Filipowski v Terminals Pty Ltd and Ethell
[1999] NSWLEC 161
•14 July 1999
Land and Environment Court
of New South Wales
CITATION:
Filipowski v Terminals Pty Ltd and Ethell [1999] NSWLEC 161
PARTIES
No 50016 of 1998
PROSECUTOR
FilipowskiDEFENDANT
Terminals Pty LtdNo 50017 of 1998 and No 50136 of 1998
DEFENDANT
PROSECUTOR
Filipowski
Ethell
NUMBER:
50016 of 1998, 50017 of 1998 and 50136 of 1998
CORAM:
Pearlman J
KEY ISSUES:
Environmental Offences :- marine pollution - penalty - mitigation
LEGISLATION CITED:
Marine Pollution Act 1987 s 27(1) , s 28(1)
DATES OF HEARING:
08/27/1998; 05/12/1999; 05/13/1999; 05/14/1999
DATE OF JUDGMENT DELIVERY:
07/14/1999
LEGAL REPRESENTATIVES:
PROSECUTOR
Mr A L Hill (Barrister)SOLICITORS
Abbott ToutDEFENDANT (Terminals Pty Ltd)
Mr B W Larkin (Barrister)SOLICITORS
Freehill Hollingdale & PageDEFENDANT (G Ethell)
SOLICITORS
Mr B W Larkin (Barrister)
Norton Smith & Co
JUDGMENT:
Contents
Section Paragraph Number
Introduction 1 to 6
The relevant statutory provisions 7 to 12
The incident 13 to 22
The amount of the spill 23
- The extent of the spread of the spill 24 to 30
The amount of the spill 31 to 43
Responsibility for the whole spill? 44 to 54
Mitigating factors 55
Mitigating factors relating to both defendants 56 to 60
Mitigating matters relating to Terminals 61 to 66
Mitigating matters relating to Mr Ethell 67 to 71
Section 556A 72 to 74
The appropriate penalties 75 to 81
IN THE LAND AND
50016/98, 50017/98 and 50136/98
ENVIRONMENT COURT Pearlman J
OF NEW SOUTH WALES 14 July 1999
No 50016 of 1998
- Prosecutor
- Defendant
No 50017 of 1998 and No 50136 of 1998
- Prosecutor
- Defendant
Introduction
1. This judgment is concerned with penalties and costs in relation to three prosecutions in respect of which pleas of guilty have been entered.
2. All three prosecutions have been brought under the Marine Pollution Act 1987 (“the Act”) and each of them arises out of an incident where a substance known as nonyl phenol escaped into the waters of Port Botany during a discharge of cargo from a vessel to the terminal.
3. The charge against the defendant, Terminals Pty Ltd (“Terminals”) and one of the charges against the defendant, Mr Ethell, arise under s 27(1) of the Act.
4. A further charge under s 28(1) of the Act was brought against Mr Ethell. In a judgment which I delivered on 27 October 1998, I found that this charge contained an incurable defect in that it failed to disclose any offence, and I dismissed the summons. No statutory time limitation arises under the Act, and the prosecutor charged Mr Ethell a second time for an offence under s 28(1) of the Act by a summons which did not have the same defect as the first summons. It is the latter charge which is, of course, the subject of this judgment.
5. It is also relevant to note that the three initial proceedings were by leave heard together. The hearing proceeded on the basis that the prosecutor and defendant had reached an agreement that the amount of nonyl phenol which discharged into the waters of Port Botany was 60 litres. After that hearing had concluded, the defendants by notice of motion sought and obtained an order permitting them to resile from that agreement. I gave leave to both the defendants and prosecutor to adduce further evidence limited to the issue of the amount of nonyl phenol which was discharged.
6. That further evidence was adduced at a resumed hearing, and at the same time, by leave, the new charge under s 28(1) against Mr Ethell was heard.
The relevant statutory provisions
7. Part 4 of the Act deals with pollution relating to “transfer operations”. That term is defined under s 25(1) as follows:
‘transfer operation’ means any operation that is involved in the preparation for, or in the commencement, carrying on or termination of, a transfer of oil or of any oily mixture or of a liquid substance or of a mixture containing a liquid substance to or from a ship or a place on land.
8. Section 26 relevantly provides as follows:
26. This Part applies to a discharge of oil or of an oily mixture or of a liquid substance or of a mixture containing a liquid substance into State waters -
(a) from a ship or place on land in or in connection with a transfer operation.
9. The expression “place on land” is defined in s 25(1) to include, amongst other things, “(a) any structure or apparatus on or above or below the surface of any land” .
10. Section 27(1) provides that, if a discharge to which pt 4 applies occurs, each appropriate person in relation to the discharge, and any other person whose act caused the discharge, are each guilty of an offence punishable, in the case of a corporation, by a fine not exceeding $1000000, and in the case of an individual, by a fine not exceeding $200000.
11. Section 25(1) defines “appropriate person” as meaning, in relation to a discharge from an apparatus on a place on land, the occupier of the place or the owner or the person in charge of the apparatus. In this connection, there is no issue that Terminals is the occupier or owner of the apparatus from which the nonyl phenol escaped, and that Mr Ethell was the person in charge of that apparatus.
12. Section 28(1) provides that, if a discharge to which pt 4 applies occurs, each appropriate person in relation to the discharge shall, without delay, notify, in the prescribed manner, the Minister of the occurrence. Mr Ethell is, as I have indicated, charged under this section. The maximum penalty for this offence is $50000.
The incident
13. On 6 July 1996 and overnight into 7 July 1996, the NCC Madinah was tied up to the Bulk Liquids Berth at Port Botany, discharging its cargo which contained a consignment of nonyl phenol. Its port side was alongside the wharf platform, between the structures at either end known as the north and south dolphins.
14. At about 2.00 am in the morning of 7 July 1996, Mr Ethell, who was employed as an operator by Terminals, noticed that a substance was discharging from the pressure relief line of dockline no 2.
15. The pressure relief line is a small one inch diameter line that leads in a ‘U’ shape from the top of dockline no 2. It is normally used for the purpose of relieving gas pressure in dockline no 2, but it is also used to take samples of product during delivery. To enable the taking of samples, the pressure relief line is fitted with a stainless steel ball valve. Mr Ethell noticed that the ball valve was partially open, and he closed it.
16. The above description of the apparatus is taken from the evidence of Mr S J Roberts, a former marine surveyor, who was engaged in marine surveying activities at the time of the incident. In that capacity, he was present at the Bulk Liquids Berth in the morning of 7 July 1996, and, at about 2.00 am, he inspected the apparatus. As well as noticing that the ball valve was closed, he observed that the pressure relief line had been angled from its vertical position.
17. There was no evidence to establish why precisely the ball valve had been open, nor why the pressure relief line had been angled from its vertical position. Mr Roberts thought that the pressure relief pipe had been angled by unknown persons engaged in relieving gas pressure so as to deflect the gas away from them, but he proffered no opinion as to why the ball valve was open. The prosecution sought to establish that the ball valve was defective in that it did not contain a stop pin which would prevent it being left open. This was not established, but, as I later indicate, Terminals has now installed a different type of ball valve which will prevent accidental opening, and it has replaced the pressure relief line with fixed joints. I infer from this that the apparatus was capable of being accidentally altered in a way which could lead to the kind of discharge which did in fact occur and that is a matter which was in the control of Terminals as the owner or occupier of the apparatus.
18. Mr Roberts’ observation was that the nonyl phenol had escaped on to the inside top corner of the retaining wall at the Bulk Liquids Berth, and from there it had divided into two streams. One stream passed directly into the waters of Botany Bay beneath the Berth. The other stream had fallen into a bunded area at the Berth, and almost all of it had by-passed containment trays designed to catch minor spills, and had flowed into a sump underneath the wharf platform. Mr Roberts noticed that a valve, (known as a “dump valve”), which was designed to drain rainwater from the sump into the waters of Botany Bay, was open, and liquid was flowing from the sump through the dump valve into the water. There had been no rain, and accordingly, Mr Roberts concluded that the liquid so flowing was nonyl phenol. Mr Roberts instructed Mr Ethell to close this valve, and he observed Mr Ethell do so.
19. Mr G J Fox was an employee of the Sydney Ports Corporation (“SPC”) and, at the time of the incident, he was on duty as environment officer. He gave evidence about the sump. He explained that it was designed to catch both rainwater and spills, and that the dump valve was only opened in order for rainwater to discharge into Port Botany. Any spill contained in the sump would be pumped out.
20. It is not clear for what period of time the discharge continued. In his affidavit, Mr Ethell estimated that the duration was about 15 minutes, although when interviewed by Mr J Rawlings (who was investigating the incident), Mr Ethell estimated a duration of about 20 to 30 minutes. Another estimation was given by Mr G W Horman, who is the operations manager of Terminals. By reference to the activities which took place on the adjoining dockline no 3, Mr Horman estimated a duration of about 15 minutes. Nothing turns on the duration of the discharge because none of the estimates of the amount which was discharged relied on it as a factor, and accordingly I make no finding about it.
21. After noticing the discharge, Mr Ethell began to take steps to clean up the spill. He positioned rags so that the nonyl phenol would stop running into the sump. Then he and Mr S Madden, another operator employed by Terminals, proceeded for the next few hours to clean up the wharf platform. It was not until about 11.00 am that Mr Madden observed a “scum like” substance in the water, and he alerted Mr Ethell to this.
22. Mr N Mandros was the ports officer for the SPC on duty on 7 July 1996. His evidence was that he noticed a substance on the surface of the waters around the wharf platform and the vessel, and he had a conversation with Mr Ethell. There is a conflict in the recollections of Mr Mandros and Mr Ethell about that conversation, and I shall return to it. For the present, it is sufficient to note that Mr Mandros became aware of the spill, and he alerted SPC officers. Evidence was given by four employees of the SPC (Mr T J Hales, Mr P C Azzopardi, Mr C C Alsop and Mr R Claypole) that a clean up operation, involving an absorbent boom and rope mops, commenced at about 1.00 pm and was completed by about 4.00 pm.
The amount of the spill
23. Following upon the parties resiling from their agreement that the amount of the substance discharged was about 60 litres, most of the resumed hearing was devoted to evidence designed to establish the actual amount of the spill. Two critical issues arose. The first was the extent of the spread of the nonyl phenol upon the surface of the waters in Port Botany. This arose because some of the estimates of the amount of the spill were based on calculations which depended, amongst other things, upon the extent of the spread. The second issue was the actual amount. I deal with each in turn.
The extent of the spread of the spill
24. In his affidavit, Mr Ethell stated that he looked at the water around the vessel and the wharf platform, and “… recorded the spread and extent of the spill as I observed it …” In giving oral evidence, he said that what he meant by the use of the word “recorded” was that he made a mental note of his observation. He later marked on a map (being a copy of a map made by Mr Mandros) the extent of the spill as he observed it. According to Mr Ethell, the spill was at the rear of the vessel, near the north dolphin. However, that statement conflicts with the statement he made when interviewed by Mr Rawlings. At that time, Mr Ethell said that there was “a little scum” on the front of the vessel and at the rear of the vessel.
25. Mr Ethell’s claim that the spill was at the rear of the vessel also conflicts with the evidence of Mr Mandros. On the map to which I have referred, Mr Mandros marked the extent of the spill much more extensively than had Mr Ethell. The notation by Mr Mandros on the map shows an area from the front of the vessel to the rear, and extending around the north and south dolphins, as well as under the wharf platform. In his affidavit, Mr Mandros said he observed substance on the surface of the waters around the wharf platform and around the vessel, on which it extended from the port shoulder to the stern, and that the vessel was “caked in the substance at the waterline” .
26. Observations were also made by the clean up operators. Mr Hales instructed the operators to place absorbent material on the surface of the water around the southern end of the wharf platform and the port side of the vessel. He stated in his affidavit that “[T]his contained the substance that was on the waters surface between the ship’s side and underneath the working platform” .
27. Mr Azzopardi said that he observed substance on the waters between the sea wall and the back of the Bulk Liquid Berth. Mr Claypole stated that he saw a “waxy substance” floating on the surface of the water around the vessel.
28. Mr Rawlings also interviewed Mr R Kelly, who was an employee of Terminals. Mr Kelly stated that he observed absorbent booms around the north and south dolphins.
29. Mr P Clarkson, who is a chemist and marine surveyor, was at the Bulk Liquids Berth at 11.19 am on 7 July 1996. He stated that the substance was along the side of the vessel and around the pylons of the wharf platform, and that the spread of the substance was not as extensive as stated by Mr Mandros. Furthermore, he explained that the substance did not continuously spread over the surface of the water, but rather was concentrated in pools or globules, and had a tendency to stick to the side of the vessel and around the pylons.
30. I cannot, from this evidence, be satisfied beyond reasonable doubt as to the precise extent of the spread of the spill, but the weight of the evidence supports a finding beyond reasonable doubt that the extent was not confined to the rear of the vessel, as Mr Ethell claimed, but extended along the port side of the vessel, and under the wharf platform at least for some distance.
The amount of the spill
31. As I noted in my earlier judgment, the document which led to the defendants’ seeking to resile from their agreement as to the amount of the spill was an SPC marine response report form (“the report form”). It was prepared by Mr L T Barnes, a port officer in the employ of the SPC. It noted the “pollution extent” as being less than “100 m 2 ” , and it contained the following statement:
chemical spill marine pollution nonyl phenol (6.2) 20 - 30 litres.
32. Evidence was given by Mr Barnes as to how he came to fill out the report form. The spill was reported to him by Mr Hales, and he inserted an estimate of 20 - 30 litres because that was the estimate provided by Mr Hales.
33. There was some confusion as to the date of the report. It bears the date “8/7” , but, by reference to the report number endorsed upon it, and the report numbers endorsed on the previous and subsequent reports in the marine response book, as well as the records of the date and time of the shift he was operating, Mr Barnes stated that the date was in error, and it should have referred to 7 July 1996. Corroborative evidence on this aspect was given by Mr Alsop. I am satisfied beyond reasonable doubt that the date was in error, and that the report form was completed by Mr Barnes at 12 noon on 7 July 1996.
34. Mr Larkin, who appeared for the defendants, urged the Court to place considerable weight upon this document, it being, in his submission, a contemporaneous business record of the SPC based upon estimates from an SPC officer involved in the clean up operation. However, Mr Hales gave evidence that he did not make any estimate of the amount of the spill because he relied upon what he had been told by Mr Ethell and he merely passed on Mr Ethell’s estimate.
35. Both Mr Ethell and Mr Mandros made estimates of the amount of the spill. Mr Mandros deposed to the fact that, after becoming aware of the spill and taking some samples, he asked Mr Ethell how much of the substance had been lost, and Mr Ethell replied that it was “No more than 30 litres” . Mr Mandros estimated, from his observation of the substance on the water, that there was at least 30 to 40 litres.
36. That range of amount is also corroborated by observations made by Mr Kelly and by Mr Clarkson on 7 July 1996. As I have earlier noted, Mr Kelly was at the Bulk Liquids Berth at 5.30 am on 7 July 1996. He subsequently prepared a written report, which contained the following statement:
Following my own personal inspections, acknowledging the flow characteristics of this product at the discharge temperature on the night, and subsequently speaking to the operators present on the wharf at the time, I would confidently offer that approximately 20 to 40 litres escaped during the incident but could not be sure of how much actually made it to the tide.
37. Mr Clarkson was at the Bulk Liquids Berth at 11.19 am on the same date. As I have earlier said, he observed the extent of the spread of the spill, and he stated in his affidavit that he estimated the amount of the spill as within a range of 30 to 40 litres.
38. The prosecution relied upon the evidence of two experts to assert that the amount of the spill was not less than 200 litres, and more likely in the order of 409 litres.
39. The first was Mr M J Morrison, who is an industrial chemist and manager of a company called Oilcheck Pty Ltd, which, amongst other things, provides evaluations and diagnoses and consultative services relating to petroleum products. Mr Morrison provided a report in which he estimated the amount of the spill as in the order of more than 409 litres and not less than 250 litres, based on information which he had gleaned from the affidavits of various witnesses, and a number of assumptions as to the period of the discharge of the cargo of nonyl phenol, the extent and thickness of the spread of the spill, and the tidal change.
40. The second was Dr J C Chapman, who is an ecotoxicologist in the employ of the Environment Protection Authority. He estimated that the volume of the spill was not less than 200 litres. He based his calculations upon the evidence of assumptions as to the actual area of the extent of the spread of the spill as observed by Mr Mandros and also by Mr Clarkson, the measurements of the vessel and the wharf platform, and the thickness of the spread.
41. There was considerable criticism by Mr Clarkson of the assumptions upon which the estimates of Mr Morrison and Dr Chapman were based, and Mr Larkin submitted that the Court should reject their estimates because of doubt about those assumptions. Mr Hill, for the prosecutor, endeavoured to cast doubt upon Mr Clarkson’s credibility, by tendering copies of correspondence between Mr Clarkson and the solicitors for Terminals, in which various drafts of his report were discussed and amended. Mr Hill submitted that this correspondence indicated that Mr Clarkson was crafting his report in a way favourable to Terminals, and hence it should be rejected as not being impartial.
42. However, the compelling feature of all the evidence about the amount of the spill is the conformity of the estimates made contemporaneously or nearly contemporaneously. Added to that is the fact that the estimates of both Mr Morrison and Dr Chapman were based on calculations of the extent of the spill, the precise area of which is open to doubt, as I have earlier found. For these reasons, and not principally because of Mr Clarkson’s criticisms, I do not find the estimates of Mr Morrison and Dr Chapman to be reliable. The evidence of the contemporaneous and near-contemporaneous observations satisfy me beyond reasonable doubt that the amount of the spill did not exceed 40 litres.
43. I should add, for completeness, that in making that finding, I have placed no weight upon the evidence of Mr R E Bohun. He is an industrial chemist who gave a report about some of the characteristics of nonyl phenol. His evidence was adduced by the defendants to cast further doubt on the estimates of Mr Morrison and Dr Chapman, but I found it of little assistance.
Responsibility for the whole spill?
44. In his closing submissions on behalf of the defendants, Mr Larkin emphasised the fact that the nonyl phenol which escaped from the pressure relief line divided into two streams, and only one of those streams went directly into the waters of Port Botany. The other went, as I have earlier found, into the sump beneath the wharf platform, and it flowed from there into the waters through the dump valve which was open.
45. Mr Larkin submitted that, having regard to those circumstances, the defendants accepted responsibility for the discharge of nonyl phenol which went directly into the waters, but they did not accept responsibility for the discharge which flowed to the waters through the dump valve, because the dump valve was apparatus under the control of the SPC and not the defendants.
46. I had and still have some difficulty in understanding this submission. The defendants have pleaded guilty to the offences charged under s 27(1) of the Act, and that plea carried with it an admission of the essential elements of the offence ( R v O’Neill (1979) 2 NSWLR 582). Accordingly, I assume that Mr Larkin was not endeavouring to raise at that late stage in the proceedings some sort of defence to the charges. I propose to treat this submission as being made by way of mitigation of the penalties - that is, a submission that, in imposing penalties for the respective offences, the Court should take into account the fact that some of the spill of nonyl phenol was caused by the dump valve being open, a feature of the incident which was beyond the control of the defendants.
47. However, I reject any submission that I should take these facts into account in mitigation of the penalties for the respective offences. I do so for the following reasons.
48. First, the source of the discharge was apparatus under the control of Terminals. That is the point from where the nonyl phenol leaked, and it is irrelevant to a consideration of the seriousness of the respective offences that some of it did not leak directly into the waters of Port Botany but instead reached those waters indirectly.
49. Secondly, I have had regard to s 3(5) of the Act which is in the following terms:
(5) A discharge of oil or of an oily mixture or of a liquid substance or a mixture containing a liquid substance onto or into any land or waters, or any structure or thing, having the result that the whole or any part of the oil or oily mixture or liquid substance or mixture containing a liquid substance eventually enters any State waters, is for the purposes of this Act deemed to be a discharge into those State waters of the oil or oily mixture or liquid substance or mixture containing a liquid substance.
50. Mr Larkin sought to show that this deeming provision did not apply to a discharge of a substance into a device designed to contain the substance, which, he submitted, occurred in this case. I can see no justification, however, in reading down s 3(5) in this way. So long as the result of the discharge is that it eventually enters State waters, it is a discharge into State waters to which the Act applies. Section 3(5) indicates that the critical matter is the result which occurs, that is, that the discharge enters State waters.
51. In my opinion, s 3(5) applies to an eventual discharge which might traverse various objects or parcels of land or sea before it reaches State waters; in such a case, the deeming provision operates to deem the discharge to be a discharge into State waters despite the intervening obstacles. In terms of s 27(1), the discharge which occurred in this case was a discharge from a “place on land … in connection with a transfer operation” . The discharge did not in its entirety flow directly into State waters, but it eventually found its way into those waters, and it is accordingly, pursuant to s 3(5), deemed to be a discharge into those State waters. In relation to that discharge, the defendants have pleaded guilty, and no mitigation of the penalties to be imposed is warranted by the fact that the open dump valve was not in their control.
52. I should add that Mr Larkin sought to make good his submission by reference to the English decisions of Moses v Midland Railway Company (1915) 113 L.T. 451, Impress (Worcester) Ltd v Rees (1971) 2 All ER 357 and Alphacell Ltd v Woodward (1972) AC 824. Each of those cases involved a statutory provision which made it an offence to “cause” pollution of a river, and each case elucidates the meaning of “cause” in those statutory provisions. Section 27(1) of the Act which applies in this case is analogous, because it makes each appropriate person “whose act caused the discharge” guilty of an offence. Mr Larkin’s submission, as I understood it, was that the defendants did not “cause” the discharge which entered the waters of Port Botany through the open dump valve. But this submission has an immediate difficulty. The “cause” of the discharge was not the open dump valve - it was the open ball valve and angled pipe on the pressure relief line.
53. Even if, however, I am wrong in rejecting these circumstances as a factor in the imposition of the penalties, I cannot place any weight upon it. That is because the point was made in closing submissions and there is simply no evidence as to how much of the 40 litres of nonyl phenol which discharged went into the waters via each stream. Mr Roberts estimated that 70 to 80 percent of the discharge had fallen into “the bunded area at the Berth” and that the remainder had fallen into the water beneath the Berth. In giving oral evidence, he said that only a small amount of liquid was flowing though the dump valve. But that evidence does not establish precisely how much of the 40 litres of nonyl phenol escaped from the sump through the open dump valve, and how much went directly into the waters.
54. For all those reasons, I reject Mr Larkin’s submission.
Mitigating factors
55. I take into account a number of mitigating factors, some of which relate to both defendants, and some of which relate only to Terminals or to Mr Ethell.
Mitigating factors relating to both defendants
56. There was no actual environmental harm. There was, however, a likelihood of environmental harm. Dr Chapman prepared a report in which he outlined the characteristics of nonyl phenol, and considered the likelihood of harm based on the original agreed amount of 60 litres. I put aside his conclusions derived from that agreed amount, but I take into account his evidence that nonyl phenol has the potential to “bioconcentrate ” in aquatic organisms, by which he meant that if organisms are exposed to nonyl phenol for sufficient time, the concentration in the body of the organism will exceed the concentration in the water by a factor called “the bioconcentration factor”. Dr Chapman rated nonyl phenol as more hazardous than oil because of its potential to bioconcentrate and because it has a higher toxicity than oil. He concluded that some aquatic organisms were likely to be stressed or killed, and that its bioaccumulative effect would decrease over days.
57. I take into account, in the defendants’ favour, that there was a clean up operation, which was completed some 14 hours after the spill occurred. To that extent, any harm that was likely to have occurred would be limited to the exposure of aquatic organisms to nonyl phenol in that period, and the likely harm would not have continued thereafter.
58. It is appropriate to deal, at this point, with a submission made by Mr Hill that, if the defendants had acted with more alacrity, the clean up operation could have commenced earlier than it did. The nonyl phenol escaped at about 2.00 am. In the interview with Mr Rawlings, Mr Ethell said that at about 3.00 am he told Mr Terry Adams, an employee of Terminals, that there had been a spill, saying that “[T]he valve cock was open on the nonyl phenol sampler and it missed going into the tray” . In Mr Hill’s submission, Terminals could have triggered the clean up response as early as 3.00 am, but that response did not occur until after 11.00 am.
59. I do not consider that this is a factor which I should take into account in determining the appropriate penalties. The failure to report the incident formally is the subject of the charge under s 28(1) against Mr Ethell. Furthermore, I accept that Mr Ethell believed that the spill flowed onto the wharf platform, and he was unaware that it had discharged into the waters of Port Botany until about 11.00 am, when it was seen by Mr Madden, and shortly thereafter by Mr Mandros, who alerted the SPC.
60. I take into account in mitigation that the amount of the spill which I have found (being an amount not exceeding 40 litres) is not a trivial amount, but, on the other hand, it is not a substantial amount.
Mitigating matters relating to Terminals
61. I take into account the fact that Terminals has no prior convictions for an environmental offence. I accept Mr Larkin’s submission that its record is significant, since it has been involved in an industry which has inherent environmental risk for approximately 19 years.
62. Mr Horman gave evidence of corrective action which Terminals has carried out since the incident. It has refitted the pressure relief line with fixed joints rather than screwed joint lines, which will obviate the bending of the line away from the vertical. It has replaced the ball valve with a type which does not permit accidental opening. Lastly, it has installed further steel shielding to ensure that leaks are contained within bunded areas. Mr Horman’s evidence is that the cost of these steps totals $59950.
63. Mr Horman also gave evidence of quality, risk, safety and environmental management systems operated by Terminals, including a preventative maintenance programme designed to ensure that environmental problems do not arise. He stated that its systems are regularly audited and continuously improved. Furthermore, Terminals has implemented a safety and environmental programme over the past six years as part of a $20 million improvement programme, which included spending $8 million on site improvements and renewal of operating equipment.
64. I accept this evidence as demonstrating that Terminals takes its environmental responsibilities seriously.
65. I also take into account in its favour that its plea of guilty was entered at an early stage in the proceedings.
66. Another factor which I have taken into account is Terminals’ agreement to pay $4180.14 to cover the costs of the clean up operation.
Mitigating matters relating to Mr Ethell
67. Mr Ethell has not been convicted of any previous environmental offences. Furthermore, he pleaded guilty to the offences under s 27(1) and 28(1) at an early stage in the proceedings.
68. It is appropriate that I note, at this point, the discrepancy in the evidence of Mr Ethell and Mr Mandros as to their conversation at about 11.30 am on 7 July 1996. Mr Mandros deposed to that conversation in his affidavit. He said that he had observed a substance in the waters, and he asked Mr Ethell if there had been a spill. Mr Ethell’s response, according to Mr Mandros, was to say “No”. Mr Mandros inspected the waters, and alerted the SPC. He stated that, at that point, Mr Ethell approached him, and confirmed that there had been a spill. Mr Ethell’s version of the conversation is that he never denied to Mr Mandros that there had been a spill, and, according to his version of the conversation, he himself told Mr Mandros that there had been a spill.
69. I do not think it necessary to make a positive finding as to whose version of the conversation is correct. Even if Mr Ethell did in fact initially deny the discharge of nonyl phenol into the waters, he corrected that statement within a short time thereafter, and I am satisfied that he accepts his responsibility for the incident.
70. Four references as to his good character have been tendered. They all attest to his high moral and ethical standards, and his conscientious approach to his family, the community and his work. I place more weight on those two of the four references which support Mr Ethell’s good fame and character whilst acknowledging that the writer is aware of the charges against him.
71. Although there was no direct evidence of the following matters, I accept that Mr Ethell is aged 42, has a wife and three children, and has been employed by Terminals for ten years. I also accept that the charges against him have had a significant impact upon him.
Section 556A
72. Mr Larkin sought the application to both defendants of s 556A of the Crimes Act 1900, which provides that the Court may, without proceeding to conviction, dismiss the charge, having regard, amongst other things, to the character and antecedents of the person charged and other extenuating circumstances.
73. I do not think that this is an appropriate case for the exercise of the Court’s discretion. First, the application of s 556A is rare, especially in cases concerning environmental offences (see Morrison v Peers (1995) 87 LGERA 39 at 42). Secondly, so far as it concerns Terminals, I cannot find any case of a marine pollution prosecution in this Court where s 556A has been applied to a corporation, and Mr Larkin could not refer to any such case. Thirdly, I do not, in any event, consider that there are any extenuating circumstances in this case which would justify the application of s 556A in relation to Terminals. Mr Larkin sought to make submissions about the commercial consequences to Terminals if it was convicted, but there was no evidence to support such a submission, and, so far as concerns its good record, I have noted that fact as a factor in mitigation of penalty.
74. As to Mr Ethell, I take note that, in some marine pollution cases, the master of the vessel has sometimes been given the benefit of s 556A. But this is not a case of indirect responsibility such as may pertain in the case of a master. Mr Ethell was the only person from Terminals on the wharf platform at the time of the spill, and he was directly responsible for the operation of the apparatus from which the discharge emanated. I can discern no extenuating circumstances which would justify dismissal of the charges against him .
The appropriate penalties
75. In relation to Terminals, I have had regard to all the foregoing matters which may be summarised as follows:
(a) the apparatus was in the control of Terminals;
(b) the discharge was caused by defects in that apparatus;
(c) the amount of the discharge of about 40 litres was not trivial but it was not substantial and it was ultimately cleaned up;
(d) there is no evidence of actual harm, but there was a likelihood of harm;
(e) Terminals has agreed to pay the clean up costs;
(f) the plea of guilty; and
(g) Terminals’ good record and environmental responsibility.
76. I consider that an appropriate penalty in respect of the offence under s 27(1) with which Terminals is charged is $30000.
77. In relation to Mr Ethell, I have also had regard to all the matters set out in this judgment, and I summarise them so far as they particularly relate to him as follows:
(a) he was the operator in charge of the apparatus at the relevant time;
(b) the amount of the discharge of about 40 litres, which was not trivial but was not substantial and was cleaned up;
(c) there is no evidence of actual harm, but there was a likelihood of harm;
(d) the plea of guilty;
(e) his good record, his personal circumstances and the references tendered on his behalf.
78. I consider that an appropriate penalty in respect of the offence under s 27(1) with which Mr Ethell is charged is $7000.
79. I take all the foregoing matters into account in relation to the offence under s 28(1) with which Mr Ethell is charged. However, both the offences with which Mr Ethell is charged relate to the same incident. Accordingly, I have had regard to the overall criminality (see Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 82 LGERA 21) and made an adjustment to the penalty which I consider appropriate in the case of the offence under s 28(1). The appropriate penalty is $1000.
80. However, before proceeding formally to convict the defendants and to impose the penalties which I have indicated, I propose to allow the parties an opportunity to address the Court on the question of costs. The conduct of this case was unusual. After a day’s hearing on the question of penalties and costs, leave was sought and granted to adduce further evidence on the question of the amount of the spill. I expressed some concern during the resumed hearing that the evidence and submissions on that aspect of the case occupied about two and a half days, and I still have that concern. After all, although the issue of how much nonyl phenol went into the waters of Port Botany is a critical factor in the determination of penalties, it is not an essential ingredient of any of the offences with which the defendants have been charged. Furthermore, the issue was whether the amount was 20 to 40 litres, or 200 to 400 litres. There is, quite obviously, a substantial difference between the two amounts, but viewed in the context of the whole spectrum of possible environmental harm, both instances fall within the lower range, and accordingly the difference between them is not so critical.
81. I grant leave to the parties to approach the Registrar to obtain a date for the hearing of submissions on the question of costs.
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