water) [2010] NSWLEC 67; 174 LGERA 19
Environment Protection Authority v Transpacific Industries Pty Limited [2010] NSWLEC 85
Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; 148 LGERA 299
Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2014] NSWLEC 68
Johnson v R [2004] HCA 15; 78 ALJR 616
Minister for the Environment and Heritage v Greentree (No 3) [2004] FCA 1317; 136 LGERA 89
Minister for Planning v Coalpac Pty Ltd [2008] NSWLEC 271
Newcastle Port Corporation v MS Magdalene Schiffahrtsgesellschaft MBH; Newcastle Port Corporation v Vazhnenko [2013] NSWLEC 210
Mill v The Queen [1988] HCA 70; 166 CLR 59
Plath v Rawson [2009] NSWLEC 178; 170 LGERA 253
Pearce v The Queen [1998] HCA 57; 194 CLR 610
Siganto v The Queen [1998] HCA 74; 194 CLR 656
R v Olbrich [1999] HCA 54; 199 CLR 270
R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383
Re HIH Insurance Ltd [2002] NSWSC 438

Category:

Sentence

Parties:

Environment Protection Authority (Prosecutor)
Wyanga Holdings Pty Ltd (First Defendant)
Joseph Cauchi (Second Defendant)
Louise Cauchi (Third Defendant)

Representation:

Counsel:

Mr T Howard, SC (Prosecutor)
Mr M Gracie, barrister (Defendants)

Solicitors:

Office of Environment and Heritage (Prosecutor)
Balmain Lawyers (Defendants)

File Number(s):

13/50991, 13/50992, 13/50993, 13/50994, 13/50995, 13/50996, 13/50997, 13/50998, 13/51001, 13/51002, 13/51003 and 14/50003

Judgment

Introduction

1. Joseph Cauchi, his wife Louise, and their family company Wyanga Holdings Pty Ltd (“Wyanga” - which sometimes trades as “Cauchi Civil Contracting”), are each charged with four offences involving their operation of a quarry located at 4003 Pacific Highway, Dirty Creek, Corindi Beach, on the north coast of New South Wales, about 40km north of Coffs Harbour.

2. Each defendant pleaded guilty to three breaches of s 64(1) of the Protection of the Environment Operations Act 1997 (“the POEO Act”), involving three separate charge periods.

3. In addition, after a contested hearing, Craig J found each of the three defendants guilty of a breach of s 66(2) of the POEO Act: Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2014] NSWLEC 68.

4. However, His Honour (a) did not enter any convictions, (b) made no order as to costs, and (c) retained on file an exhibit from the hearing (Exhibit A – a statement of agreed facts on those charges). At the request of the parties, I returned Exhibit A, and will, in this judgment, deal with the question of conviction, and make an order for costs in an amount the parties have agreed, which includes the prosecutor’s costs of the hearing before Craig J.

5. I held a single sentencing hearing on 14 August 2014, concerning all twelve offences, and this judgment determines the penalties to be imposed.

6. That sentencing hearing was conducted:

1. in respect of the s 66 charges, on the basis of agreed facts (in the returned Exhibit A) as found by Craig J; and

2. in respect of the s 64 charges, on a new and comprehensive Statement of Agreed Facts (“SAF” – Exhibit P1).

7. In addition, the defendants’ counsel read and relied upon affidavits sworn by Mr and Mrs Cauchi, on 14 August 2014, and upon some short extracts from an environmental assessment prepared by Hopkins Consultants Pty Ltd (Exhibit D1). Neither Cauchi was required for cross-examination.

8. Much of what follows in the next section of the judgment (to [95] below) is drawn from those sources.

The Offences Charged

Section 64(1) – Breach of Licence Condition

9. Quarrying being a scheduled activity under the POEO Act, Wyanga was required to hold an Environment Protection Licence (“EPL”) under that Act throughout the period on which the charges are based, namely 31 January 2011 to 31 May 2013.

10. Section 64(1) of the POEO Act makes it an offence on the part of the licence holder(s) for “any person” to contravene any condition of the EPL, and prescribes a maximum penalty of $1,000,000 for a corporation and $250,000 for an individual. Daily penalties are also prescribed, but none are sought in the present matters.

11. Section 64(1) includes a “note”, which says that an offence committed by a corporation attracts “special executive liability for a director or other person involved in the management of the corporation”. That note draws attention to s 169, which provides:

169   Liability of directors etc for offences by corporation—offences attracting special executive liability

(1)   If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that:

(a)   (Repealed)

(b)   the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or

(c)   the person, if in such a position, used all due diligence to prevent the contravention by the corporation.

(1A)   For the purposes of this section, each of the following provisions attract special executive liability:

...

(b)   section 64 (1),

(c)   section 66 (2) or (4),

...

(2)   A person may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision.

(3)   Nothing in this section affects any liability imposed on a corporation for an offence committed by the corporation against this Act or the regulations.

...

12. Section 64(2) creates a defence upon which the defendants in these matters do not rely. Likewise they do not rely on the defences identified in sub-ss (b) and (c) of s 169(1).

13. Wyanga’s EPL (No. 1330) permitted the company to carry out quarrying activities, subject to certain conditions. Relevantly, the licence limited the amount of material that could be extracted from the Quarry to 50,000 tonnes per annum (condition A1.2, and, following minor amendment made to the EPL on the 8 January 2013, condition A1.1).

14. That January 2013 condition (A1.1 – Exhibit P1, tab 1, doc 2, fol 6 of 17) provided:

This licence authorises the carrying out of the scheduled activities listed below at the premises specified in A2. The activities are listed according to their scheduled activity classification, fee-based activity classification and the scale of the operation.

Unless otherwise further restricted by a condition of this licence, the scale at which the activity is carried out must not exceed the maximum scale specified in this condition.

Scheduled Activity Extractive Activities Fee Based Activity Land-based extractive activity Scale >30000 – 50000 T extracted, processed or stored

15. The January 2011 version (then condition A1.2 – Exhibit P1, tab 1, doc 1, fols 5 – 6 of 20) provided:

This licence authorises the carrying out of the scheduled activities listed below at the premises specified in A2. The activities are listed according to their scheduled activity classification, fee-based activity classification and the scale of the operation.

Unless otherwise further restricted by a condition of this licence, the scale at which the activity is carried out must not exceed the maximum scale specified in this condition.

Scheduled Activity

Crushing, grinding or separating

Extractive activities

Fee Based Activity

Land-based extractive activity

Scale

>30000 – 50000 T obtained

16. It is alleged that Wyanga breached these conditions in three consecutive licence years, as particularised below.

17. The nine charges under s 64(1), to which pleas of guilty have been entered (three charges against each defendant), may be outlined as follows:

1. In each of matters 2013/50992 (Joseph), 50995 (Louise) and 51001 (Wyanga) of 2013, the amended summonses allege contravention of EPL condition A1.2 by “obtaining” more than 50,000 tonnes of “extractive material, being gravel and/or rock, in a year”, namely the licence year 31 January 2011 to 30 January 2012;

2. In each of matters 2013/50994 (Joseph), 50997 (Louise) and 2014/50003 (Wyanga), the amended summonses allege contravention of EPL condition A1.2 by “obtaining” more than 50,000 tonnes of “extractive material, being gravel and/or rock, in a year”, namely the licence year 31 January 2012 to 30 January 2013;

3. In each of matters 2013/50993 (Joseph), 50998 (Louise) and 51003 (Wyanga), the summonses (including the amended summons in 50998) allege contravention of condition A1.1 by having “extracted, and/or processed, and/or stored” more than 50,000 tonnes of “extractive material, being gravel and/or rock, in a year”, but the charge period is 31 January 2013 to 31 May 2013.

18. As can be seen, the charges in (a) and (b), rely on the terms of condition A1.2 ([15] above), and (c) on condition A1.1 ([14] above).

19. The provable volumes extracted between September 2010 and May 2013 are (cf charge periods in [17] above):

1. 1 February 2011 to 31 January 2012 – 96,597 tonnes;

2. 1 February 2012 to 31 January 2013 – 368,363 tonnes; and

3. 2 February 2013 to 31 May 2013 – 81,512.07 tonnes, which includes, in the month of May 2013 alone, 41,273.11 tonnes.

20. Letters from the defendants’ solicitor to the EPA in March and June 2013 (SAF tabs 4 and 5) attached schedules of monthly tonnages between September/October 2010 and 31 May 2013.

21. The first such letter, dated 28 March 2013 (SAF tab 4), noted that the Pacific Highway upgrade needed “between 300,000 to 400,000 tonnes of material to the year ending 2013”. Louise deposed (par 81) that all the material won and hauled from the quarry in the charge period, except for 18,000 tonnes, was supplied to the Leighton/Fulton Joint Venture, as the major contractor for the RMS.

22. Wyanga continued to extract material, and provide it to the Highway joint venture, in June, July and August 2013, until the EPL was suspended on 27 August 2013.

Section 66(2) – Provision of Misleading Information to EPA

23. The three charges (matters 50991, 50996 and 51002 of 2013) heard by Craig J, on 27 and 28 May, 2014, concerned s 66 of the Act (as noted above ([3]), His Honour found all three defendants guilty).

24. Section 66 provides:

66   Conditions requiring monitoring, certification or provision of information, and related offences

(1)   Monitoring

The conditions of a licence may require:

(a)   monitoring by the holder of the licence of the activity or work authorised, required or controlled by the licence, including with respect to:

(i)   the operation or maintenance of premises or plant, and

(ii)   discharges from premises, and

(iii)   relevant ambient conditions prevailing on or outside premises, and

(iv)   anything required by the conditions of the licence, and

(b)   the provision and maintenance of appropriate measuring and recording devices for the purposes of that monitoring, and

(c)   the analysis, reporting and retention of monitoring data.

(2)   False or misleading information

A holder of a licence who supplies information, or on whose behalf information is supplied, to the appropriate regulatory authority under the conditions of the licence is guilty of an offence if the information is false or misleading in a material respect.

Maximum penalty:

(a)   in the case of a corporation—$1,000,000, or

(b)   in the case of an individual—$250,000.

...

(3)   Certification

The conditions of a licence may require the holder of the licence to supply to the appropriate regulatory authority a statement that is certified by the holder, by another person approved by that authority or by a person prescribed by the regulations, as correct and that states all or any of the following:

(a)   the extent to which the conditions of the licence, or any provisions of the regulations applicable to the activity or work authorised, required or controlled by the licence, have or have not been complied with,

(b)   particulars of any failure to comply with the conditions or any such regulations,

(c)   the reasons for any failure to comply with the conditions or any such regulations,

(d)   any action taken, or to be taken, to prevent any recurrence of that failure or to mitigate the effects of that failure,

(e)   the fee paid or payable in relation to the licence (including the manner of calculation of the fee or other specified aspect of the fee).

(4)   False or misleading certificates

A person who gives a certificate for the purposes of a condition referred to in this section is guilty of an offence if any of the statements certified is false or misleading in a material respect.

Maximum penalty:

•   in the case of a corporation—$250,000, or

•   in the case of an individual—$120,000.

...

25. The defendants’ pleas of not guilty to the s 66 charges were based entirely on their submission that, instead of being charged under s 66(2), the appropriate section under which to charge them was s 66(4). (Note the differences between the maximum penalties prescribed in each case – [24] above).

26. Again, s 169 (see [11] above), imposed executive liability for breaches of s 66. Craig J found that the appropriate sub-section under which to charge them was indeed s 66(2). The human defendants accepted before Craig J that if Wyanga were found to have contravened s 66(2) they would be taken, pursuant to s 169, to have also contravened it.

27. Condition R1.1 of Wyanga’s EPL (Exhibit P1, tab 1, document 2, fol 12 of 17) provided:

The Licensee must complete and supply to the EPA an Annual Return in the approved form comprising:

a) a Statement of Compliance;

b) a Monitoring and Complaints Summary.

...

28. The annual return for the January 2011 – 2012 licence period, supplied “by Wyanga or on its behalf” did not disclose that it had breached condition A1.2 of the EPL (Exhibit P1, tab 1, document 2, fol 6 of 17). As noted by Craig J, at [10] – [11] of his judgment:

10   On 15 April 2012, Louise Cauchi, on behalf of Wyanga, forwarded to the EPA by email Sections A to D of the Annual Return, intending to comply with condition R1.1 of the Licence…

11   Those Sections of the Annual Return, completed on behalf of Wyanga, were in a form provided to it by the prosecutor. Section C of the Annual Return was headed "Statement of Compliance - Licence Conditions". Paragraph C1 of that Section required that a box be ticked in response to the question:

"Were all conditions of the licence complied with (including monitoring and reporting requirements)?"

In response to this question, the box with the word "No" was ticked. There followed from that question in the printed form a requirement that details be supplied "for each non-compliance in the format, or similar format, provided on the following page."

29. That misrepresentation formed the basis of the charges under s 66(2) against Wyanga, and by virtue of s 169, Joseph and Louise. It was alleged that information supplied by Wyanga to the prosecutor, pursuant to the relevant EPL condition, between 15 and 20 April 2012, in respect of the reporting period 31 January 2011 to 30 January 2012, was “misleading in a material respect”.

30. I need not repeat all of what Craig J said in his judgment, but His Honour found that that reporting failure was “misleading in a material respect”, and he rejected the defendants’ construction of s 66, which, His Honour said, would require reading into the section words of qualification neither expressed in it, nor required by its context.

31. His Honour said (at [34]):

... I am satisfied beyond reasonable doubt that in the circumstance in which Section C of the Annual Return was completed, information that was misleading was supplied to the prosecutor in that, having expressly identified those conditions of the Licence with which Wyanga had not complied, the failure to disclose the contravention of condition A1.2 was misleading in a material respect.

The Relevant History

The Cauchis’ business

32. Wyanga was incorporated in August 2003, and, since that date, Joseph and Louise Cauchi have been its only directors and shareholders. Joseph deposes that he is Maltese and poorly educated in the English language. He leads the company's operations, and Louise takes primary responsibility for administrative matters, including dealings with planning authorities. Their sons, Joe's brothers, and other members of their extended family also work in the business (SAF tab 22, p1, par 1).

Relevant Agreements between Wyanga and Third Parties

33. The registered proprietor of the subject quarry site is one Sam Apokis, who has an agreement with Wyanga dated 24 June 2010, granting Wyanga a profit a prendre for five years from 18 June 2010, over the quarry (a 28 page document in Exhibit P1, tab 2), entitling the company to undertake the activities for which it has relevant approvals.

34. The Cauchis have done business with Apokis for “some years”, and Apokis has quarried on the site since the early 1990s without interruption (tab 17, pars 9 – 19). Joseph and Apokis first discussed the subject quarry in May 2009.

35. The defendants’ arrangement with Apokis coincided with an agreement (Tp10) made by Leighton Contractors Pty Ltd and Fulton Hogan Pty Ltd with the then RTA (now RMS) to design and construct an upgrade of the Pacific Highway from Sapphire to Woolgoolga.

36. The quarry began operating in September 2010, and nearly all of the extracted material was supplied to the Leighton/Fulton joint venture on an ongoing basis (only 18000 tonnes was supplied to Coffs Harbour City Council – see [21] above).

Relevant approvals, and dealings with approval authorities

37. The quarry operated pursuant to a development consent granted in 1991. That consent approved the extraction of 17000 m³ of material from the site, a copy of the notice of determination of the DA (DA91/46) was attached to a letter sent by the defendants’ solicitor to the EPA on the 13 September 2010, (Exhibit P1, tab 2), (wrongly referred to in the letter as a copy of the minutes of the council meeting approving the application). The parties agreed, and the hearing proceeded on the basis, that the extraction limit of 17000 m³ can be treated as an extraction limit of 50,000 tonnes (Tp12, L46). It was this consent which provided the basis for imposition of the extraction limit in Wyanga’s EPL.

37. Louise Cauchi deposes (par 3) that, from about 13 August 2009, she became somewhat confused by the various advices she received concerning this consent, and that Council wrote to her saying they were “unable to determine if there is a valid development consent for an extractive industry on this site”. She was told that some papers were lost when Ulmarra Shire Council merged with Coffs Harbour City Council, and information obtained by Apokis, indicated a consent for 50,000 tonnes per annum increasing at a rate of 10% (tab 1). It was Louise’s belief (par 15) that “she could rely upon the existence of a development approval for 50,000 tonnes, increasing at 10% per annum from 1995”.

38. Joseph and Louise decided in July 2010 to make a development application (“DA”), and instructed their solicitor, Warren Wells, of Balmain Lawyers, to apply to the Director-General for directions. Wells also applied, on 21 September 2010, for an EPL (Louise tabs 2 and 3), but the Cauchis were distracted for some time towards the end of 2010 defending proceedings in the Supreme Court dating from 2003 (par 16): “To say the least our involvement with this was stressful, time consuming and quite depressing. It was also very distractive to our duties as directors of Cauchi Civil in relation to ongoing quarry operations, including that at Corindi”.

39. Around 2011, the Cauchis and Wells explored extending the quarry onto adjacent Crown Land, and, accordingly, suspended work on the DA. (The Supreme Court proceedings ultimately went on appeal and an application for leave to appeal to the High Court was refused in February 2014, leaving the Cauchis successful (Louise par 16)).

40. Wyanga’s September 2010 EPL application sought an annual extraction quantity limit of 150,000 tonnes per annum. The EPA conveyed to Wyanga that the then existing development consent issued by the former Ulmarra Shire Council set a maximum extraction limit of 50,000 tonnes per annum, and that an EPL for an expanded quarry operation could not be issued until planning approval, authorising an increased extraction limit, had been obtained. The advice from the EPA (SAF tab 8) made clear that if, in the meantime, the quarry operator decided to extract material at a rate equal to or greater “than 30,000 tonnes per annum (but not more than 50,000 tonnes per annum)”, an EPL would need to be obtained in line with the then current development approval.

41. A preliminary environmental assessment which accompanied that EPL application, dated 18 August 2010 and prepared by Balmain Lawyers (SAF tab 2) addressed the need for environmental management measures to reduce the adverse impact upon the environment and the community generally (see page 25 of 41).

42. In lodging that EPL application Wells noted (SAF tab 3) that the paperwork the EPA had on hand would be sufficient for the 50,000 tonne limit, and foreshadowed an application to vary the licence once the company obtained development approval for a greater tonnage.

43. On 29 November 2010, Wyanga submitted (SAF tab 3) an application for an EPL proposing an annual extraction limit of 30,000 – 50,000 tonnes, and an EPL in those terms was issued on 30 January 2011, taking effect from 31 January 2011 (SAF tab 1 – see condition A1.2 at [15] above, which was later amended on 8 January 2013 (see [13] – [14] above)).

44. It is common ground that the EPL was current at the date of all the offences now before the Court.

45. As is customary, the licence specified the “scheduled activity” it concerned, the reporting conditions, and the forms for both the statement of compliance, and of the monitoring and complaints summary, it required. Those two documents comprise the annual return, to be lodged in the prescribed form before the end of each reporting period, namely 12 months after the issue of licence, and at the end of each subsequent period of 12 months.

46. From 31 January 2011 to 27 August 2013, Wyanga undertook at the quarry the following activities (SAF par 9):

1. extraction of quarry materials, such as gravel and rock;

2. the stockpiling of those materials on site; and

3. the sale and transport of those materials from the quarry to customers including the Leighton/Fulton Pacific Highway Joint Venture and Coffs Harbour City Council.

48. During an inspection by the EPA on 13 April 2011, Wells told the EPA representative that “Wyanga was well down the path of having a [DA] and [EIS] for an expanded rate of extraction at the quarry finalised and submitted to the council and the department” (report at SAF tab 9).

49. However, no application for approval under the Environmental Planning and Assessment Act 1979 (“the EPA Act”) was lodged by Wyanga in either 2011 or 2012. Joseph and Louise thought that the quarry was allowed to produce 50,000 tonnes p.a., increased annually by 10%, and that that should prove adequate until they obtained their new consent.

50. Joseph deposes (pars 14 – 18) that Cauchi Civil had begun supplying material to the upgrade works in September/October 2010, but the first blast at the quarry took place on 24 May 2011 (par 22), and only small amounts were supplied until around November 2011 when the material that was then being used by the Joint Venture proved inadequate for their purposes (Louise pars 22 -23). Consequently, Leighton/Fulton began sourcing material from the Corindi quarry – which was only 8 km north of the northern end of the Highway upgrade – usually requiring large amounts on a quite “urgent” basis.

51. In about May 2012, on accountancy advice, Cauchi Civil separated its trucking business from its quarry business and Rixa Quarries Pty Ltd was incorporated (“Rixa”). Sam agreed to Rixa taking over the operation of the Corindi quarry but it did not formally occur until very recently (Louise par 34). Sam wanted to expand the quarry over an area of his property that was to be resumed by the RTA. Louise deposes (par 35) that “all this threw the [DA] into chaos, because the original [DA] was to operate the quarry out of the same footprint, as was currently being operated before Cauchi Civil started to operate it”.

52. A further inspection by the EPA was carried out on 30 October 2012.

53. At that inspection, Joseph Cauchi told the officers that Wyanga was “in the process of preparing an EIS so that it could apply for approval to increase its annual extraction limit to 300,000 tonnes” (inspection report at SAF tab 10).

54. The inspection report indicates that Joseph Cauchi had never read the EPL, that no copy of it was kept on site, and that it was never discussed with employees. He was cautioned by the EPA to discuss the EPL with his employees, and make them aware of their responsibilities (tab 10, p2). The EPA gained the impression that Wyanga had been exceeding the annual tonnage limit, and sought an update on the DA/EIS process (p3).

55. The EPA then wrote formally to Wyanga on 19 November 2012 (SAF tab 11), seeking a copy of Wyanga’s loader records, dockets “or any other accurate record of volume of material (extracted processed and stored) for the period 01/11/2011 to 31/10/12 inclusive, within 30 days”. The letter (at p2 of 3) went on to say:

The EPA notes your advice that plans are in place to increase the scale of extraction to approximately 300,000 tonnes per annum. The EPA became aware of this proposal in September 2010 when it was requested to advise the NSW Department of Planning of its requirements for an [EIS] for expansion of Corindi Quarry. The EPA also sent correspondence to Balmain Lawyers dated 30 September 2010. The EPA has not received any further information regarding this matter since September 2010.

At the inspection you mentioned that flora, fauna and cultural assessments had been carried out for the proposal. Recent enquiries made by the EPA to Coffs Harbour City Council and the NSW Department of Planning revealed that they had no information in relation to a new application for development consent or an application to modify the existing development consent to allow for an increase in extraction at Corindi Quarry.

56. On 18 December 2012, Wells replied (SAF tab 12) to the 19 November letter, on behalf of Rixa. He undertook to obtain for the EPA a copy of the loader records “which will provide to you an accurate record of extracted materials processed and hauled from the site”.

57. On 2 January 2013, the EPA received a new EPL application from Rixa for an annual extraction limit of 500,000 tonnes (SAF tab 13, and Louise tab 5). The accompanying letter from Wells, dated 21 December 2012, disclosed difficulties another Cauchi company had had with a quarry in southern NSW.

58. That Corindi application was incomplete, and the EPA returned it, together with the applicant’s payment of $15,255, on 9 January 2013. In its letter (SAF tab 14), the EPA noted the development consent of 1991 for 17,000 m³ p.a., and correspondence from Ulmarra Shire Council dated 11 October 1993, confirming registration of the quarry and limiting future extraction to 40,000 m³ (approximately 68,000 tonnes). It went on to note that the Preliminary Environmental Assessment, dated 18 August 2010, indicated that the original consent had been varied on 18 December 1992 to provide an extraction limit of 50,000 tonnes with a yearly increase of 10% on previous years, but the EPA sought documentation verifying a current consent for the scale sought in the licence application. The letter concluded (tab 14, p2):

Until the EPA receives a complete application for a new EPL providing evidence of development consent for the activity (volumes) applied for, the current EPL will remain in force, ie ≤ 50,000 tonnes of material extracted, processed or stored per annum. Volumes over the last two years for Corindi Quarry provided by Balmain Lawyers in their correspondence dated (18 December 2012 [see [56] above) far exceed the current licence limit and as a result, the EPA must now consider appropriate regulatory action for this apparent unlicensed extraction.

59. Following this rejection, Wyanga’s EPL was varied on 8 January 2013. (A copy of the notice of variation was before me at Exhibit P1, tab 14). There was a slight change in the numbering of the conditions – Condition A.1.2 which dealt with extraction limits became A.1.1. ([13] – [15] above), and while there was a slight change to the wording of the condition, it made no material change to the extraction limit.

60. Louise and Wells had a meeting with officers of the EPA on 26 March 2013 (minutes at SAF tab 15). Again, officers sought from Wells evidence to confirm the validity of the consent relied upon. Wells was “certain” (p2) that development consent was issued in 1995, in response to the registration of the quarry in 1993 under SEPP 37, but would investigate the matter further. Environmental assessment was proceeding on the basis of a demand from the Highway venture for up to 490,000 tonnes.

61. The EPA noted (p2) that, as the planning process was “likely to take some time”, and sought “the licensees’ intention to keep within the licence limit until such time as appropriate development consent [was] granted”. Wells was confident that a cabinet minister had “offered to assist ... in speeding up the approval process” (SAF tab 15). The EPA advised them that they would issue a notice requiring detailed records of volumes of material extracted from the Quarry (tab 15, p3).

62. Detailed records were then provided to the EPA by Wells on 28 March 2013 (SAF tab 4 – [21] above). These records showed that the following amounts had been extracted, far exceeding the 50,000 tonne limit (SAF, par 28):

between February 2011 and January 2012 - 96,597 tonnes; and

between February 2012 and January 2013 – 368,363 tonnes.

63. A “Show Cause” Notice was issued to Wyanga on 5 April 2013 (SAF tab 16), inviting Wyanga to “show cause” why the EPA should not take regulatory action in respect of the exceedances.

64. Wyanga responded on 8 May 2013 (SAF tab 17), providing the following information regarding the Cauchi family business (par 1):

Cauchi Civil is a family company. Joe is the operations manager and works day to day, mostly 14 hours a day, mostly every day of the week in managing the day to day operations of the works undertaken by Cauchi Civil. Louise, Joe’s wife, looks after the administration of the business, which includes dealing with human resources, accounts, paying bills, preparing invoices and collecting and collating material to do so, costings, licences, registration of vehicles, arranging of insurance, generally all of those bits and pieces that have to be done to create a proper paper trail to manage the business. Luke and Joshua, Joe and Louise’s sons, both work in the business, one as a supervisor and one as a plant operator. Josh’s partner Elle, also assists in the administration of the business. Joe’s brothers John and Tony both work in the business, John as a driver and Tony as a plant operator and supervisor.

65. The letter went on (pars 31 – 45) to detail the steps taken by “Cauchi Civil” to deal with the issue of development approval, and noted (in par 45) that it had on hand at that time “over 572 pages of consultants’ reports in support of the increased extraction rate of the quarry”.

66. Meanwhile, the EPA investigation of the quarry operation continued (see, e.g., SAF tabs 18, 23, and 26).

67. A DA was lodged, with Coffs Harbour City Council by Rixa, for 490,000 tonnes on 27 June 2013, and rejected on 12 July 2013, due to insufficient information (see SAF tab 20). When the EPA learned about that, it served a notice of intention to suspend the EPL, requiring a response by 15 August 2013 (SAF tab 21). Wyanga responded on 22 August 2013 (SAF tab 22).

68. The EPL was suspended on 27 August 2013 (SAF tab 24). Louise made a further submission, and the EPA confirmed the suspension (SAF tab 25). The quarry ceased operating, pending reinstatement of the licence (Louise par 69).

69. In late August, Leighton/Fulton told Joseph (his par 27) and Louise (her par 50) about “Regulation 94”, and Louise (par 51) instructed Wells to get advice. On 9 September 2013 (SAF par 48), Wells wrote to the EPA bringing to its notice cl 94 of State Environmental Planning Policy (Infrastructure) 2007 (“the SEPP”), and contending, fortified by senior counsel’s advice, that it applied to the subject quarry, so that a development consent was not required for its lawful operation.

70. Also, on 9 September 2013, Wells provided the EPA with an application to increase the annual extraction rate. On 12 September, the EPA rejected both that application, and the defendants’ cl 94 proposition.

71. On 27 September 2013 (SAF par 54), a new DA was lodged with Coffs Harbour City Council, seeking approval to increase the rate to 490,000 tonnes. On the same day, Wyanga delivered to the EPA a copy of the EIS, together with appendices and environmental reports, submitted in support of that DA.

72. Wyanga ceased providing information and/or records to the EPA, pursuant to notices issued to it under the POEO Act in respect of the EPA’s investigation, and did not allow its directors to be interviewed (SAF tabs 31 – 34, and pars 40, 64, and 65, c.f. tab 28).

73. On 5 November 2013 (Louise tab 11) the EPA again rejected (a) Wells’s submissions regarding the alleged exemption afforded to the Corindi quarry by cl 94 of the SEPP, and (b) the EPL variation they had sought.

74. On 8 November 2013, Wyanga commenced proceedings in this Court against the EPA, relying on cl 94 (SAF par 63), but they were dismissed, on Wyanga’s application, on 27 November 2013 (SAF par 44 and Louise tab 12), “due to differences had amongst the legal team, working for Wyanga Holdings” (Joseph par 36, and Louise par 63).

75. These twelve prosecutions were commenced on 17 December 2013.

76. The EPA, in late December 2013, raised the issue of reinstating the EPL by and from 31 January 2014 (Louise par 65).

77. The Leighton/Fulton Pacific Highway project also finished “in around December 2013” (Louise par 69).

78. The EPA required improved sedimentation arrangements, and, when they were put in place, it reinstated the quarry’s EPL, to operate from 31 January 2014, for a maximum of 50,000 tonnes p.a. (Louise par 66).

79. The September 2013 DA was still pending at the time of the sentencing hearing, but the EIS had to be redrafted to accommodate an increase in the footprint of the quarry. The documentation is being finalised, and a decision on the DA is awaited (Louise par 67 and 68).

80. Those parts of the EIS which are before the Court (in Exhibit D1) note the following:

1. The property has low ecological values, and is entirely unsuitable for agricultural use or any other rural use, because of topography and unsustainable soil structure.

2. The quarry has successfully operated for over 25 years, in accordance with best practice guidelines, and it is estimated that, with additional resource situated within the site, but to the south, it should yield a further 3 million tonnes of gravel (approximately 12 – 15 years supply, to about 2025).

3. The future Pacific Highway alignment has been identified, and will traverse the centre of the Apokis property immediately south of the quarry. There is a potential further supply of extracted materials to the south of the proposed Highway alignment. Proximity to the existing and proposed routes of the Highway makes the site very beneficially placed to save delivery and construction costs, and deliver direct economic benefits to the local community, including by way of employment.

4. While there is some contention as to the prevailing development approval, the quarry was operated under existing use rights then was granted formal development consent in 1991. As a consequence of the application of SEPP 37, another approval was issued in 1995 by Ulmarra Shire Council, and the quarry continues to operate today. The new DA has been made to remove “any contention as to the prevailing development approval”, and to deal with the rehabilitation of the site, which will be facilitated by the continued active working of it.

5. An extraction rate of 490,000 tonnes per annum is proposed, with an associated “tug mill” processing up to 200,000 tonnes per annum to be operated on site. Following the completion of the upgrade of the Highway (requiring up to 490,000 tonnes per annum), the quarry is expected to operate at an average rate of 200,000 tonnes per annum;

6. Also on site is a concrete batching plant producing up to 150,000 tonnes per annum, up from an existing approval for 15,000 tonnes per annum.

7. “Specialist studies have determined that subject to recommended site management practices and environmental monitoring, the quarry’s expansion will have no detrimental impact on the physical or social environment” (see also s 7.1 in Exhibit D1). The recommended operational strategies proposed in the studies and assessments undertaken will enable “potential environmental harm” to be avoided.

8. There are environmental benefits in the recycling of concrete and other waste material from upgrade construction – these materials are brought to the site, crushed and blended with road making materials.

The Respective Involvement of the Cauchis in Wyanga’s conduct

81. Wyanga was incorporated in August 2003, and has been essentially a family business (see [32] and [64] above).

Louise Cauchi’s evidence

82. Louise had primary responsibility for the administrative requirements of Wyanga’s business, including accounts, preparation of invoices, etc. She deposed (par 78) to “receiving all of the paperwork in respect of Cauchi Civil’s operations and administration”.

83. Louise takes full responsibility for what appears in the annual returns. She deposes (par 29) to having some difficulty interpreting the return form. She did not appreciate at the time of the s 66 charge that (par 31) “at the quarry we had won and hauled more than 50,000 tonnes of material” in the 2011 – 2012 reporting period.

84. She made “a mistake”, and says she is “very sorry” (par 71). In paragraphs 32 and 71, she apologies sincerely to the Court: “I should have gone back to my records and been much more careful in completing the return” (par 32), and “with the benefit of hindsight I took on much too much in the business, and I simply made mistakes, trying to do my best” (par 71). She gives this (and other evidence) by way of explanation rather than excuse (pars 72 and 75). (See also par 83).

82. Louise deposes (pars 74 – 75) that the defendants were, as it were, caught off guard, when Leighton/Fulton suddenly needed great amounts of material urgently, and the need to supply overwhelmed the DA process, and she was not anticipating the complications that confronted Wyanga in obtaining development consent to extract more than 50,000 tonnes of material.

83. In four years, Louise is aware of only one complaint about it from a neighbour (par 78), and that was “on the day of the first blast”. There have been no complaints from the neighbours regarding the operation of the quarry, nor from the Coffs Harbour City Council or the EPA, “other than for some minor matters about the management of stormwater and the size of a sediment pond”. There was also a “minor discussion” with the Council about some damage done by trucks using a side road (for safety reasons) and Cauchi Civil fixed the problem (pars 79 and 80).

84. Louise deposes (par 82):

There is no prospect that Cauchi Civil will repeat it breach (sic) of the licence, as it is the intention of Joe and me to progress the [DA] to a development approval over the next few months so that the current EPA licence can be amended to increase the scale of operation to that necessary. There is presently little or no work for the quarry. The upgrade works from Sapphire to Woolgoolga for which the materials were supplied from the quarry have now been completed.

88. She provided (par 83) the following summary explanation for Wyanga’s conduct:

I again explain that I made a mistake in the way in which I completed the annual return. Cauchi Civil did operate the quarry in excess of the scale allowed in the EPA licence, however Joe and I thought that the development approval in the first place would come before Cauchi Civil needed to extract material to the scale that it did, and when the Reg 94 matter arose, we simply thought the EPA had made an error in not granting Cauchi Civil the licence to operate the quarry when it first applied for it in September 2010.

Joseph Cauchi’s evidence

89. Joseph deposes (pars 7 and 9) that while he looked after the operations side of the business, Louise took care of the administration. In the DA process she worked with their solicitor on their behalf.

90. Joseph says (pars 15, 17 and 19) that when the Joint Venture started ordering large quantities of material on short notice, he had to “ramp the business up quick and lively”, and “was running around trying to keep up with their orders, and trying to second guess how much they would want and when”. He “got on with the job of trying to keep up with the orders, and left everything else to Louise” (par 19).

91. Based on discussions he had with Apokis, Louise and their solicitor, he thought that the existing consent approved the removal of 50,000 tonnes, which had increased 10% each year since the mid 90’s, and that this approval was sufficient to permit the amount of material extracted by Wyanga. He was under the impression that everything was progressing well with the DA process, and that a new DA would be in place before Wyanga would need to exceed the limits prescribed by the original consent (pars 20 -21).

92. Joseph deposes (par 22) to now realising that the EPL had a strict maximum of 50,000 tonnes throughout the relevant time. He also concedes (par 23) that Cauchi Civil took out “much more than 50,000 tonnes annually”, but he realised (par 24) that his company was in some trouble about the quarry when Louise showed him “some paperwork from the EPA about suspending the licence ...”.

93. Joseph (par 37) takes “full responsibility for what happened”, and admits that his company, his wife and he himself all “did the wrong thing”.

94. He apologises (par 38) “sincerely to the Court for operating the quarry outside of the amount of material that is in the EPA licence”.

95. The operation of the quarry has become a “nightmare”, and has forced them into serious financial difficulties (pars 39 and 40), and he says (par 41):

I thought that we would be right with our paperwork and this is only my explanation, not my excuse for what we did. We were wrong in what we did and I take full responsibility for it.

Consideration

Totality and Double Punishment

96. As these matters involve related parties and multiple offences, issues of totality and double punishment arise.

97. Sackville J discussed these two principles in Minister for the Environment and Heritage v Greentree (No 3) [2004] FCA 1317; 136 LGERA 89, to which I was referred by the parties, His Honour said at [77] – [79]:

77  Seventhly, it is appropriate to take into account both the fact that Auen is, in effect, a “one-man” company and the relationship between Auen and Mr Greentree. The evidence indicates that Mr Greentree is the sole director and, in effect, the sole shareholder of Auen. (Prime Grain Pty Ltd is a shareholder of Auen, but Mr Greentree holds all shares in Prime Grain Pty Ltd.) While Auen has the capacity to pay a substantial penalty, its position is not the same as, for example, a very large publicly listed corporation to which a pecuniary penalty of some hundreds of thousands of dollars might be of relatively small financial moment.

78  I infer that Mr Greentree will bear the burden of any diminution of Auen's assets that will result from the imposition of a pecuniary penalty on the company. It is appropriate to take that fact into account in order to prevent Mr Greentree being punished, in effect, twice over: Australian Competition & Consumer Commission v ABB Transmission & Distribution Ltd (No 2) [[2002] FCA 559]; 190 ALR 169 at 182 [45], per Finkelstein J; Re HIH Insurance Ltd [[2002] NSWSC 483]; 42 ACSR 80 at [131]-[132], per Santow J. On the other hand, Auen has been involved in a deliberate contravention of s 16(1) of the [Environment Protection and Biodiversity Conservation Act 1999 (‘EPBC Act’)]. The contravening conduct was undertaken in Auen's commercial interests. It is also necessary to bear in mind that the maximum penalties that can be imposed on a corporation are ten times larger than the penalties that can be imposed on individuals who contravene the EPBC Act. The overall pecuniary penalty should obviously be no less than if Auen, a corporation, had been the sole contravenor. On the contrary, the overall penalty should reflect the fact that Mr Greentree, as well as Auen, has contravened s 16(1) of the EPBC Act.

79  Finally, as is implicit in what I have already said, when a Court is imposing penalties for more than one offence, particularly when essentially the same conduct constitutes separate offences, the Court should ensure that the penalties imposed in aggregate are just and appropriate: Mill v The Queen [[1988] HCA 70]; 166 CLR 59 at 62-63, per curiam; Pearce v The Queen [(“Pearce”) [1998] HCA 57]; 194 CLR 610 at 623-624, per McHugh, Hayne and Callinan JJ. As Santow J pointed out in ASIC v Adler [[2002] NSWSC 483] at [128]-[130], the reasoning in criminal sentencing cases cannot be applied precisely to civil penalty cases, since the Court cannot replicate cumulation or concurrence in sentencing. Nonetheless, it is important to consider the totality of the penalties imposed to ensure that they fairly reflect the statutory criteria and do not result in unfairness.

98. The importance of having regard to the totality principle where a defendant is being sentenced for offences which involve “common elements” was endorsed by the High Court in Johnson v R [2004] HCA 15; 78 ALJR 616, at [33]. The joint judgment of Gummow, Callinan and Heydon JJ recited (at [27]) the following passage from Pearce (per McHugh, Hayne and Callinan JJ at [33]), in support of the need to consider the totality of the conduct in sentencing a defendant for related offences:

To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.

99. In his written submissions, Mr Howard for the EPA suggested some ways in which I might apportion the penalties among the defendants, so as to avoid double punishment (pars 52 – 54), but he conceded at the hearing that “I probably should not have done so” and that (Tp25, L7 – 10):

I think the better approach for me to take is simply to say that your Honour can apportion the penalties between the defendants as tour Honour sees fit ..., bearing in mind the need to ensure that there is no double or triple punishment.

100. Some downward adjustment in the penalty to be imposed on each defendant for the s 64 offences is appropriate in these circumstances, pursuant to the totality principle, because the offences arise out of a single course of conduct, namely the continued extraction of material beyond that permitted in the EPL.

101. On the other hand, the prosecutor submitted, and I accept, that the s 66 offences arise out of different (though related) conduct, and, accordingly, do not attract the operation of the principle.

102. It follows, that I should first address the appropriate penalty to be imposed against each defendant, for the s 64 offences, and make a downward adjustment in the overall penalties imposed for them, to appropriately reflect the criminality of the conduct. I will then separately determine the penalties to be imposed for the s 66 offences.

General sentencing principles

103. Determining the appropriate sentence to be imposed for environmental offences requires the Court to embark on a process of “instinctive synthesis”, weighing up all the relevant objective, and subjective circumstances to reach a just and appropriate penalty.

104. Section 241(1) of the POEO Act, the Act under which all these charges are brought, provides that the Court must take into account the following matters in the determination of an appropriate sentence for an offence committed under the Act:

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

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

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

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

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

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

105. The relevant principles to apply have been clearly established by many cases, and need not be repeated here – I discussed them in great detail in Newcastle Port Corporation v MS Magdalene Schiffahrtsgesellschaft MBH; Newcastle Port Corporation v Vazhnenko (“Magdalene”) [2013] NSWLEC 210.

106. The “instinctive synthesis” is a two stage process.

107. First, the objective circumstances of the offence must be examined, and its “objective seriousness” determined. In the present case, the objective matters of relevance are as follows:

1. the maximum penalties;

2. the absence of any actual environmental harm having resulted;

3. the foreseeability of potential harm arising from the offences;

4. the high degree of the defendants’ control over the circumstances giving rise to the offences;

5. the deliberateness of the conduct;

6. the extent to which the offences undermined the statutory regime; and, possibly,

7. the “breach of public trust” associated with contraventions of EPLs – but the prosecutor here resiled from this as a factor (oral submissions, at Tp23, LL14 – 19).

108. The second stage of the process requires that, once the objective seriousness of the offence is determined, setting the “range” of appropriate penalties, the Court considers any subjective circumstances, unique to each defendant, which should be taken into account. Sections 21A(2) and (3) of the Crimes (Sentencing Procedure) Act 1999 (“CSP Act”), prescribe lists of aggravating and mitigating factors which must be taken into account.

109. The purposes of sentencing (s 3A of the CSP Act), and the objectives of the statutory regime under which the offences are committed (s 3 of the POEO Act), must also be considered in the determination of an appropriate penalty.

The Section 64 Offences – Breach of Licence Conditions

110. I turn first to consider the objective factors of these offences:

Environmental Harm

111. It was conceded by the prosecutor (par 25) that there was no actual environmental harm caused by the exceedances of the extraction limit in any of the three licence periods, nor was there any likelihood of such harm occurring.

112. However, it was submitted (par 27) that there is always a potential for environmental harm to occur when EPL conditions are breached. It is to be assumed that such conditions are imposed for a reason.

113. In this case, the 50,000 tonne limit under the EPL was based on a DA granted consent under the EPA Act (see [37] above). This limit is reflected in the EPL, because it can be inferred (par 28) that such a limit was imposed in the DA, following environmental assessment pursuant to the EPA Act, and the view being formed that extraction over that limit would be harmful to the environment, or that there has simply been no assessment of the impact of extraction over that limit.

114. It follows that extraction over the imposed limits will have an unacceptable environmental impact, or its impact having not been assessed at all, creates a potential risk of harm, which must be taken into account in the determination of the objective seriousness of the offence: Environment Protection Authority v Waste Recycling and Processing Corporation (“Waste Recycling”) [2006] NSWLEC 419; 148 LGERA 299, at [145].

115. The defendants took issue with the prosecutor’s submission that the exceedances created a “potential for environmental harm to occur” for a number of reasons which they argued before me orally (Tp29, L10 – p30, L12).

116. Firstly, it was said that arguing that there is a “potential for environmental harm to occur” conflicts with the prosecutor’s concession that no harm was likely to flow from the exceedances (Tp29, LL10 – 22).

117. Secondly, it was submitted that it is inconsistent with the environmental assessment undertaken by Hopkins Consultants, dated September 2013 (Exhibit D1), which stated “The quarry’s record for extraction and crushing of gravel in conjunction with reports and data prepared by specialist consultants indicate that the expansion would not have any major environmental impacts” (Tp29, LL23 – 24).

118. Thirdly, it was put to me that the prosecutor has not discharged its burden to prove beyond reasonable doubt that there was a potential for harm to be caused by the exceedances: Duffy v R [2009] NSWCCA 304, per Fullerton J at [21].

119. As I discussed in Magdalene, at [120] – [121], the concept of “harm” in the determination of penalties for environmental offences has been defined broadly. Preston ChJ said in Waste Recycling, at [145] – [149]:

145 Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account: Axer Pty Ltd v [Environment] Protection Authority (1993) 113 LGERA 357 at 366 and Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; 145 LGERA 234 (6 February 2006) at [175]. Harm should not be limited to measurable harm such as actual harm to human health. It can also include a broader notion of the quality of life.

146 Harm can include harm to the environment and its ecology. Harm to an animal or plant not only adversely affects that animal or plant, it also affects other biota that have ecological relationships to that animal or plant: Bentley v BGP Properties Pty Ltd at [174] .

147 Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernable direct harm to human interest, should also be treated seriously.

148 The culpability of the defendant depends in part on the seriousness of the environmental harm. Sentencing courts have exercised their discretion in relation to penalty on the principle that the more serious the lasting environmental harm involved, the more serious the offence and, ordinarily, the higher the penalty: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority at 701; 39. If the harm is substantial, this objective circumstance is an aggravating factor: s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999 NSW.

149 The fact that the environment harmed by the offender's conduct was already disturbed or modified is not a mitigating factor…

120. In Environment Protection Authority v M A Roche Group Pty Ltd (“MA Roche No 1”) [2014] NSWLEC 114, in which I sentenced a quarry operator for exceeding extraction limits in its EPL, I made the following comments on environmental harm (at [19] – [20]):

19   In the present case the alleged harm has two elements – one is the risk that such an exceedance of the approved limit, whether by 60,000 or 220,000 tonnes, at least potentially creates additional pressure on dust, water and noise factors, and the other is that disobedience of the licence fundamentally undermines the regulatory scheme for potential environmental damage from industrial activity.

20   One can not be dogmatic about the first element, in the absence of a proper environmental study such as should emerge from the current EIS/DA process, but one can certainly be dogmatic that flouting the licence definitely causes harm of the second kind

121. Craig J made similar comments in Environment Protection Authority v MA Roche Group Pty Ltd (“MA Roche No 2”) [2015] NSWLEC 29, stating (at [23]):

There is no evidence that this offence caused any actual harm to the environment. However, that is not the end of the matter. There was certainly the risk of harm occasioned by an output from the quarry that more than doubled the limit imposed both by the Development Consent and by the condition of the EPL. That risk or potential arises from the possibility of increased levels of dust, noise and impact upon existing water management facilities. There is undoubtedly harm occasioned by the undermining of the regulatory scheme imposed by the POEO Act as well as the lost opportunity for prior environmental assessment before production from the quarry was increased to the level that, in fact, occurred (Minister for Planning v Coalpac Pty Ltd [2008] NSWLEC 271 at [37]).

122. The prosecutor said (Tp20, L42 – p21, L4):

It’s not suggested by me for the prosecutor your Honour that there’s any identifiable environmental harm that was likely to have been caused either. The only kind of harm that we have here is the kind of harm that your Honour identified in a recent, relevant comparable decision of MA Roche. That’s a good segue if your Honour pleases, I was going to hand to--

HIS HONOUR: Subjugation of the system.

HOWARD: Yes, indeed and in the case of this kind of subjugation of the system, although there’s no identifiable actual harm, although there’s no identifiable likely harm, there’s at a higher level of generality there’s a potential for environmental harm where you go beyond an assessment. Where a rate of extraction hasn’t been assessed.

123. I agree with the prosecutor that the exceedances across the respective licence periods carried with them a “potential” or “risk” of harm to the environment. The defendants are incorrect when they submit that the prosecutor’s concession that it was unlikely that harm would have occurred as a result of the exceedances, conflicts with the submission that they had a potential to give rise to harm. Although harm may be unlikely, there remains “potential” for it to ensue.

123. Nor does the extract from the EIS (Exhibit D1) detract from the prosecutor’s assertion of potential environmental harm arising from the conduct. The EIS made the point (par 7.1) that:

Potential environmental harm can be avoided through implementation of the recommended operational strategies proposed in the environmental studies and assessments undertaken. Consultation has been undertaken to ensure that all relevant issues have been identified and appropriately addressed throughout this EIS.

125. “Recommended operational strategies” to limit the potential environmental harm flowing from exceedances above the 50,000 tonne limit could not have been implemented during the licence periods because no environmental assessment had been undertaken determining the impacts of increased extraction intensity. Although there was no actual harm, and perhaps no likelihood of harm occurring, there was a “potential” that such harm could occur as a result of increasing the intensity of the operation, without the implementation of operational strategies to abate that risk, and this is acknowledged in the EIS (see [124] above).

126. It follows from this analysis that the prosecutor has satisfied me beyond reasonable doubt that there was a “potential” for harm to arise, at a general level. Increasing the intensity of an activity for which an EPL is issued, contrary to that EPL, must, generally, give rise to a potential risk of harm to the environment.

127. However, given the unlikelihood of actual harm occurring, and despite the very large volumes involved, the present offences lie at the low end of objective seriousness.

128. In the absence of any evidence as to the impact of increased intensity on the surrounding environment, and its potential to cause environmental harm, I am not in a position to differentiate between the “potential” harm caused in the respective licence periods, despite the large exceedance in the second period, when compared with the other two periods. I can say, and only at a level of generality, that exceedances create additional environmental pressures (see [125] above), which have not been properly assessed, thereby undermining, or subjugating, the regulatory regime.

The other s 241(1) factors

129. Counsel for the prosecutor conceded that, given the absence of actual harm, the other matters under s 241(1) (see [104] above), apart from s 241(1)(d) (“control”), “had limited direct application here”, but he made the following brief submissions in respect of them (par 29):

• The defendants could readily have taken practical measures (s 241(1)(b)) to have avoided the commission of the offence, simply by not exceeding the production limit;

• and

• To the extent that there is some general potential for harm when a person exceeds a production limit imposed by the licence, such harm is reasonably foreseeable on the part of a person in the position of licence holder (s 241(1)(c)).

130. On the question of “control”, the prosecutor submitted that Wyanga had full control over the causes of the commission of the offence.

131. The defendants submitted (par 17) that the only matter of relevance was “control”, and conceded “that all matters were within [Wyanga’s] control and the control of its director defendants”.

132. I do not agree that “control” is the only relevant s 241(1) matter in this case. The foreseeability of the “potential” harm caused by the exceedance should be taken into account. As stated by Craig J in Environment Protection Authority v Centennial Newstan Pty Ltd [2010] NSWLEC 211, at [81]:

At a level of generality, it is appropriate to observe that the holder of an environment protection licence is clearly on notice of the possibility of harm to the environment occasioned by any of the activities which it carries out on the site to which that licence relates.

133. “Foreseeability” and “practical measure” are clearly established by the prosecutor, and must be taken into account in my determination of the objective seriousness of the s 64 offences.

134. Wyanga and its directors had available to them records enabling the tracking of the amount of material being extracted from the site, and extraction should have ceased when the limit was reached.

135. As its only directors, Louise and Joseph Cauchi had complete control over the actions of Wyanga in its commission of the s 64 offences, and this will be given due weight in my determination of the objective seriousness of the s 64 offences.

Other Objective Factors

136. The maximum penalty for contravening a licence condition, contrary to s 64(1) of the POEO, is $1 million for Wyanga, and $250,000 for each of Joseph and Louise. The maximum penalty is of great relevance to the question of objective seriousness, as it reflects the seriousness with which Parliament and, by extension, the general community, regards an offence: Magdalene, at [136].

137. Although most environmental offences are of strict liability, the state of mind of a particular offender in the commission of an offence weighs upon its objective seriousness. As stated by Preston ChJ, in Plath v Rawson [2009] NSWLEC 178; 170 LGERA 253, at [98] (extracted in Magdalene, at [130]):

A strict liability offence that is committed intentionally, negligently or recklessly will be objectively more serious than one not so committed…

138. It was submitted by the prosecutor that the exceedances by Wyanga were wilful and deliberate, and that this state of mind, on the evidence, should be attributed to both Louise and Joseph. This is an “objectively aggravating feature of the offence” (pars 32 – 33).

139. The prosecutor said that Wyanga was aware of the “extraction limit imposed under the EPL right from the outset”, and that “it must also be concluded that Wyanga was aware on an on-going basis of the volumes of material it was extracting”. Such knowledge can be assumed, because it provided “regular invoices to the persons to whom it was supplying material, and it regularly recorded the volumes of production, for the purposes of calculating royalties” owing to Apokis under the profit a prendre (see [33] above, and prosecutor’s subs, par 31).

140. The defendants admitted to the intentional commission of the offences (defendants’ subs par 28).

141. I am satisfied that the breaches of the extraction limit during all three licence periods were in intentional disregard for the extraction limit contained in the EPL licences, thus increasing the objective seriousness of the offence.

142. It is clear that a breach of an EPL condition directly undermines the statutory regime imposed under the POEO and its effective operation, a matter contributing to the objective seriousness of the offence. Here the breach was long-running, substantial in volume, and ignored the EPA’s investigation and “show-cause” notice.

Conclusion on Objective Seriousness

143. In light of all those objective circumstances in respect of the s 64 offences, I am of the opinion that the conduct of all the defendants raises the criminality from “low” ([??] above) to “low to moderate” objective seriousness.

Subjective Circumstances of the Section 64 Offences

Aggravating Circumstances

144. The only relevant aggravating factor referred to in s 21A(2) of the CSP Act is that the offence was committed for financial gain, (s 21A(2)(o)). SAF 68 – 74 reveal the circumstances of that financial gain

145. Between 7 November 2011 and 31 January 2012, Wyanga was paid approximately $452,635 by the Joint Venture for materials extracted from the quarry (SAF 68).

146. Between 1 April 2012 and 31 January 2013, Wyanga was paid approximately $3,751,148 by the Joint Venture for materials extracted from the quarry (SAF 70).

147. Wyanga also saved on licence fees. The fees paid by Wyanga over the charge period for the EPL came to a total of $4,965. Had Wyanga been granted a licence permitting the extraction of material to the level actually extracted the licence fees would have been $25,900 (SAF 72 – 74).

148. While Wyanga’s gross revenue derived from the sale of the extracted materials is clear, the prosecutor conceded (par 35) that “it is not in a position to assess what profit Wyanga made by reason of the commission of the offences”.

149. Nonetheless, it is clear on the evidence that Wyanga, and, therefore both Louise and Joseph Cauchi, generated significant revenue from selling their exceedances of extracted material, which would not have been generated but for their breaches of the extraction limits.

150. This circumstance will, therefore, be taken into account in the determination of penalties to be imposed on all the defendants.

Mitigating Circumstances

151. The defendants pointed to the following circumstances among those listed in s 21A(3) of the CSP Act as mitigating the seriousness of their offending:

1. the offence was not part of a planned or organised criminal activity (s 21A(3)(b));

2. the offender is unlikely to re-offend (s 21A(3)(g));

3. the remorse they have shown (s 21A(3)(i));

4. their pleas of guilt, (s 21A(3)(k) s 22);

5. no record of previous convictions (s 21A(3)(e)); and

6. assistance they gave to the EPA (s 21A(3)(m), s 23).

152. The prosecutor did not dispute the existence of any of those mitigating circumstances, but I still must be satisfied of their existence on the balance of probabilities: R v Olbrich [1999] HCA 54; 199 CLR 270, at [27].

153. For the following reasons, I am of the opinion that the defendants are entitled to a discount for mitigating circumstances (a) to (e), but not (f).

154. Factor (a) was not in issue, and I am satisfied of factor (b) – the defendants are unlikely to re-offend. The Highway upgrade is now complete, so the Joint Venture no longer requires material from the quarry – the high demand for the road upgrade was the primary cause given by the defendants for the exceedances (see [85] and [90] above), and the absence of this demand makes it unlikely that future exceedances will occur. Further, the September 2013 DA increasing the extraction limit to 490,000 tonnes (see [71] above), was pending before Council at the time of the hearing before me. Assuming that that DA is/was approved, and a corresponding EPL issued, it is unlikely that the defendants will exceed that new limit.

155. In respect of factor (c), both Joseph and Louise have expressed remorse, and taken responsibility for their involvement in the breaches of the licence conditions by Wyanga, as illustrated in their affidavit evidence (see [84] and [94] above). The individual defendants were present at the hearing before me and offered to give oral evidence affirming their remorse for their actions, but the prosecutor said that this was not necessary (Tp35, LL30 – 35). The defendants’ pleas of guilty also evidence remorse on their part: Siganto v The Queen [1998] HCA 74; 194 CLR 656, at 664. For those reasons, I am satisfied that the defendants are remorseful for their involvement in the commission of the s 64 offences.

156. In respect of factor (d), their guilty pleas, I note that the defendants indicated an intention to plead guilty to the s 64 offences on 14 February 2014, the first return date on the summons, but the pleas were not formally entered until 28 February, because the defendants were waiting on some further documents from the EPA (Tp5, LL3 – 15). The prosecutor did not submit that this minor delay in entering the pleas should impact the discount to which the defendants are otherwise entitled for their pleas of guilty. I, therefore, find them entitled to the full 25% discount for the utilitarian benefits of their guilty pleas in respect of the s 64 offences: R v Thomson; R v Houlton [2000] NSWCCA 309; 49 NSWLR 383.

157. In terms of factor (e), prior record, the evidence revealed that Wyanga had previously encountered some regulatory troubles involving its operation of another quarry, but there were no recorded convictions of relevance drawn to my attention, nor were there any of which the prosecutor was aware (SAF 66). This is a mitigating factor which should therefore be taken into account.

158. In terms of factor (f), assistance to the EPA, the prosecutor accepted a clear intention by the defendants to regularise their position, but when it came to the prosecution itself (SAF 46 – 65), the Cauchis did not attend an interview with EPA officers for the purpose of the investigation, despite two notices under s 203 of the EPA Act requiring a representative of the company to nominate a time and place for an interview (Exhibit P1, tabs 29 and 33). Nor did Wyanga respond to a notice under s 191 of the POEO requiring a copy of “all document consents, contracts, agreements and correspondence relating to the Quarry” (SAF 40).

159. I, therefore, conclude that all defendants offered only limited assistance to the EPA – they were less than entirely co-operative, and, to get some discount, should have provided more assistance. I, therefore, apply no discount on this ground.

Other Considerations

Costs

160. The defendants have, however, agreed to pay the prosecutor’s costs in the sum of $90,000 (Tp28, LL17 – 29). The payment of these costs is to their credit, and will be taken into account in the determination of the penalties across all twelve matters: Environment Protection Authority v Barnes [2006] NSWCCA 246, at [78].

Deterrence

161. Given my findings as to the unlikelihood of the defendants re-offending, no element of specific deterrence is required in the penalty, but, as with all environmental offences of this kind, the penalties must be sufficient to act as a general deterrent to others who may be inclined to commit similar offences for commercial gain.

Evenhandedness

162. Craig J said in Chief Executive of the Office of Environment and Heritage v Bombala Investments Pty Ltd [2013] NSWLEC 185; 199 LGERA 236 at [115]:

The principle of evenhandedness in sentencing requires the court to have regard to the general pattern of sentencing for offences of the kind being considered, being careful to identify the factual differences among cases

163. There have been several cases concerned with a breach of a condition of an EPL where no actual environmental harm resulted. Some were conveniently discussed by Pain J in Environment Protection Authority v State of New South Wales (Department of Environment, Climate Change and Water) [2010] NSWLEC 67; 174 LGERA 19, at [89] – [93]. Pepper J comprehensively examined a number of cases involving breaches of licence conditions in Environment Protection Authority v Orica Australia Pty Ltd (The Nitric Acid Air Lift Incident) (“Orica”) [2014] NSWLEC 103; 206 LGERA 239, at [223]. I also dealt with a breach of an EPL in very similar circumstances in MA Roche No 1 (see [120] above), and Craig J later sentenced the same defendant for an identical breach in MA Roche No 2.

164. In MA Roche No 1, the defendant company also operated a quarry on the New South Wales North Coast. It pleaded guilty to breaching a condition of its EPL, in the year January 2012 – January 2013, by exceeding its extraction limit by around 50,000 tonnes (at [2] and [15]).

165. Like the present case, the defendant in Roche had endeavoured to have the extraction limit increased by seeking new development consent from the local Council, but there were delays which disrupted that process (at [9]). However, unlike here, there was no EIS before the Court assessing the environmental impacts of an increase in the intensity of activities carried on at the quarry.

166. Like here, the offence was committed for financial gain (at [22]), but the defendant was given a discount of 40% for its early plea, the assistance given to the prosecutor, its agreement to pay the prosecutor’s costs and its poor financial position (at [23] and [33]).

167. I explicitly found that the defendant’s conduct did not entitle it to a discount for remorse and contrition, and it did have a prior record of environmental offences (at [24], [25] and [26]).

168. I imposed a fine of $50,000, which I discounted to $30,000.

169. Craig J in MA Roche No 2, sentenced the defendant on almost identical facts. The defendant pleaded guilty to breaching its EPL in the January 2013 – January 2014 licence period by exceeding the extraction limit by about 30,000 tonnes (at [2]).

170. His Honour noted the works being done to the Pacific Highway, which have also featured in the current proceedings (at [8]):

Since about 2010 major roadworks have been undertaken in the mid north coast area involving an upgrade to the Pacific Highway, being part of a joint State and Commonwealth upgrade project. The undertaking of these works has created a significant increase in demand for extractive materials from suppliers in the area of those works. The Defendant has been the supplier of required extractive materials to a number of large companies involved in the Pacific Highway upgrade project

171. I have earlier referred to His Honour’s findings on the environmental harm caused (at [121]). The other s 241(1) factors were also considered by His Honour. He found that the defendant had available to it records enabling it to keep track of how much material was being extracted, and, therefore, practical measures could have been taken to prevent the exceedances, the potential harm which could have been caused by the offences was foreseeable, the defendant had complete control over the circumstances giving rise to the offence, and the offence was deliberately committed for the purpose of financial gain (at [25] – [44]). His Honour concluded that the objective seriousness of the offence was “low to medium”, (at [44]).

172. In terms of subjective circumstances, His Honour noted that the defendant was entitled to the full discount for its early plea, and the assistance given to authorities at [45] – [46]. However, the defendant’s prior record disentitled it to any discount in that respect (at [49]), and he declined to take into account the defendant’s impecuniosity in arriving at the appropriate penalty (at [50] – [52]).

173. In light of the objective seriousness of the offence and the subjective factors, a penalty of $80,000 was imposed on the defendant, discounted by 35% for the mitigating circumstances to a fine of $52,000.

174. His Honour made the following remarks in respect to the higher penalty he imposed in comparison to my earlier decision (see [168] above), at [62] – [63]:

62 The Prosecutor in this case made no submission to the effect that the determination of an appropriate penalty in the case before Sheahan J was not truly reflective of an appropriate penalty for commission of the offence there being considered. In applying the principle of evenhandedness, I find that circumstance to be of some significance.

Appropriate penalty

63 Synthesising the objective circumstances of the offence, earlier described as being in the low to moderate range of objective gravity, and the subjective circumstances that I have identified, I consider that the appropriate penalty to be imposed would, subject to discount, be $80,000. While the penalty before discount considered appropriate by Sheahan J was $50,000, an additional factor that I must take into account is the fact of that conviction, resulting in the need for greater emphasis upon specific deterrence.

175. Given the similarity in circumstances between the Roche matters and the current case, the sentences imposed there would appear to provide the most reliable “guide” for the sentence to be imposed here. The objective circumstances in Roche were very similar, but the better record of the present defendants, and their genuine remorse, are relevant counterbalances to their limited cooperation with the authorities. Also, the element of specific deterrence in Craig J’s later Roche penalty is not warranted in the present circumstances.

176. Consistent with my findings on environmental harm, and my consideration of the other objective circumstances, despite the different levels of exceedances proven across the three licence periods – with a sharp spike in the second period – there is nothing before me to suggest a higher penalty for the breach in the second licence period. The “potential” for environmental harm to be caused by the exceedances was no greater in the second period.

Penalty and Discount

177. Mr Gracie made no applications for his clients to have the benefit of s 10 of the CSP Act.

178. In all the circumstances, I am of the opinion that all three defendants should be convicted of all the s 64 offences, and that a penalty of $50,000 before deductions, is appropriate in respect of each licence period.

179. The defendants are entitled to a 40% reduction in penalty for all the mitigating circumstances discussed above, bringing the total fine imposed for each licence period to $30,000, subject to downward adjustment of the total of $90,000, consistent with the principle of “totality” (see [97] – [98] above), by 10% to $81,000.

180. However, it is also necessary to deal with the issue of how that amount should be apportioned among the defendants, so as to avoid double (or here, possible triple) punishment.

Apportionment

181. The following submission on apportionment was made by counsel for the defendants (Tp34, LL1 – 13):

In relation to the s 64 breaches, they are contraventions primarily we’d respectfully submit by the company as the operator of the quarry. They are extraction limits exceeded operated by the company. It is also that company that is primarily the entity that derives the financial or commercial gain that’s been identified in the agreed statement of facts. So that’s where those matters are sitting. In relation to the individual and the executive liability triggered by s 169 that would be reflected in a penalty referable to Mr Joseph Cauchi which your Honour will see in the agreed statement of facts he’s identified as the individual in charge of operations. Para 11 it’s agreed that he is the individual director who is responsible for operational matters. So in terms of dealing with apportionment there we would say primarily it would be a matter for which the company itself would be responsible for the s 64 contraventions. And in terms of executive liability it would be Mr Cauchi for that.

182. It was also conceded by the defendants’ counsel that Wyanga “has no assets at the moment. It has a large number of creditors, and is no longer a going concern” (Tp33, LL21 – 22), bringing into question its capacity to pay any fine imposed.

183. In any event, Wyanga’s actions are directly attributable to its only directors, namely, Louise and Joseph. As a non-human entity, the only way it can act is through its directors, who are its “directing mind and will”. It will, therefore, suffice to impose penalties on Louise and/or Joseph for their role in the breaches, and to impose only a nominal fine on Wyanga.

184. I agree with the defendants’ submission that Joseph is more culpable than Louise for the s 64 breaches. He was primarily responsible for the operational side of the business, and, therefore, had direct involvement in the extraction of material; Louise on the other hand was concerned primarily with paper work, and had less involvement in what was actually extracted from the site.

Conclusion – s 64 offences

185. I am, therefore, of the opinion that Joseph should bear the majority of the burden of the penalties for the s 64(1) breaches, by paying a fine of $25,000 in each case, with nominal penalties of $1,000 each being imposed on Wyanga and Louise, in each case.

The Section 66(2) Offences

186. I now turn to deal with the appropriate penalties to be imposed for the s 66(2) offences, of which all three defendants were found guilty by Craig J.

187. The relevant factual circumstances giving rise to these offences are outlined above (at [23] – [31]).

188. The prosecutor submitted (par 38) that the failure to disclose the exceedance in the 2nd licence period in the annual return is “objectively a fairly serious matter”.

189. The failure to disclose the exceedance in the annual return significantly undermines the operation of the regulatory scheme under the POEO Act.

190. It was submitted (pars 39 – 40):

39.   One of the principal purposes of an annual return, which may be discerned from the legislative scheme, is to ensure the integrity of the licensing system by requiring breaches of the licence to be disclosed. It is trite to observe that the Prosecutor does not have sufficient resources itself to independently monitor every licence issued under the Act and it relies instead upon information being provided under compulsion of law by each licence holder and on the accuracy of that information.

40.   In this case the consequence of not disclosing in the licence return for the 2012 calander year the exceedance, and significant exceedance, of the extraction limit imposed under Condition A1.2, was to prevent the EPA from having the opportunity to take regulatory action at an earlier date to prevent continued contraventions of the law…One reasonably infers that, had the EPA been informed of the exceedance at an earlier point in time, it may have taken action earlier.

191. I accept the prosecutor’s submissions in this respect.

192. As to the defendants’ state of mind, the prosecutor conceded that it could not “establish to the criminal onus” that Wyanga and its directors deliberately misled the EPA in failing to disclose the exceedance of the extraction limit, as it “remains a rational hypothesis that the failure to disclose the contravention was inadvertent”. It, therefore, did not submit this was an aggravating objective factor of the offence (par 41).

193. However, the prosecutor submits that “on any reasonable view, there is no satisfactory explanation for the omission to disclose” exceedance. The defendants clearly turned their mind to question of possible breaches of licence conditions, because they disclosed in the return other breaches, unrelated to the present proceedings. Accordingly, the “annual extraction limit should have been at the forefront of Wyanga’s mind in submitting its annual return” (par 42).

194. Louise had responsibility for completing the annual returns on behalf of Wyanga, and deposed ([84] above) that, in completing the return the subject of the charge, she simply made a “mistake”, not appreciating “that Wyanga had won and hauled more than 50,000 tonnes of material”, and that, with the benefit of hindsight, she would have taken more time to complete the returns carefully. This unchallenged evidence suggests that the non-disclosure was not deliberate, and I am inclined to accept Louise’s evidence in the absence of any assertion to the contrary.

195. However, an offence committed “recklessly” or “negligently” will be more objectively serious than one committed accidentally: Orica, at [127].

196. I agree with the prosecutor that the extraction limit, and the amount of material actually extracted from the quarry should have been at the forefront of Wyanga’s/Louise’s mind when the return was completed, particularly as other breaches of licence conditions were reported in it.

197. No satisfactory explanation has been provided as to why the exceedances were not reported, apart from mere “mistake” or oversight.

198. On that basis, I am satisfied that the failure to disclose the exceedance was at least negligent, and really quite reckless, and will take that matter into account in the determination of the objective seriousness of the offence.

199. In light of these objective factors I conclude that the s 66(2) offence is of “moderate” objective seriousness. There was no environmental harm caused, apart from the subjugation of the system, and there was no deliberate intention to mislead the EPA.

200. The defendants are entitled to a discount for the subjective factors discussed above (see [151] – [159] above). However, they did not plead guilty, and are, therefore, not entitled to any Thomson/Houlton discount.

201. They are entitled, in my view, to a 15% discount in penalty for other subjective factors.

202. As to evenhandedness, I find that the circumstances of this non-disclosure are relatively comparable with those in respect of a breach of s 66(2) in Environment Protection Authority v Transpacific Industries Pty Limited [2010] NSWLEC 85.

203. In that case, Transpacific did not disclose in its annual return the results of some tests which revealed the emission of certain gaseous substances into the atmosphere in excess of relevant limits in its EPL. The reason given for such non-disclosure was a belief that those test results were inaccurate, and therefore should not have been provided to the EPA, Pepper J found that this belief was honestly held.

204. Like here, it was found that the breaches of the limits caused no actual environmental harm (at [38]), but that harm was caused, albeit at the lower end of the scale, by the undermining of the efficacy of the protective environmental regulatory framework (at [97]). Similarly, it was found (at [100]) that the non-disclosure was not a deliberate attempt to mislead the EPA.

205. As to subjective factors, like here, Transpacific had no prior record ([113] – [114]), it expressed contrition and remorse ([117] – [118]), and there was no need for specific deterrence ([125]).

206. Her Honour discussed a number of other cases involving the provision of misleading information to regulatory authorities ([141]), and I have also considered them in reaching the appropriate penalty.

207. Pepper J fined the defendant in that case $20,000, before deductions of 30% for subjective circumstances, including its plea of guilty.

Appropriate Penalty for s 66(2) Offences

208. A similar but slightly higher penalty, and the lesser 15% discount discussed above, are warranted in this case.

209. The defendants’ agreement to pay $90,000 on account of the prosecutor’s costs embraces the prosecutor’s costs of the hearing before Craig J.

210. A penalty of $30,000 subject to the 15% discount, means that the fine to be imposed for the breach of s 66(2) will be $25,500.

Apportionment

211. Mr Gracie submitted (Tp34, LL15 – 25):

In terms of the contraventions under s 66(2) we would submit that primarily the person or defendant liable for that contravention is Mrs Cauchi, not so much Wyanga as a defendant, and certainly not Mr Cauchi as a director. As he says I left all of the administrative matters to my wife, and the agreed statement of facts in para 10 record the agreement between the parties that she is primarily the person responsible for administrative matters in relation to the company, including the completion of the annual return which contained the information leading to the charge under s 66(2), or lack of information leading to that. So in terms of apportionment that’s how we respectfully see the matter. We appreciate that there is a discretionary difficulty created by the disclosure which was made in relation to the company and its present unviable state.

212. I agree with the defendants’ submission that Louise is primarily culpable for the s 66(2) breach. She had responsibility for all the paperwork, and in particular, the annual return, and, although all three defendants should and will be convicted, the bulk of the penalty ($24,000) should be paid by her, with nominal fines of $1,000 and $500 respectively being paid by Joseph and the company.

Publication Order

213. Lastly, I record the agreement between the parties that a publication order should be made pursuant to s 250(1)(a) of the POEO Act. An agreed form of such a publication order was forwarded to the Court by the defendants’ solicitor on 4 September 2014, and I am content to make it.

Orders

214. I therefore make the following orders:

1. Joseph Cauchi:

1. is convicted of the offences as charged in matters 50992, 50993, and 50994 of 2013 and fined a total of $75,000 for those offences; and

2. is convicted of the offence as charged in matter 50991 of 2013 and fined $1,000 for that offence.

2. Louise Cauchi:

1. is convicted of the offences as charged in matters 50995, 50997 and 50998 of 2013 and fined a total of $3,000 for those offences; and

2. is convicted of the offence as charged in matter 50996 of 2013 and fined a total of $24,000 for that offence.

3. Wyanga Holdings Pty Ltd (ACN 105 783 220):

1. is convicted of the offences as charged in matters 50003 of 2014, 51001 and 51003 of 2013 and fined a total of $3,000 for those offences; and

2. is convicted of the offence as charged in matter 51002 of 2013, and fined a total of $500 for that offence.

4. Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997:

1. Joseph and Louise Cauchi, at their expense, must within 28 days of the date of this order cause a notice in the form of Annexure A to this judgment to be placed within the first five pages of the Saturday edition of the following publications at a minimum size of 10 cm x 18 cm:

1. Coffs Coast Advocate;

2. Clarence Valley Daily Examiner; and

3. Northern Star.

2. Within 35 days of the date of this order, Joseph Cauchi and Louise Cauchi must provide to the prosecutor a complete copy of the page of the publications in which the notice appears.

5. The defendants are jointly and severally ordered to pay the prosecutor’s costs for all twelve matters, in the total agreed sum of $90,000.

6. All exhibits are returned.

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EPA v Wyanga Annexure A (144 KB, pdf)

Decision last updated: 15 May 2015