EPA v Middle Harbour Constructions Pty Ltd

[2001] NSWLEC 185

Land and Environment Court

of New South Wales

CITATION:	EPA v Middle Harbour Constructions Pty Ltd [2001] NSWLEC 185
PARTIES:	PROSECUTOR Environment Protection Authority DEFENDANT Middle Harbour Constructions Pty Ltd
FILE NUMBER(S):	50070 of 2000
CORAM:	Sheahan J
KEY ISSUES:	Environmental Offences :- pollution of waters - plea of guilty - chain of command - foreseeability - potential for environmental harm - costs
LEGISLATION CITED:	Crimes (Sentencing Procedure) Act 1999
CASES CITED:
DATES OF HEARING:	13/03/2001
EX TEMPORE JUDGMENT DATE :	03/13/2001
LEGAL REPRESENTATIVES:	PROSECUTOR Mr G Plath (Solicitor) EPA DEFENDANT Mr P Clay (Barrister) SOLICITORS Burridge Harris & Flynn

JUDGMENT:

IN THE LAND AND Matter No: 50070 of 2000
ENVIRONMENT COURT Coram: Sheahan J
OF NEW SOUTH WALES 13 March 2001

ENVIRONMENT PROTECTION AUTHORITY

Prosecutor

v

MIDDLE HARBOUR CONSTRUCTIONS PTY LTD

Defendant

JUDGMENT

1. The defendant Middle Harbour Constructions Pty Ltd is the only entity charged over a pollution incident on 21 October 1999 at a sand mine or quarry at Duranbah on the far north coast.

2. Middle Harbour Constructions is the owner of the relevant site and the holder of a relevant pollution licence No.4686 (“the licence”).

3. It has pleaded guilty and the offence of “pollute waters” carries a maximum fine of $250,000.

4. It is alleged that the pollutant was matter having a pH value of less than 6.5.

5. There is no agreed statement of relevant facts, but there is little disagreement on the facts. I will not go into those facts in great detail as they appear in the affidavits of Mr Small and Mr Burridge.

6. At the end of the day the real issue on sentence is the question of control of the operation which miscarried at the relevant time, such that some 432,000 litres of offending waters overflowed the site and discharge system onto the road and towards a drainage channel or creek system leading to Cudgen Creek, and thence to the ocean at Kingscliff.

7. Middle Harbour Constructions is a family company effectively controlled almost totally and exclusively by Raymond Burridge, a well respected solicitor of the Supreme Court of long standing, who moved to the Grafton district in 1975.

8. Mr Burridge has had a longstanding business and professional association with the Baker family, which owns and controls Banora Projects Pty Ltd, which has a division named in some of the papers as “Baker Projects Property Development”.

9. The two groups of interests have done quite an amount of joint venture development work together over the years, including subdivisions, in relation to which Middle Harbour Constructions, on behalf of the joint venture, acquired the subject sand mine in 1992.

10. The joint venture is managed from Coolangatta, but Mr Burridge deals with all financing and some paperwork from Grafton, some 300km away from the subject site

11. Paul Baker of Banora Projects Pty Ltd is an engineer, and has been responsible for the operation of the sand mine, which is now in the process of being sold. A special condition of the sale contract requires that the pH level of the water at the mine be brought up to the licence’s requirements.

12. The licence designates and licenses a discharge point at which there was a malfunction on 19 August 1999, in respect of which the Defendant paid $1,500 in response to an infringement notice, not long prior to the incident which is the subject of today’s hearing.

13. After the August 1999 incident, rectification works were undertaken to ensure proper bunding of the discharge pond.

14. Burridge and Baker relied upon a site manager, Wayne Badenoch, who in turn engaged his son, Clay Badenoch, and directed him in his day to day duties. Baker visited at least weekly, and Burridge only occasionally.

15. On the day of the offence, Wayne Badenoch failed to attend on site for the relevant and usual supervision of Clay Badenoch’s activities. A pipe into the discharge pond was left open and an overflow occurred. The “discharge” from the overflow area back into the extraction area was blocked, and there was a secondary overflow into the drain.

16. Mr Burridge testified that the Badenochs had performed their duties satisfactorily until the August 1999, and the subject October 1999, incidents. There is also evidence that they were informed of the terms of the licence, and Council’s development consent conditions, and of their duties thereunder, in some detail, by Paul Baker.

17. The October 1999 incident was observed personally by EPA officer Steve Small. It is common ground that the pH of the waters into which any discharge from the mine flows is not always of acceptable standard, but the chain of command at the sand mine is still responsible to meet certain standards in that mine’s discharges.

18. Mr Burridge has been most insistent, on behalf of Middle Harbour Constructions Pty Ltd, regarding the licence conditions and relevant environmental issues generally. For example, on 2 March 1998 he wrote to Baker in these terms which included the following:

I think it is extremely important that we do not breach the Licence conditions or in any other way breach the Pollution Laws as the maximum fines on a Company are horrendous and could cause the possibility of a belly up situation.

19. He also reacted angrily to the infringement notice, and again reminded Baker on several occasions, such as in his letter of 16 November 1999: “We must be very careful in future not to breach the conditions of the approval”.

20. Mr Small’s affidavit describes the sand mine operation in great detail. On his inspection on 21 October 1999, Clay Badenoch was cooperative and responsive to Small’s concerns, and he called Baker and/or Wayne Badenoch to the site. Mr Baker attended.

21. Small took samples and photographs.

22. Banora Projects was cooperative and self-reported pH limits outside the licence limits.

23. Burridge, Baker, and the two Badenochs all voluntarily gave records of interview which were candid and helpful to the prosecutor.

24. The scientific expert, Mr Roach, reported, on affidavit, his interpretation of the test results. In essence, his evidence is of no actual environmental harm, but a potential for harm. He says (in par 12):

Given this information and the possibility that the discharge only occurred for 2 hours, though it is possible it may have been longer, then it is difficult to be emphatic about the likelihood that some impact occurred. As discussed above the pH of the water was at a level where there was a potential for environmental effects if it had discharged into a relatively undisturbed environment. Secondly it adds, albeit to a small degree, to cumulative environmental impacts from acid water discharges in the Tweed River generally which is widely considered to be a significant environmental problem in the catchment.

25. True it is that this defendant is at the very top of the chain of command, and that its guiding force is a man of environmental experience and reputation, who sought to insist upon best practice.

26. However, incidents such as this, and likely harm in consequence, are foreseeable up the chain.

27. Those above the Badenochs in that chain of command should perhaps have done more, after the August 1999 incident, to enforce such best practice, but I am still convinced of Mr Burridge’s contrition, on behalf of his family interests, and I note that they have decided to get out of the sand mining industry and rely on suppliers.

28. Appropriately, Mr Clay did not ask the court to apply s 10 of the Crimes (Sentencing Procedure) Act 1999 to the company, in view of the August incident.

29. It is, however, appropriate that the company should be fined at the lower end of the scale, and that it should receive a substantial discount for its plea of guilty.

30. I also take into account its preparedness to pay the Prosecutor’s costs, and the unlikelihood of further offences of this type in all the circumstances.

31. The orders of the court are:

1. The defendant is convicted of the charge in the summons.
2. The defendant is ordered to pay a fine of $10,000.
3. The defendant is ordered to pay the Prosecutor’s costs, which the court notes have been agreed in the amount of $3,500.
4. All the exhibits may be returned.