Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Henry Payson Pty Ltd

[2023] NSWLEC 5

Land and Environment Court

New South Wales

Medium Neutral Citation:

Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Henry Payson Pty Ltd [2023] NSWLEC 5

Hearing dates:

24, 25, 26 and 27 May and 10, 15 and 16 June 2022

Date of orders:

31 January 2023

Decision date:

31 January 2023

Jurisdiction:

Class 5

Before:

Pepper J

Decision:

See orders at [319].

Catchwords:

ENVIRONMENTAL OFFENCES: taking of water without a properly operating water meter – construction and use of a water supply work without a water supply work approval – plea of guilty – factors to take into account in determining sentence – whether environmental harm – actual and substantial harm to the regulatory scheme – whether offences committed knowingly and to what extent – whether offences committed recklessly – whether offender in control of the causes of the offences – whether offences committed for financial gain – contrition and remorse demonstrated to a limited extent – totality principle applied – comparable cases – whether an order pursuant to s 353B(c) of the Water Management Act 2000 appropriate – monetary penalty imposed – publication order – costs ordered

Legislation Cited:

Crimes (Sentencing Procedure) Act 1999, ss 3A(b), 21A(2), 21A(3), 22

Criminal Procedure Act 1986, ss 257B, 257G

Fines Act 1996, ss 6, 122

Protection of the Environment Operations Act 1997, s 144AB(2)

Water Management Act 2000, ss 60A(4), 91B(1), 91I(1)(b), 91E(1), 91I(2), 336C(1), 345(2), 353B(c), 353E(1), 353G(1)(a), 364, 364A

Protection of the Environment Administration Act 1991, s 6(2)

Cases Cited:

Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357

Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234

CabonneShire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304

Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683

Chief Executive of the Office of Environment and Heritage, Department of Premier and Cabinet v Turnbull [2014] NSWLEC 150

Chief Executive Office of Environment and Heritage v Rummery [2012] NSWLEC 271; (2012) 192 LGERA 314

Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109

Chief Executive, Office of Environment and Heritage v Boyle [2019] NSWLEC 54

Chief Executive, Office of Environment and Heritage v Brummell [2019] NSWLEC 114; (2019) 242 LGERA 241

Darter v Diden [2006] SASC 152; (2006) 94 SASR 505

De Silva v The Queen [2019] HCA 48; (2019) 268 CLR 57

Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; (2010) 79 NSWLR 1

Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121

Director-General, Department of Environment and Climate Change v Hudson (No 2) [2015] NSWLEC 110

Elias v The Queen [2013] HCA 31; (2013) 248 CLR 483

Environment Protection Authority v Albiston [2020] NSWLEC 80

Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289; (2006) 148 LGERA 278

Environment Protection Authority v Barnes [2006] NSWCCA 246

Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58

Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90

Environment Protection Authority v Dyno Nobel Asia Pacific Pty Ltd [2017] NSWLEC 64

Environment Protection Authority v Hanna [2018] NSWLEC 80; (2018) 235 LGERA 114

Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29

Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299

Environmental Protection Authority v Bartter Enterprises Pty Ltd (No 4) [2021] NSWLEC 45

Fahs v R (2007) NSWCCA 26

Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189

Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Budvalt Pty Ltd; Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Harris [2020] NSWLEC 113

Harris vHarrison [2014] NSWCCA 84; (2014) 86 NSWLR 422

Harrison v Harris [2013] NSWLEC 105

Harrison v Perdikaris [2015] NSWLEC 99

Hewitt v R (2007) 180 A Crim R 306

Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348

Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616

Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170

Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357

Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59

Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120

Natural Resources Access Regulator v Bao Lin Pty Ltd [2022] NSWLEC 42

Natural Resources Access Regulator v Maules Creek Coal Pty Ltd [2021] NSWLEC 135

Natural Resources Access Regulator v Tony Thompson [2022] NSWLEC 48

NCR Australia v Credit Connection [2005] NSWSC 1118

Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610

Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253

Plath v Vaccount Pty Ltd t/as Tableland Timbers [2011] NSWLEC 202

R v AB [2011] NSWCCA 229; (2011) 59 MVR 356

R v Doan [2000] NSWCCA 317; (2000) 50 NSWLR 115

R v Dodd (1991) 57 A Crim R 349

R v Gent [2005] NSWCCA 370; (2005) 162 A Crim R 29

R v Harris [2007] NSWCCA 130; (2007) 171 A Crim R 267

R v Martin [2021] NSWCCA 316

R v Nichols (1991) 57 A Crim R 391

R v Olbrich [1999] HCA 54; (1999) 199 CLR 270

R v Oliver (1980) 7 A Crim R 174

R v Tadrosse [2005] NSWCCA 145; (2005) 65 NSWLR 740

R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383

RvTodd [1982] 2 NSWLR 517

R v Visconti [1982] 2 NSWLR 104

R v Wheeler [2000] NSWCCA 34

R v Yildez [2006] NSWCCA 97; (2006) 160 A Crim R 218

R v Zeilaa [2009] NSWSC 532

RL v R [2015] NSWCCA 106

Secretary, Department of Planning and Environment v Sell & Parker Pty Ltd [2022] NSWLEC 60

Smith v The Queen (1991) 25 NSWLR 1

Tazelear v R [2009] NSWCCA 119

The Hills Shire Council v Kinnamey Civil & Earthworks Pty Ltd [2012] NSWLEC 45; (2012) 188 LGERA 273

Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458

Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465

Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561

Weininger v The Queen [2003] HCA 14; (2003) 212 CLR 629

Williams v R [2010] NSWCCA 15

Category:

Sentence

Parties:

Grant Barnes, Chief Regulatory Officer Natural Resources Access Regulator (Prosecutor)
Henry Payson Pty Ltd (Defendant)

Representation:

Counsel:
T Howard SC with M McAuliffe (Prosecutor)
C O’Neill (Defendant)

Solicitors:
Crown Solicitor’s Office (Prosecutor)
Cole & Butler Solicitors (Defendant)

File Number(s):

2021/117758, 2021/117770, 2021/117797, 2021/117798

Publication restriction:

Nil

JUDGMENT

Table of contents

TOPIC   PARAGRAPH

Henry Payson Pty Ltd Pleads Guilty to Four Water Offences 1

The Legislative Regime Creating the Offences 7

The Commission of the Meter Offences and Dam Use and Construction Offences by Payson at Binneguy Station 10

Payson’s Water Access Licence and Approvals 16

The Water Infrastructure at Binneguy Station 21

The Commission of the First Meter Offence During the 2016/2017 Cotton Season 37

The Commission of the Second Meter Offence During the 2017/2018 Cotton Season 45

The Natural Resources Access Regulator Inspects Binneguy Station 50

The Parties Dispute Three Factual Matters 51

Prosecutor’s Evidence 53

Payson’s Evidence 57

Sentencing Principles 60

The Purposes of Sentencing 60

Statutory Matters Required to be Taken into Account in Sentencing 61

Objective Seriousness of the Offences 66

Nature of the Offences 69

Payson’s State of Mind During the Commission of the Offences 81

Payson’s State of Mind During the Commission of the Meter Offences 81

Wheildon’s Evidence as to the Under-recording 84

The Evidence of Barne as to the Under-recording 115

Findings on Payson’s State of Mind at the Time of the Commission of the Meter Offences 123

Payson’s State of Mind During the Commission of the Dam Use and the Dam Construction Offences 135

Payson’s State of Mind During the Commission of the Dam Use and Construction Offences 139

The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offences 145

The Harm Occasioned by the Commission of the Dam Use and Construction Offences 149

The Harm Occasioned by the Commission of the Meter Offences 150

The Evidence of Dr Meyer 153

The Evidence of Wheildon on Environmental Harm 169

Findings on the Environmental Harm Occasioned by the Commission of the Meter Offences 171

Maximum Penalty 175

Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offences 179

Control Over the Causes of the Commission of the Offences 181

Practical Measures Which Could Have Been Taken to Prevent or Mitigate the Environmental Harm 189

Whether the Commission of the Offences Occurred During a Severe Water Shortage or Extreme Heat Event 190

Payson’s Reasons for Committing the Offences 191

The Impact of the Commission of the Offences on Other Persons’ Rights Under the WMA 201

The Market Value of Any Water That Has Been Lost, Misused or Unlawfully Taken as a Consequence of the Commission of the Offences 202

Payson Was Not Complying With the Orders of an Employer or Supervisor 207

The Water Taken Was Not for Environmental Purposes 208

No Other Civil Penalty for the Offending Conduct Has Been Imposed 209

The Meter Offences Involved a Series of Criminal Acts 210

The Meter Offences Did Not Form Part of a Planned Criminal Activity 215

Conclusion on the Objective Seriousness of the Offences 227

Subjective Circumstances of Payson 227

Early Pleas of Guilty 234

Assistance to the Prosecutor 245

Antecedents 248

Contrition and Remorse 249

The Good Character of Payson 259

The Likelihood of Payson Reoffending and Prospects of Rehabilitation 264

The Offences Could Have Been Prosecuted in the Local Court 265

Deterrence, Denunciation and Retribution 266

The Totality Principle 277

Consistency in Sentencing 282

Capacity to Pay a Fine 286

Costs 298

Appropriate Sentence 304

Moiety 309

Publication Order 310

Meter Compliance Checks 316

Orders 319

Henry Payson Pty Ltd Pleads Guilty to Four Water Offences

1. Henry Payson Pty Ltd (ACN 608 721 919) (“Payson”) has pleaded guilty to four offences against ss 91I(1)(b) and 91B(1) of the Water Management Act 2000 (“WMA”), committed at 17036 Gwydir Highway, Biniguy, New South Wales (“NSW”) (known as “Binneguy Station”). Payson has been charged with:

1. one count of knowingly taking water from a water source regulated by the WMA while metering equipment was not operating properly between 3 September 2016 and 21 March 2017 contrary to s 91I(1)(b) of the WMA (matter 2021/117758) (“the first meter offence”);

2. one count of knowingly taking water from a water source regulated by the WMA while metering equipment was not operating properly between 7 December 2017 and 20 February 2018 contrary to s 91I(1)(b) of the WMA (matter 2021/117770) (“the second meter offence”);

3. one count of using a water supply work without a water supply work approval contrary to s 91B(1) of the WMA (matter 2021/117797) (“the dam use offence”); and

4. one count of constructing a water supply work without a water supply work approval between 8 February and 9 March 2016 contrary to s 91B(1) of the WMA (matter 2021/117798) (“the dam construction offence”).

2. The amended summons for the first meter offence relevantly states:

The prosecutor claims:

1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant), having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charges set out in the following counts:

COUNT 1

That, between about 6.00pm on 3 September 2016 and about 6.45am on 21 March 2017, at the property known as Binneguy Station, comprised of Lot 41 of Deposited Plan 751750 and 23 other lots located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91I(1)(b) of the Water Management Act 2000 (NSW) (the Act), in that, the Defendant took water from a water source to which Part 3 of Chapter 3 of the Act applied by means of a metered work while its metering equipment was not operating properly and knew by its director George Barne that the metering equipment was not operating properly.

Particulars

(a)   The subject property

At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.

(b)   The relevant times

The relevant times were approximately:

6.00pm on 3 September 2016 to 2.00am on 7 September 2016;

11.00pm on 14 September 2016 to 7.30am on 15 September 2016;

12.30pm on 15 September 2016 to 7.00am on 16 September 2016;

7.45am on 16 September 2016 to 11.00am on 16 September 2016;

11.45am on 16 September 2016 to 7.00am on 18 September 2016;

10.45am on 22 September 2016 to 7.45am on 23 September 2016;

5.15am on 27 January 2017 to 7.45am on 29 January 2017;

5.00am on 10 February 2017 to 5.15am on 11 February 2017;

4.30am on 17 February 2017 to 4.30am on 19 February 2017;

5.15am on 24 February 2017 to 6.30pm on 24 February 2017; and

1.45pm on 20 March 2017 to 6.45am on 21 March 2017.

(c)   A person who takes water

The Defendant took water by pump extraction.

(d)   From a water source to which Part 3 of Chapter 3 of the Act applies

The Gwydir Regulated River Water Source, as proclaimed in the Proclamation under the Water Management Act 2000 published in Gazette No. 110 of 1 July 2004, p 5004.

(e)   By means of a metered work

Water was taken using a metered Batescrew pump located at GPS Coordinates at around Latitude -29.529040025, Longitude 150.208328485 within Lot 41 of Deposited Plan 751750, being the pump authorised for use at Binneguy Station by Combined Water Supply Work and Water Use Approval 90CA800277.

(f)   Metering equipment

The pump was fitted with, or connected to, a Mace Agriflow Series 3 meter with Serial Number 26203.

(g)   Metering equipment was not operating properly

The Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly in that it was not correctly measuring the volume of water extracted by means of the pump from the water source.

(h)   Knew metering equipment was not operating properly.

The Defendant knew by its director George Barne that the Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly by not correctly measuring the volume of water being extracted by the pump from the water source.

(i)   Evidence of the offence first came to the attention of the authorised officer on 30 July 2018

Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals – Regional Water Regulation West, on 30 July 2018.

3. The amended summons for the second meter offence charges Payson with the following:

The prosecutor claims:

1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant), having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charges set out in the following counts:

COUNT 1

That, between about 5.15am on 7 December 2017 and about 4.45am on 20 February 2018, at the property known as Binneguy Station, comprised of Lot 41 of Deposited Plan 751750 and 23 other lots located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91I(1)(b) of the Water Management Act 2000 (NSW) (the Act), in that, the Defendant took water from a water source to which Part 3 of Chapter 3 of the Act applied by means of a metered work while its metering equipment was not operating properly and knew by its director George Barne that the metering equipment was not operating properly.

Particulars

(a)   The subject property

At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.

(b)   The relevant times

The relevant times were approximately:

5.15am on 7 December 2017 to 11.45pm on 9 December 2017;

1.30am on 10 December 2017 to 9.00am on 10 December 2017;

1.45pm on 15 December 2017 to 4.30am on 19 December 2017;

5.30pm on 16 December 2017 to 5.30am on 17 December 2017;

7.15am on 17 December 2017 to 8.15am on 17 December 2017;

9.15am on 17 December 2017 to 4.30am on 19 December 2017;

4.15am on 21 December 2017 to 0.00am on 23 December 2017;

3.15pm on 26 December 2017 to 8.45am on 28 December 2017;

7.15pm on 26 December 2017 to 8.45am on 28 December 2017;

3.45am on 30 December 2017 to 3.15am on 31 December 2017;

4.45am on 1 January 2018 to 11.00am on 4 January 2018;

3.00pm on 4 January 2018 to 5.15pm on 4 January 2018;

5.45pm on 4 January 2018 to 7.00am on 6 January 2018;

11.30am on 6 January 2018 to 7.00pm on 10 January 2018;

8.00pm on 10 January 2018 to 4.45am on 11 January 2018;

5.15am on 11 January 2018 to 8.00am on 15 January 2018;

11.15pm on 17 January 2018 to 10.15am on 22 January 2018;

12.30am on 27 January 2018 to 6.45pm on 28 January 2018;

5.00am on 5 February 2018 to 4.15pm on 7 February 2018;

12.15pm on 14 February 2018 to 6.45am on 15 February 2018;

10.30am on 14 February 2018 to 6.45am on 15 February 2018;

8.00am on 16 February 2018 to 6.45am on 18 February 2018; and

7.15am on 18 February 2018 to 4.45am on 20 February 2018.

(c)   A person who takes water

The Defendant took water by pump extraction.

(d)   From a water source to which Part 3 of Chapter 3 of the Act applies

The Gwydir Regulated River Water Source, as proclaimed in the Proclamation under the Water Management Act 2000 published in Gazette No. 110 of 1 July 2004, p 5004.

(e)   By means of a metered work

Water was taken using a metered Batescrew pump located at GPS Coordinates at around Latitude -29.529040025, Longitude 150.208328485 within Lot 41 of Deposited Plan 751750, being the pump authorised for use at Binneguy Station by Combined Water Supply Work and Water Use Approval 90CA800277.

(f)   Metering equipment

The pump was fitted with, or connected to, a Mace Agriflow Series 3 meter with Serial Number 26203.

(g)   Metering equipment was not operating properly

The Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly in that it was not correctly measuring the volume of water extracted by means of the pump from the water source.

(h)   Knew metering equipment was not operating properly.

The Defendant knew by its director George Barne that the Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly by not correctly measuring the volume of water being extracted by the pump from the water source.

(i)   Evidence of the offence first came to the attention of the authorised officer on 30 July 2018

Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals – Regional Water Regulation West, on 30 July 2018.

4. The summons for the dam use offence is as follows:

The prosecutor claims:

1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant) having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charge that, between 1 July 2016 and 30 June 2018 inclusive, at the property (known as Binneguy Station) comprising relevantly Lot 137 of Deposited Plan 751750 along with 23 other lots, located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91B(1) of the Water Management Act 2000 (NSW) (the Act), in that the Defendant used a water supply work and did not hold a water supply work approval for that work.

Particulars

(a)   The subject property

At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.

(b)   Used a water supply work

Between 1 July 2016 and 30 June 2018 inclusive, the Defendant used a water supply work, namely a dam located at around Latitude ‑29.537786752, Longitude 150.167078793 within Lot 37 of Deposited 751750, for the storage of water and for the irrigation of crops grown at Binneguy Station.

(c)   Did not hold a water supply work approval for that work

No person, including the Defendant, has ever held a water supply work approval for the dam located at around Latitude -29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750.

(d)   Alternative legal basis to establish liability

In the alternative to the Defendant being in direct contravention of s 91B(1):

i. During the said period, George Barne (the Defendant’s Director) contravened s. 91B(1) of the Act in that he used a water supply work at Binneguy Station, being a dam at around Latitude -29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750, for the storage of water and for the irrigation of crops grown at Binneguy Station, in circumstances where there was no water supply work approval for that work

ii. In the circumstances and by reason of the Defendant being the occupier of Binneguy Station during the said period, the Defendant is taken to have committed an offence against s 91B(1) of the Act by the application of s 91L(1)(a) of the Act.

(e)   Evidence of the offence first came to the attention of an authorised officer on 30 July 2018

Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals – Regional Water Regulation West, on 30 July 2018.

5. Finally, the dam construction offence is charged in these terms:

The prosecutor claims:

1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant) having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charge that between about 8 February 2016 and about 9 March 2016 at the property (known as Binneguy Station) comprising relevantly Lot 137 of Deposited Plan 751750 along with 23 other lots, located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91B(1) of the Water Management Act 2000 (NSW) (the Act), in that the Defendant constructed a water supply work and did not hold a water supply work approval for that work.

Particulars

(a)   The subject property

At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.

(b)   Constructed a water supply water

Between about 8 February 2016 and about 9 March 2016, the Defendant constructed a dam located at around Latitude ‑29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750.

(c)   Did not hold a water supply work approval for that work

No person, including the Defendant, has ever held a water supply work approval for the dam located at around Latitude ‑29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750.

(d)   Alternative legal basis to establish liability

In the alternative to the Defendant being in direct contravention of s 91B(1):

i. During the said period, George Barne (the Defendant’s Director) contravened s. 91B(1) of the Act in that he constructed a water supply work at Binneguy Station, being a dam at around Latitude -29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750, in circumstances where there was no water supply work approval for that work

ii. In the circumstances and by reason of the Defendant being the occupier of Binneguy Station during the said period, the Defendant is taken to have committed an offence against s 91B(1) of the Act by the application of s 91L(1)(a) of the Act.

(e)   Evidence of the offence first came to the attention of an authorised officer on 30 July 2018

Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals – Regional Water Regulation West, on 30 July 2018.

6. At all relevant times, George Barne, the sole director and shareholder of Payson, was the controlling mind of the corporate defendant. That is, Barne was the “embodiment of the company” (The Hills Shire Council v Kinnamey Civil & Earthworks Pty Ltd [2012] NSWLEC 45; (2012) 188 LGERA 273 at [31]), and therefore, Barne’s acts and knowledge are those of Payson, as are any mitigating circumstances attributable to him.

The Legislative Regime Creating the Offences

7. Section 91I(1)(b) of the WMA creates an offence of taking water without a properly operating water meter:

91I   Taking water when metering equipment not working

(1)   A person who takes water from a water source to which this Part applies by means of a metered work while its metering equipment is not operating properly or is not operating and—

…

(b)   who knows or has reasonable cause to believe that the metering equipment is not operating properly or is not operating,

is guilty of an offence.

Tier 1 penalty.

8. Section 91B(1) of the WMA creates an offence of constructing and using a water supply work without a water supply work approval:

91B   Constructing or using water supply work without, or otherwise than as authorised by, a water supply work approval

(1)   A person—

(a)   who constructs or uses a water supply work, and

(b)   who does not hold a water supply work approval for that work,

is guilty of an offence.

Tier 2 penalty.

9. Section 363B of the WMA establishes the following relevant Tier 1 and 2 penalties for corporations:

363B   Penalties

For the purposes of this Act:

(a)   a Tier 1 penalty corresponds to a maximum penalty of:

(i)   in the case of a corporation, 20,000 penalty units and, in the case of a continuing offence, a further penalty of 2,400 penalty units for each day the offence continues, or

(ii)   in any other case, imprisonment for 2 years or 10,000 penalty units, or both, and, in the case of a continuing offence, a further penalty of 1,200 penalty units for each day the offence continues, and

(b)   a Tier 2 penalty corresponds to a maximum penalty of:

(i)   in the case of a corporation, 10,000 penalty units and, in the case of a continuing offence, a further penalty of 1,200 penalty units for each day the offence continues, or

(ii)   in any other case, 2,250 penalty units and, in the case of a continuing offence, a further penalty of 600 penalty units for each day the offence continues…

The Commission of the Meter Offences and Dam Use and Construction Offences by Payson at Binneguy Station

10. Many of the basal facts giving rise to the commission of the offences were agreed between the parties. Payson is an Australian proprietary company limited by shares and was registered on 13 October 2015. Barne was appointed (and remains) as Payson’s sole director and secretary on that date.

11. During the offending periods Payson operated a farming business that involved, among other things, the irrigation of cotton crops at Binneguy Station. Barne is the registered owner of Binneguy Station after he acquired the property by transfer on 23 September 2015.

12. Binneguy Station is located within the Moree Plain Shire local government area, approximately 39 km east of Moree. A section of the Gwydir River, a major perennial river within the Barwon catchment, runs adjacent to a north-eastern area of Binneguy Station.

13. Binneguy Station is over 1,500 ha and comprises 24 lots across Deposited Plans (“DP”) 596939, 610624, 657698, 665701, 721690, 751750, 954967, 955066, 1036697, 1079760 and 1100126.

14. An arial photograph map of Binneguy Station is below:

15. At all relevant times, there was a dam at Binneguy Station located on Lot 137 of DP 751750 (“dam 1”). Between 8 February and 9 March 2016, Payson constructed a second dam adjacent to dam 1 (“dam 2”). The construction and use of dam 2 is the subject of the dam construction and the dam use offences.

Payson’s Water Access Licence and Approvals

16. From 1 July 2016 the Water Sharing Plan for the Gwydir Regulated River Water Source 2016 (“2016 WSP”) applied to the Gwydir Regulated River Water Source (“the water source”). At all material times, the section of the Gwydir River adjacent to Binneguy Station was part of the water source.

17. By reason of the proclamation made by the Governor under ss 55A and 88A of the WMA and published in Government Gazette No 110 on 1 July 2004, Pt 2 and Pt 3 of Ch 3 of the WMA applied to the water source.

18. Barne held the following approval and water access licences granted under the WMA:

1. a regulated river (general security) access licence, reference number 90AL800275 (“WAL 367”) for 780 units of water from the water source;

2. a supplementary access licence, reference 90AL800276 (“WAL 368”), for 270.1 units of water from the water source; and

3. a combined water supply works and water use approval 90CA800277 for the construction and use of Binneguy Station’s river pump to obtain water from the water source for the purpose of irrigation (“combined approval 90CA800277”).

19. WAL 367 and WAL 368 each nominated combined approval 90CA800277 as the only authorised extraction point.

20. No person or entity, including, relevantly, Payson or Barne, has ever held an approval under the WMA or the Water Act 1912 that authorised the construction or use of dam 2.

The Water Infrastructure at Binneguy Station

21. At all material times, Payson extracted water from the water source by a Batescrew Axial Flow pump (“the river pump”) for the purposes of irrigation.

22. The river pump was driven by an engine that was fixed to an Amarillo right-angled gear drive unit. In the period between 1 July 2016 and July 2017, this engine was a caterpillar 3208T. From August 2017, the river pump was powered by a Volvo Penta TAD540-542VE engine.

23. The river pump was connected to a pipe (“the pipe”) which, at one end, was positioned in the Gwydir River and, at the other end, was positioned at or near the entrance to the main channel that carried water from the water source to Binneguy Station (“the main channel”).

24. By operation of the river pump water was pumped from the water source through the pipe and into the main channel. The water then flowed by gravity along the main channel for approximately 1 km into another pipe that conveyed the water under the Gwydir Highway. Water flowing through that pipe discharged into the main channel and flowed for approximately 2 km before it was directed into dam 1.

25. The image below shows the approximate route taken by water extracted by the river pump from the water source:

26. A pump was installed in a sump forming part of the infrastructure of dams 1 and 2 and was used to pump water from the sump, hydraulically connected to the dams, into the head ditch for supply to the irrigated crop fields by three-inch siphon pipes (“the dam pump”). The siphon pipes were typically distributed every 2 m to irrigate every second row of crop.

27. A MACE brand AgriFlo Series 3 meter (“the meter”) was installed at Binneguy Station during the charge periods. It was an ultrasonic meter which comprised of, among other things, a display panel and a sensor probe connected to a shaft, namely, a MACE Doppler ultrasonic sensor (“the Doppler sensor”). The display panel was attached to a metal pole about 5-7 m from the river pump. The Doppler sensor was installed into the pipe and was connected to a display panel by an electrical power cable. The meter measured the rate of the flow of water extracted by the river pump as it travelled through the pipe where the Doppler sensor was located. The rate was expressed in ML per day and was recorded at 15 min intervals between September 2016 and February 2018.

28. If the Doppler sensor was placed in a direction that was contrary to the manufacturer’s specifications, the sensor could incorrectly detect, and therefore, the meter could incorrectly record, a flowrate that was lower than the actual flowrate.

29. A grub screw was located at the top of the shaft connected to the Doppler sensor. The direction of the grub screw indicated the direction of the velocity sensing face of the Doppler sensor inside the pipe. It was not in dispute that during the charge period, the Doppler sensor was facing in a direction that caused the meter to under-record the velocity of the water flow.

30. During February and March 2016, Wilde Civil Pty Ltd (“Wilde Civil”) carried out earthworks to dam 1 and constructed dam 2 in accordance with plans prepared by SMK Consultants Pty Ltd (“SMK Consultants”). Wilde Civil’s invoices for this work were issued to, and paid for by, Payson.

31. SMK Consultants had been engaged by Payson to undertake irrigation consultancy work at Binneguy Station and undertook work related to a “Gully dam survey and design” in 2015 during the course of the consultancy. One of the purposes of constructing dam 2 was to enable the capture of water when it flowed over the spillway of dam 1.

32. The construction of dam 2 commenced on 11 February 2016, and was completed no later than by the end of April 2016. The construction of dam 2 is the subject of the dam construction offence.

33. Following the completion of the works the total capacity of dam 1 was approximately 1,051 ML. However, when the amount of water in dam 1 reached around 824 ML, the new design meant that water would flow over the spillway into dam 2. After it was constructed, the total capacity of dam 2 was approximately 610 ML.

34. The total combined capacity of dams 1 and 2 was between 1,472 and 1,662 ML.

35. Dams 1 and 2 were capable of being used to collect and store water which would then be used to irrigate crops cultivated on Binneguy Station.

36. Between 1 July 2016 and 30 June 2018, as a consequence of rainfall or, in one instance, the extraction of water from the water source following a high flow event, Payson stored water in dam 2. This is the conduct that is the subject of the dam use offence.

The Commission of the First Meter Offence During the 2016/2017 Cotton Season

37. Between October 2015 and March 2018, James Wheildon was employed by Payson as a farm manager at Binneguy Station. Wheildon was responsible for the day-to-day farming operations at Binneguy Station, including budgeting, purchasing machinery, planning for the planting of crops, and irrigation.

38. Following the construction of dam 2, and prior to the 2016/2017 cotton season, Barne provided Wheildon with a document drafted by Wilde Civil showing the cumulative capacities of the dams at different heights.

39. A cotton season, or year, runs from September of the first year to March or April of the second year.

40. The 2016/2017 cotton season began in October 2016 and ended in April 2017. From time to time throughout that season water was pumped from the water source by Wheildon on behalf of Payson.

41. The following information was recorded by the meter during the 2016/2017 cotton season after each pumping event initiated by Wheildon:

No	Period	Meter Read	Average flowrate	Water extracted
1.	6.00pm 3/9/2016 to 2.00am 7/9/2016	Start: 2795.39 End: 2902.81	32.23 ML/day	107.42 ML
2.	11.00pm 14/9/2016 to 7.30am 15/9/2016	Start: 2903.02 End: 2913.08	28.18 ML/day	10.06 ML
3.	12.30pm 15/9/2016 to 7.00am 16/9/2016	Start: 2914 End: 2941.73	36.29 ML/day	27.73 ML
4.	7.45am 16/9/2016 to 11.00am 16/9/2016	Start: 2942.65 End: 2946.5	28.48 ML/day	3.85 ML
5.	11.45am 16/9/2016 to 7.00am 18/9/2016	Start: 2947.07 End: 3002.07	30.50 ML/day	50.00 ML
6.	11.00am 18/9/2016 to 7.15am 21/9/2016	Start: 3002.36 End: 3091.21	31.23 ML/day	88.85 ML
7.	10.45am 22/9/2016 to 7.45am 23/9/2016	Start: 3091.44 End: 3109.04	20.12 ML/day	17.6 ML
8.	5.15am 27/1/2017 to 7.45am 29/1/2017	Start: 3109.75 End: 3173.90	30.51 ML/day	64.15 ML
9.	5.00am 10/2/2017 to 5.15am 11/2/2017	Start: 3174.25 End: 3201.85	27.38 ML/day	27.6 ML
10.	4.30am 17/2/2017 to 4.30am 19/2/2017	Start: 3202.14 End: 3257.88	27.88 ML/day	55.74 ML
11.	5.15am 24/2/2017 to 6.30pm 24/2/2017	Start: 3258.13 End: 3271.85	24.84 ML/day	13.72 ML
12.	1.45pm 20/3/2017 to 6.45am 21/3/2017	Start: 3272.2 End: 3290.76	26.30 ML/day	18.56 ML
Total			28.24 ML/day	485.28 ML

42. On each occasion that Payson pumped water from the water source in the 2016/2017 cotton season, the meter was not operating properly because it under-recorded the volume of water taken.

43. The cause of the under-recording was the incorrect positioning of the Doppler sensor within the pipe. The Doppler sensor had been positioned to measure a reduced area of water, and therefore, it recorded a lower volumetric flow rate of water passing through the pipe than the flow that was actually occurring. As the evidence demonstrates, Payson, through its director Barne, knew that the meter was under-recording these volumes of water.

44. In the 2016/2017 cotton season, there was approximately 152 ha of flood irrigated cotton crops at Binneguy Station. The crop was irrigated and fertilised and there was no evidence of any major agronomic problems. Payson produced 1,652.79 bales of cotton (at 227 kg each) from that irrigated crop.

The Commission of the Second Meter Offence During the 2017/2018 Cotton Season

45. The 2017/2018 cotton season began in October 2017 and ended in April 2018. Throughout the season water was pumped from the water source by Wheildon on behalf of Payson as required.

46. The following information was recorded by the meter during the 2017/2018 cotton season after each pumping event initiated by Wheildon:

No	Period	Meter Read	Average flowrate	Water extracted
1.	5.15am 7/12/2017 to 11.45pm 9/12/2017	Start: 3291.03 End: 3360.91	25.22 ML/day	69.88 ML
2.	1.30am 10/12/2017 to 9.00am 10/12/2017	Start: 3361.16 End: 3368.38	23.14 ML/day	7.22 ML
3.	1.45pm 15/12/2017 to 5.15am 16/12/2017	Start: 3368.63 End: 3384.02	23.82 ML/day	15.39 ML
4.	5.30pm 16/12/2017 to 5.30am 17/12/2017	Start: 3384.23 End: 3394.41	20.36 ML/day	10.18 ML
5.	7.15am 17/12/2017 to 8.15am 17/12/2017	Start: 3394.66 End: 3395.69	24.48 ML/day	1.03 ML
6.	9.15am 17/12/2017 to 4.30am 19/12/2017	Start: 3395.93 End: 3440.29	24.61 ML/day	44.36 ML
7.	4.15am 21/12/2017 to 9.00am 23/12/2017	Start: 3440.63 End: 3490.27	22.58 ML/day	49.64 ML
8.	4.30am 26/12/2017 to 2.45pm 26/12/2017	Start: 3490.52 End: 3500.68	23.81 ML/day	10.16 ML
9.	3.15pm 26/12/2017 to 6.00pm 26/12/2017	Start: 3500.93 End: 3503.40	21.75 ML/day	2.47 ML
10.	7.15pm 26/12/2017 to 8.45am 28/12/2017	Start: 3503.64 End: 3540.36	23.50 ML/day	36.72 ML
11.	3.45am 30/12/2017 to 3.15am 31/12/2017	Start: 3541.84 End: 3565.28	23.95 ML/day	23.44 ML
12.	4.45am 1/1/2018 to 11.00am 4/1/2018	Start: 3565.35 End: 3637.21	22.00 ML/day	71.86 ML
13.	3.00pm 4/1/2018 to 5.15pm 4/1/2018	Start: 3637.43 End: 3639.41	21.18 ML/day	1.98 ML
14.	5.45pm 4/1/2018 to 7.00am 6/1/2018	Start: 3639.65 End: 3673.90	22.07 ML/day	34.25 ML
15.	11.30am 6/1/2018 to 7.00pm 10/1/2018	Start: 3674.14 End: 3778.17	24.12 ML/day	104.03 ML
16.	8.00pm 10/1/2018 to 4.45am 11/1/2018	Start: 3778.43 End: 3787.19	24.05 ML/day	8.76 ML
17.	5.15am 11/1/2018 to 8.00am 15/1/2018	Start: 3787.45 End: 3871.45	20.43 ML/day	84.00 ML
18.	11.15pm 17/1/2018 to 10.15am 22/1/2018	Start: 3871.65 End: 3962.36	20.34 ML/day	90.71 ML
19.	12.15am 26/1/2018 to 11.15am 26/1/2018	Start: 3962.57 End: 3971.84	20.23 ML/day	9.27 ML
20.	12.30am 27/1/2018 to 6.45pm 28/1/2018	Start: 3972.06 End: 4006.43	19.53 ML/day	34.37 ML
21.	5.00am 5/2/2018 to 4.15pm 7/2/2018	Start: 4006.60 End: 4048.06	16.80 ML/day	41.46 ML
22.	6.45am 13/2/2018 to 11.15am 14/2/2018	Start: 4048.23 End: 4068.34	16.92 ML/day	20.11 ML
23.	12.15pm 14/2/2018 to 6.45am 15/2/2018	Start: 4068.48 End: 4079.21	13.92 ML/day	10.73 ML
24.	10.30am 15/2/2018 to 6.00am 16/2/2018	Start: 4079.36 End: 4091.41	14.83 ML/day	12.05 ML
25.	8.00am 16/2/2018 to 10.45am 16/2/2018	Start: 4091.57 End: 4093.21	14.44 ML/day	1.64 ML
26.	12.00pm 16/2/2018 to 6.45am 18/2/2018	Start: 4093.63 End: 4118.58	13.48 ML/day	24.95 ML
27.	7.15am 18/2/2018 to 4.45am 20/2/2018	Start: 4118.73 End: 4145.42	14.08 ML/day	26.69 ML
Total			20.58 ML/day	847.35 ML

47. As was the case with the 2016/2017 cotton season, the meter was not operating properly during the 2017/2018 cotton season as a result of the incorrect positioning of the Doppler sensor in the pipe which under-recorded the volume of water taken.

48. Likewise, on each occasion that Payson pumped water from the water source, Payson, through Barne, knew that the meter was under-recording the volume of water being taken.

49. During the 2017/2018 cotton season there were approximately 245 ha of flood irrigated cotton crops at Binneguy Station. The crops were irrigated and fertilised, and there was no evidence of any major agronomic problems. Payson produced 2,883 bales of cotton (at 227 kg each) from the irrigated crops.

The Natural Resources Access Regulator Inspects Binneguy Station

50. On 30 October 2018 Senior Investigators Simon Taylor and Andrew Mannall of the Natural Resources Access Regulator (“NRAR”), attended Binneguy Station where they inspected the Doppler sensor and removed it from the pipe. They observed that the sensor face of the Doppler sensor was turned approximately 45 degrees away from upstream, that is, it was angled towards the side of the pipe. Because the Doppler sensor was not compliant with the manufacturer’s installation guidelines, it reduced the measurement area thereby decreasing the flowrate value recorded by the meter.

The Parties Dispute Three Factual Matters

51. The majority of the evidential dispute in the proceedings concerned three factual controversies between the parties, namely:

1. first, the degree to which the meter under-recorded the volume of water taken;

2. second, the extent of Barne’s knowledge about the degree to which the meter was under-recording; and

3. third, the level of Barne’s involvement in the running of the business during the offending period.

52. These matters were relevant to the state of mind of Payson at the time of the commission of the offences, the degree of control that Payson had over the causes of the offending conduct, and Payson’s objective culpability for the commission of the offences.

Prosecutor’s Evidence

53. In addition to the statement of agreed facts, the prosecutor relied upon a series of text and email communications between Barne, Wheildon and others; three meter data extract sequences during the offending period; water account statements for WAL 367 and WAL 368; a letter from SMK Consultants to the NRAR dated 26 February 2019; the expert evidence of Adjunct Professor Dr Wayne Meyer, an agronomist, dated 21 April 2021 (“the Meyer report”); and affidavits from the following witnesses:

1. Wheildon, affirmed on 19 March 2020 (“the Wheildon affidavit”), annexing a statement made by Wheildon to the NRAR during its investigation on 12 September 2018 (“the Wheildon statement”);

2. Kathleen Collingridge, affirmed on 20 April 2021 (“the Collingridge affidavit”); and

3. Rowan Murray, affirmed on 3 May 2022 (“the Murray affidavit”).

54. Wheildon deposed that at all material times he was the farm manager at Binneguy Station, employed by Payson from October 2015 to early 2018. In his affidavit, he described his work history and duties at Binneguy Station, the water management and irrigation system at the station, and the circumstances of the commission of the meter and dam use and construction offences. His evidence is, where relevant to the sentencing considerations that the Court must take into account, discussed in detail below.

55. Collingridge is a Customer Systems Analyst at WaterNSW and has held this role from 2007 onwards. He provided evidence with respect to WaterNSW’s Water Accounting System (“WAS”), its functionality, and the water account statements for WAL 367 and WAL 368.

56. Murray has been a Trade Analyst Coordinator at the Department of Planning and Environment (“the Department”) since December 2021. Prior to this role, he was a Water Resource Analyst at the Department. He deposed to the weighted average price of water from the water source during the period of the commission of the offences.

Payson’s Evidence

57. In addition to the statement of agreed facts, Payson relied upon: various text and email communications between Barne and Wheildon; a map of Binneguy Station which Wheildon marked with the location of the station’s rain gauges; an email to the NRAR service desk from Belynda Wheildon (Wheildon’s wife) on 30 July 2018, reporting the commission of the offences; Long Paddock data in relation to Pallamallawa from 1 September 2016 to 1 April 2017; information from Payson’s dropbox relating to rainfall gauges on the Station; and affidavits from the following witnesses:

1. Barne, sworn 17 May 2022 (“the first Barne affidavit”);

2. Barne, sworn 18 May 2022 (“the second Barne affidavit”); and

3. Ryan Hunt, sworn 18 May 2022 (“the Hunt affidavit”).

58. In his affidavits Barne provided evidence of his personal circumstances and the events leading up to the commission of the meter and dam use and construction offences. Again, where relevant, his evidence is dealt with in greater detail below.

59. Hunt is the Principal of AgriFlo Solutions Pty Ltd. He was approved by the Department to validate and install water meters. He deposed that he attended Binneguy Station on 7 January 2021, to install and validate a NSW non-urban water meter in accordance with the manufacturer’s specifications as required by WaterNSW.

Sentencing Principles

The Purposes of Sentencing

60. The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (“CSPA”) as follows:

3A   Purposes of sentencing

The purposes for which a court may impose a sentence on an offender are as follows:

(a)   to ensure that the offender is adequately punished for the offence,

(b)   to prevent crime by deterring the offender and other persons from committing similar offences,

(c)   to protect the community from the offender,

(d)    to promote the rehabilitation of the offender,

(e)    to make the offender accountable for his or her actions,

(f)   to denounce the conduct of the offender,

(g)   to recognise the harm done to the victim of the crime and the community.

Statutory Matters Required to be Taken into Account in Sentencing

61. Subsections 21A(2) and (3) of the CSPA set out aggravating and mitigating factors that the Court must consider. Factors relevant to the facts of this case are:

21A   Aggravating, mitigating and other factors in sentencing

…

(2)   Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows–

…

(m)   the offence involved multiple victims or a series of criminal act,

(n)   the offence was part of a planned or organised criminal activity,

(o)   the offence was committed for financial gain…

The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.

(3)   Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows–

…

(e)   the offender does not have any record (or any significant record) of previous convictions,

(f)   the offender was a person of good character,

(g)   the offender is unlikely to re-offend,

(h)   the offender has good prospects of rehabilitation, whether by reason of the offender’s age or otherwise,

(i)   the remorse shown by the offender for the offence, but only if:

(i)   the offender has provided evidence that he or she has accepted responsibility for his or her actions, and

(ii)   the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both),

…

(k) a plea of guilty by the offender (as provided by section 22),

…

(m)   assistance by the offender to law enforcement authorities (as provided by section 23)…

62. For offences created under the WMA, the Court must also consider the matters set out in s 364A of that Act:

364A   Matters to be considered in imposing penalty

(1)   In imposing a penalty on a person for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant):

(a)   the impact of the offence on other persons’ rights under this Act,

(b)   the market value of any water that has been lost, misused or unlawfully taken as a consequence of the commission of the offence,

(c)   the extent of the harm caused or likely to be caused to the environment (including, in particular, any water source or waterfront land) by the commission of the offence,

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

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

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

(g)   whether the offence was committed during a severe water shortage or an extreme event (that is, in contravention of an order in force under section 49A or 324),

(h)   the person’s intentions in committing the offence,

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

(j)   in the case of an offence of taking water in contravention of this Act, whether the water so taken had been released for environmental purposes and, if so, whether the person was aware of that fact,

(k)   any civil penalty that has been imposed on the person under section 60G in relation to the conduct from which the offence arises.

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

63. A sentencing court may not take facts into account adverse to the interests of the offender unless those facts have been established beyond reasonable doubt. However, if there are circumstances in favour of the offender that a court proposes to take into account, it is sufficient if those circumstances are established on the balance of probabilities (R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at 281).

64. The appropriate sentence for Payson is to be determined by an instinctive synthesis of all of the relevant objective and subjective circumstances (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).

65. Importantly, the sentence to be imposed on Payson for the commission of the offences must be proportionate to both the objective seriousness or gravity of the offences and Payson’s subjective circumstances (Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 at 490 and Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472).

Objective Seriousness of the Offences

66. The objective gravity of the offences fixes both the upper and lower limits of proportionate punishment. It fixes the upper limit insofar as the sentence must not exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances (Veen v The Queen (No 2) and Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at 354). It fixes the lower limit because allowance for the subjective factors of the case ought not produce a sentence which fails to reflect the objective gravity or seriousness of the offence (R v Dodd (1991) 57 A Crim R 349 at 354 and R v Nichols (1991) 57 A Crim R 391 at 395).

67. The objective seriousness is to be determined by reference to the nature of the offences and not by reference to matters that are personal to a particular offender (Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27]).

68. In determining the objective seriousness or gravity of the offences the relevant objective circumstances include: the nature of the offences; the maximum penalty under the Act creating the offences; the reasons for committing the offences; the environmental harm caused by the commission of the offences; the foreseeability of the risk of environmental harm caused by the commission of the offences; the practical measures that could have been taken to prevent environmental harm; Payson’s control over the causes giving rise to the offences; and Payson’s state of mind at the time of committing the offences.

Nature of the Offences

69. The nature and purpose of the provision that has been contravened, and its place in the statutory scheme, speak to the objective seriousness of an environmental offence (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 at [168]-[172]; Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [49] and Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [59]).

70. The relevant objects contained in s 3 of the WMA identify the purpose of creating the offences with which Payson has been charged:

3   Objects

The objects of this Act are to provide for the sustainable and integrated management of the water sources of the State for the benefit of both present and future generations and, in particular:

(a)   to apply the principles of ecologically sustainable development, and

(b)   to protect, enhance and restore water sources, their associated ecosystems, ecological processes and biological diversity and their water quality, and

(c)   to recognise and foster the significant social and economic benefits to the State that result from the sustainable and efficient use of water, including:

(i)   benefits to the environment, and

(ii)   benefits to urban communities, agriculture, fisheries, industry and recreation, and

(iii)   benefits to culture and heritage, and

(iv)   benefits to the Aboriginal people in relation to their spiritual, social, customary and economic use of land and water,

(d)   to recognise the role of the community, as a partner with government, in resolving issues relating to the management of water sources,

(e)   to provide for the orderly, efficient and equitable sharing of water from water sources,

(f)   to integrate the management of water sources with the management of other aspects of the environment, including the land, its soil, its native vegetation and its native fauna,

(g)   to encourage the sharing of responsibility for the sustainable and efficient use of water between the Government and water users,

(h)   to encourage best practice in the management and use of water.

71. In relation to these objects, in Harrison v Perdikaris [2015] NSWLEC 99 the Court observed that (at [46]-[47]):

46   There is a need for the upholding of the regulatory system under the WM Act. The system depends on persons, first, taking steps to ascertain when approval is required to carry out activities, including controlled activities on waterfront land, secondly, making application in the appropriate form and manner (including environmental impact assessment of the activity) and obtaining any approval so required before carrying out the activity and, thirdly, complying with the terms and conditions of any approval granted in carrying out the activity.

47   Offences which undermine the integrity of the regulatory system are objectively serious. Use of the criminal law ensures the credibility of the regulatory system.

72. To similar effect, the objects of the 2016 WSP contained in cl 9 of that instrument identify the following purposes of the plan:

9   Objectives

The objectives of this Plan are to:

(a)   protect, maintain and enhance the environmental values of the Gwydir Regulated River Water Source,

(b)   manage the Gwydir Regulated River Water Source to ensure equitable sharing of water between all uses,

(c)   protect the Gwydir Regulated River Water Source by ensuring that extraction minimises any adverse impacts,

(d)   improve water quality in the Gwydir Regulated River Water Source,

(e)   provide opportunities for ecologically sustainable market based trading of surface water entitlements in the Gwydir Regulated River Water Source,

(f)   manage the Gwydir Regulated River Water Source to preserve and enhance basic water rights,

(g)   ensure extraction from the Gwydir Regulated River Water Source is managed properly within the Murray-Darling Basin Ministerial Council Cap, and

(h)   manage the Gwydir Regulated River Water Source to preserve and enhance cultural and heritage values.

73. Offences against ss 91B(1) and 91I(1) of the WMA frustrate the attainment of the objects of that Act and those of the 2016 WSP, including the principles of ecologically sustainable development and the efficient and equitable sharing of water. The term “principles of ecologically sustainable development” is defined in the Dictionary to the WMA to mean “principles of ecologically sustainable development described in s 6(2) of the Protection of the Environment Administration Act 1991”, which includes the precautionary principle, intergenerational equity, the conservation of biological diversity and ecological integrity, and improved valuation, pricing and incentive mechanisms.

74. The prosecutor submitted that in relation to the meter offences, the nature of that conduct offended against the objectives of the WMA and the relevant offence provisions by subverting the objects of the statutory water management scheme. This was accepted by Payson. Likewise, I accept the prosecution’s submission.

73. The water management system established under the WMA and the 2016 WSP depends upon persons complying with the regulatory scheme when accessing water, including any requirement to use a properly operating meter. Adherence with the statutory regime is the price payable for entities to access an increasingly scarce resource in a manner that is environmentally and socially sustainable (Natural Resources Access Regulator v Tony Thompson [2022] NSWLEC 48 at [85]).

74. In Natural Resources Access Regulator v Maules Creek Coal Pty Ltd [2021] NSWLEC 135, Pain J observed that (at [174]):

174   Taking water that is not accounted for by the system under the WM Act undermines the purpose of the legislation. It circumscribes the ability of the regulator to deliver a scarce resource equitably and to effectively plan for a sustainable future. This impacts the environment. It undermines user confidence and public confidence in the system, at a time when community concerns already exist about the management of this valuable resource and of the impacts to water resources from development of the mine.

77. Payson took water while the meter was not operating properly and in doing so engaged in conduct that fundamentally undermined the ability of the regulator to manage a shared water resource for the benefit of the community and the environment.

78. In relation to the dam use and construction offences, the prosecutor contended that the nature of that offending undermined the regulatory scheme, albeit in a less serious manner, because the WMA relies upon persons complying with the requirements of the approval regime for water works to ensure the sustainable sharing of water resources (citing Perdikaris at [46]-[47]). However, unlike the meter offences, the commission of the dam use and the dam construction offences undermined the integrity of the approval scheme at a level of generality and did not materially impact upon the water sharing scheme on which the community relies.

79. Payson similarly accepted the prosecutor’s submission with respect to the nature of the dam use and the dam construction offences. I also accept the prosecutor’s characterisation of the nature of these offences.

80. The commission and use of water supply works without appropriate approval undermined the capacity of the regulator to ensure that water supply works are carried out in a manner that is compatible with the objects of the WMA and 2016 WSP.

Payson’s State of Mind During the Commission of the Offences

Payson’s State of Mind During the Commission of the Meter Offences

81. It is relevant in determining the seriousness of the commission of the meter offences to consider the state of mind of Payson at the time of their commission. Section 91I(1) of the WMA is not a strict liability offence. By pleading guilty to these offences, Payson has accepted that it knew, or had reasonable cause to believe, that the meter was not operating properly or at all.

82. The prosecutor submitted that Payson had actual knowledge that the meter was recording approximately half of the water taken during the offending period. Knowledge of the significant extent of the under-recording increases the objective seriousness of the meter offences and elevates the culpability of Payson’s conduct.

83. Payson argued that its knowledge of the under-recording was acquired through representations made to Barne by Wheildon. That is, Barne did not otherwise form an independent view as to the extent of the under-recording. Furthermore, Payson stridently rejected that the under-recording was by a factor of half, and moreover, that it knew that the under-recording was of this magnitude.

Wheildon’s Evidence as to the Under-recording

84. Wheildon deposed that Payson planted 147-150 ha of irrigated cotton crop in the 2016/2017 cotton season. The crop was planted on three fields commencing sometime between 20 October to 22 October 2016, and each field required approximately three days to be planted.

85. Wheildon stated that he learnt of a potential high flow event, that is, a flood event from the water source that allowed additional water to be taken under WAL 368, in August or September 2016 from other farmers (“the September 2016 high flow event”). Accordingly, he applied for an allocation of additional water through the WAS.

86. It was during the September 2016 high flow event that Wheildon initially had a “feeling” that the “meter may not have been working properly” because the meter read that 28 ML per day had been taken from the water source but dam 1 on Binneguy Station had already reached capacity, indicating that a greater volume of water had been taken than had been recorded (T71:35-39).

87. Consistent with his written evidence, Wheildon gave the following oral evidence (T96:07-16):

Q.   So you could see when you turned the pump on that there was more water than you would expect coming out of the sump?

A.   At this stage I already knew that there was more thing and it wasn't from this stage, it was from the very first pumping, when we put water in the dam and the dam we pumped 300 odd megs, that's where the initial, oh yeah, okay, well we've taken a lot more water. I mean, it was a known fact by this stage, as you can see by the texts.

Q.   But you didn't know by how much, did you?

A.   No.

88. Prior to the end of September 2016, dam 1 (which had a capacity of 900 ML) was full and flowing over the spillway into dam 2 (see emails sent between Barne and Wheildon during that period). Dam 2 had been empty prior to the September 2016 high flow event and only 313 ML of water had been recorded as having been pumped from the water source during that event. There was, therefore, more than double the amount of water in dams 1 and 2 than that recorded by the meter.

89. On 21 September 2016 Wheildon emailed Barne notifying him that water had spilled into dam 2 and that he estimated that they had access to approximately 900 ML of water from both dams. Wheildon also attached photographs of dam 1 to the email.

90. Wheildon also observed in his statement that:

31.   There were local rainfall events around the time of the high flow, but these were not significant as I remember there was little to no run off and would have not accounted for the amounts in the dams which was in excess of what the meter on the pump had recorded.

91. It was around this time that Wheildon arranged for Waterquip to attend Binneguy Station to fix an ant infestation affecting the meter screen. While Waterquip was on site Wheildon asked the technician to check that the correct parameters had been entered into the meter. The technician measured the pipe and indicated that the meter appeared to be working properly. The technician was not asked, however, to check, and did not check, the Doppler sensor in the pipe. At that stage, Wheildon did not know that the cause of the under-recording by the meter was the incorrect positioning of the Doppler sensor (T72:24-74:07).

92. Barne was away from Binneguy Station from 27 July to 4 October 2016. Upon his return, Wheildon expressed concerns to him about the meter under-recording:

30.   At the time I had the meter checked and repaired, George Barne was overseas. Upon his return I spoke with him and told him I had the meter checked for accuracy and the screen repaired. I expressed concerns to him that something was not right, as there was more water in the dam than what the meter said and that there was very little run off. I cannot remember the exact conversation word for word, but he was a bit disgruntled with me getting the Waterquip out to check the meter. He said something to the effect of ‘it must be alright now then? You must have miss calculated the amount of run off and that meter has been working fine for years.” I just left it at that and didn’t make a big issue out of it. I got the feeling from the discussion, not to push the point and that it was none of my business.

93. In a text message conversation between Wheildon and Barne dated 28 January 2017, the following was said:

Barne	Well make sure we record all these numbers and then we can look at options and cost/benefit analysis of keeping CAT, buying a fuel efficient Volvo or installing an electric motor and buying electricity reduce costs. Might be something we decide to do later if we get a lot of water in copeton and delay doing if we don’t have a lot of water in copeton.
Wheildon	My feeling in 60 is 32
Barne	I’d like to find out exactly how much our flow meter is out by otherwise we can’t calculate anything to base decisions on
Wheildon	You wouldn’t invest without water in dam but I would like it worked out even if you don’t pull trigger for a few years
Barne	Yes my thoughts exactly

94. Wheildon explained that the statement “my feeling in 60 is 32” meant that he had estimated that the meter was recording 32 ML per day when 60 ML per day was being pumped, but he acknowledged that such calculations were not easy to make (T94:30-95:15).

95. About halfway through the 2016/2017 cotton season, Wheildon recalled irrigating the crop by simultaneously pumping water from the dam and river pumps into the head ditch (“the simultaneous pumping event”). Wheildon knew from experience that the dam pump pumped at a rate of 50 ML a day and that it would run about 100-110 of the three-inch syphon pumps used at Binneguy Station to transfer water from the head ditch to the cotton crop. When he pumped the dam and river pumps simultaneously, Wheildon observed that he was able to run an additional 140 of the three-inch syphon pipes. This indicated that the river pump was operating at a greater rate than the dam pump, despite the meter-reading for the river pump showing a much lower rate.

96. Wheildon testified that because of the simultaneous pumping event he raised with Barne his concern that more water was being taken than was recorded by the meter and that it needed to be fixed.

97. According to Wheildon, Barne responded by threatening Wheildon:

38.   As a result of this I confronted George again about my concerns of taking more water than was recorded. I do not remember the conversation word for word, but he threatened me with my job and said something to the effect of, “You won’t work in this industry (or area) again, because you won’t get anything but fired and no reference by me, if you push this issue. You’ll be in as much trouble as me as you’re the one who ordered the water and pumped it. I don’t want to hear anything about it.” I also remember he said something like “If we fix the meter it will all of a sudden show that we are ordering twice as much water compared to the past couple of years and put us at risk of getting busted.” He went off on a few tangents. During this conversation he was yelling at me in a one way conversation and was very aggressive, being inches away from my face. I did not feel physically threatened, but felt that my career in the industry was under threat.

98. Furthermore, Barne made it clear not to email, text or talk to other people about the pump. He told Wheildon that there was to be “no paper trail, and that we’d both be in trouble”.

99. Under cross-examination Wheildon repeated that the conversation occurred. He maintained that a “long, in my face, yelling at me conversation” resulted from him raising concerns about the meter under-recording with Barne (T98:01-25). Wheildon did, however, acknowledge that his account of the confrontation appeared inconsistent with the collegiate text messages and email exchanges that occurred between him and Barne during the same period (T98:24-25).

100. His explanation for this inconsistency, and other inconsistencies between his oral evidence and contemporaneous text messages, was because he did not want his employment and reputation jeopardised (T113:22-39):

Q.   what he's going to say later about you, do you agree?

A.   Absolutely it will. If I say, I'm leaving because you're a water - you're, you're a thief and you're stealing water and all that, I mean, that's pretty much saying exactly what he told me not to say, otherwise I wouldn't get a reputation. So right back then when he churned me, I instantly knew that my whole career is on the, on the whims of George's thing. He made it quite clear. He threatened me, he told me that I would not get another job in the industry, face to face, abused me and all that. So I soon understood where George stood on the matter.

So from then on I made sure I didn't make the water an issue. I made sure that I followed company line. I thought I at least have to do at least two years, three years would be better. A good reference from George and then I can move on and put all this bad tempered and ill gotten things behind me. Okay, then it got this point and I thought, he's starting to click on because, you know, the few arguments and bringing up the water theft again and things like that. I got out of hand, I shouldn't have brought it up, but I did. So I was very concerned, okay.

101. During his oral evidence Wheildon repeatedly emphasised that he was concerned for his professional reputation in his dealings with Barne in respect of the meter under-recording.

102. By the end of the 2016/2017 cotton season, Wheildon thought “that we should have used twice as much water from the river than what” was recorded in Payson’s “Water NSW records”.

103. Wheildon deposed that Payson was more ambitious in the 2017/2018 cotton season and planted a cotton crop in all five irrigated fields at Binneguy Station, covering 250 ha.

104. On 30 August 2017 Wheildon emailed Barne outlining his expectations of water availability for that season:

Cotton country is also very dry will take 2 megs to water up. Without rain will have to drop 50 to 100 Ha out. Looking at water market talk to Moree Real estate no water available last lot sold for $300/meg.

We have 890 megs on license 100megs in dam.

Giving us around 1700megs for this years crop no rain throw growing season we will need 9-10megs/Ha giving us enough water for 180Ha of irrigation cotton this year without rain or buying water.

105. Wheildon explained how they prepared for the 2017/2018 cotton season:

57.   Whilst preparing for the 2017/2018 cotton year, I was working on planting 100Ha of solid irrigated cotton, which was the paddock from the winter cereal crop the year before and fallowing the 150Ha of the previous year’s cotton crop. George told me to prepare the whole 250Ha for irrigated cotton because he can buy water and get two for the price of one. When he said this I knew he was making reference to the water meter only reading fifty percent of the water it actually takes. I had learnt from previous experiences about this to keep my mouth shut and not say anything at this point in time.

58.   I then prepared 250Ha for irrigated cotton. I had calculated that the farm did not have enough water allocation to grow 250Ha of irrigated cotton, even with the meter taking double the amount it was recording. I estimated that we would need approximately two thousand five hundred mega litres of water to grow the 250Ha of cotton. I had made plans to drop one or two paddocks from planning if we did not have a big rain event or could not purchase more water than what we had. As it happened, we did have a rain event and George bought 200ML of water at some stage during the winter season.

106. According to Wheildon, Barne directed him to create a fabricated water budget for the 2017/2018 cotton season:

60.   I advised George that I cannot make an accurate calculation due to the meter only taking about fifty percent of what it actually was taking. George said something to the effect of fabricating the on farm figures to allow for the extra unmetered water that was going to be taken.

…

64.   To cover up the water theft, George suggested that I make false entries in the columns with the heading “Water Left After Irrigation On Farm” and “Copton Dam” If you look immediately above the line that is dated 8/12/17, it shows an amount of “960” in the column headed “Water Left after Irrigation On Farm”. This is falsified, in actual fact there was no more than 100ML of water in the dam prior to the first watering event on 8/12/17.

65.   I advised George that we would need at least two thousand mega litres of water to grow the 250Ha, plus a preseason rain event to have a full profile of soil moisture.

66.   After George telling me he was getting two for the price of one, he commented that he only really needed to have an allocation of one thousand mega litres to have the confidence to plant the whole 250Hs, as for every mega litre being recorded on the meter, he was getting about two mega litres on the farm.

107. He repeated the allegation in his oral evidence (T104:10-16):

Q   I’m suggesting to you that George did not say anything to you about fabricating the figures in that document, do you agree?

A   No, like he was well - yeah it was all directed by George to produce that document. Like he was - I, I was holding back off doing it, you know, like I was verbally talking about it and that. Because once you start falsifying documents, even though it was just within the company, it’s still a tarnish on your reputation and your career. Like water theft is very frowned upon in that cotton industry.

108. Around December 2017 or January 2018 Wheildon installed a flapper valve on the pipe, and in doing so moved the Doppler sensor. Wheildon gave evidence that in order to carry out these works, he researched the proper functioning of the Doppler sensor. He therefore knew that the Doppler sensor, which was at a 45 degree angle, was incorrectly positioned. Accordingly, he moved it further into its correct position.

109. Wheildon gave evidence that when he told Barne that he had corrected the positioning of the Doppler sensor, Barne told him to return it to its previous position:

94.   I don’t remember exactly what day it was, but it would have been the next time I saw George, who was currently living on the property and told him that I had reinstalled the dopler device to the new location. I also told him that I now knew how the water was being stolen through the meter. He told me he hoped that I had set it up exactly the same as it was I said, “If you want it that way, you will have to go and change it. I have put it in right.” He said something to the effect of “It doesn’t matter how it is in now, you have always known that it was being taking water incorrectly and go fix it back up.”

110. During oral evidence Wheildon stated (T106:38-47):

Q   He did not tell you anything about how the meter sensor might be moved?

A.    His instructions were to move it to a location and then set it up exactly the same way as it was, make sure that it's marked and, you know, moved identical.

Q   I suggest he did not tell you to leave it how it was, do you agree?

A   To your suggestion?

Q   Yes?

A   No, I agree with what I said.

111. According to Wheildon, the next time he used the river pump it was pumping at a rate of 22 ML per day indicating that the Doppler sensor had been moved back to an incorrect position:

95.   I refused to go back and fix it however the next time I started the pump, it was running back around 22ML per day.

96.   It was at this point in time that I decided I could no longer work for George Barne due to his practices around taking water which I thought was wrong and illegal. I could not turn a blind eye to this anymore as I have worked on farms that have been at the end of a river system where water has not arrived to me because someone further up the system had taken the water illegally and as a result, I lost of large percentage of yield due to crop stress brought on by a lack of water.

97.   Around the 11 January 2018 I verbally advised George that I would be resigning as farm manager and leaving the property. I did tell him that I would stay to the end of the season so that he could get his harvest done, so that I would meet my legal obligations with the Bolgard III licence.

112. In summary, it was Wheildon’s evidence that he became aware of the meter under-recording from the first pumping event of the 2016/2017 cotton season onwards, and that shortly thereafter he informed Barne of this fact. Payson did not, however, rectify the under-recording. Rather, it continued to engage in cotton crop cultivation knowing that the meter was under-recording. This resulted in an increased crop size for the 2017/2018 cotton season.

Consistency in Sentencing

282. The task of the sentencing court is to seek even-handedness in the imposition of a sentence (R v Oliver (1980) 7 A Crim R 174 at 177 and R v Visconti [1982] 2 NSWLR 104 at 107). However, care must be taken in achieving consistency. There is always difficulty comparing the penalty in one case with that in another because of the wide divergence of facts and circumstances in each case (Axer at 365). The sentence imposed in a single case does not demonstrate the limits of a sentencing court's discretion (Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280;(2001) 115 LGERA 304 at [312] and Environment Protection Authority v Barnes [2006] NSWCCA 246 at [79]).

283. The prosecutor submitted that there is no identifiable pattern for sentencing for offences against ss 91I(1)(b) or 91B(1) of the WMA and that there are no previous decisions of the Court that have sufficient factual similarity to provide the Court with any meaningful assistance in the present proceedings.

284. Nonetheless, the Court has had regard to four particular cases. The Court has exercised caution when considering these cases as they involved different offences under the WMA (Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90 at [70]). The cases are summarised below:

1. in Thompson, the defendant was sentenced for two offences against ss 60A(4) and 91I(2) of the WMA: first, for taking water otherwise than as authorised by his WAL; and second, for taking water without an operating water meter. A further offence was taken into account through a Form 1 pursuant to s 32 of the CSPA. The commission of the offences caused actual harm by undermining the consistent administration of the WMA. There was insufficient evidence to find that Thompson had committed the offences recklessly. Both offences were held in the low range of objective seriousness for offences of that kind. Mitigating factors included the fact that Thompson had demonstrated genuine remorse, had provided assistance to the regulatory authorities, had no prior criminal record and had good prospects of rehabilitation. The Court held that Thompson had pleaded guilty at the earliest opportunity and was entitled to the full 25% discount. Thompson was fined $57,500 for both offences and ordered to pay half of the penalty to the prosecutor. The Court also made a publication order and ordered Thompson to pay the prosecutor’s costs;

2. the defendant was charged with two offences against s 91I(2) and one offence against s 336C(1) of the WMA in Barlow. The former offences involved taking water by means of a metered work when metering equipment was not operating properly and the latter offence involved failing to comply with a direction given under Pt 1 of Ch 7 of the WMA. Barlow ultimately pleaded guilty to the charges on the first day of the trial. As a result, he was afforded a 12.5% discount for the utilitarian value of his plea. His offending conduct was considered to be contrary to the objects of the WMA, including the principles of ecologically sustainable development. The Court held that he had committed the s 336C(1) offence recklessly and that the agricultural activities for which water was taken were for the benefit of Barlow’s business. Barlow did not have any prior convictions for any environmental offences and was otherwise of good character. He demonstrated remorse, accepted responsibility for his actions, and endeavoured to make reparation for the harm occasioned by the offending conduct. The objective seriousness of the s 91I(2) offences was considered to be in the mid-range but was low for the s 336C(1) offence. Barlow was fined $48,726, $54,140 and $86,625, respectively, for each offence. He was also ordered to pay costs;

3. Budvalt concerned a contravention of s 91B(1) of the WMA by Budvalt Pty Ltd (“Budvalt”). Budvalt constructed and used a channel to convey water from the Macquarie River for irrigation purposes without approval to do so. Budvalt pleaded guilty on the first day of the trial attracting a discount of 10%. Budvalt had no prior convictions. Although Budvalt was considered to be of good character because it had contributed to the cotton-growing industry, Moore J afforded this fact only modest weight because there was evidence that the activities of the company contained an element of corporate self-interest and were motivated by commercial benefit. Budvalt showed no sorrow or remorse. Budvalt was fined $252,000, with a moiety of 50% to be paid to the prosecutor. A publication order was made; and

4. Natural Resources Access Regulator v Bao Lin Pty Ltd [2022] NSWLEC 42 concerned the sentencing of a corporation for four offences against ss 91E(1) and 345(2) of the WMA insofar as the defendant carried out a controlled activity on waterfront land without an approval and harmed waterfront land by constructing an unauthorised dam. The Court held that each of the offences were in the moderate range of objective seriousness because they were, or were likely to have caused, harm to the environment, including to aquatic species. However, the offending conduct was committed unintentionally by workers that were not aware of the legal requirements under the WMA. Mitigating factors included that the defendant had no prior convictions, had pleaded guilty early and had assisted the authorities. The company also demonstrated remorse and took responsibility for its offending conduct. In all of the circumstances, the Court imposed a total fine of $250,800 and ordered that the defendant undertake steps to prevent, control, abate and mitigate the harm caused by the commission of the offences.

285. The meter offences before the Court are, in my opinion, more objectively serious than in the authorities reviewed above. The dam use and construction offences are, however, comparable. Many of the subjective circumstances in mitigation present in this case were also relevant factors in the determination of an appropriate penalty in Thompson, Barlow, Budvalt and Bao Lin.

Capacity to Pay a Fine

286. Section 6 of the Fines Act 1996 provides that:

6   Consideration of accused’s means to pay

In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider––

(a)   such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and

(b)   such other matters as, in the opinion of the court, are relevant to the fixing of that amount.

287. The offender’s capacity to pay is one of many factors that the Court must consider. In Environment Protection Authority v Hanna [2018] NSWLEC 80, Preston J stated (at [267]):

267   However, whilst the means of an offender to pay any fine is a mandatory consideration, it may not be decisive. Other sentencing considerations, such as achieving general deterrence, may justify imposing a fine in a certain amount, even if the offender is unlikely to be able to pay the fine: Smith v The Queen at 23, 24; Darter v Diden (2006) 94 SASR 505; [2006] SASC 152 at [29]-[32]; Mahdi Jahandideh v R [2014] NSWCA 178 at [15]-[17]. This may particularly be the case in sentencing for offences where general deterrence is needed and where the offender is a corporation rather than a natural person: see Environment Protection Authority v Capdate Pty Ltd (1993) 78 LGERA 349 at 353; Environment Protection Authority v Emerald Peat Pty Ltd (in liq) [1999] NSWLEC 147; Environment Protection Authority v Douglass (No 2) [2002] NSWLEC 94 at [16]; Bentley v BGP Properties Pty Ltd at [270]-[275].

288. In Environment Protection Authority v Albiston [2020] NSWLEC 80, the Court considered whether the evidence was sufficient to demonstrate that the defendant had no capacity to pay any likely fine. The Court held that (at [184]):

184   The evidence adduced by Mr Albiston is incomplete and does not give a comprehensive picture of his financial position. I do not consider that Mr Albiston has discharged his onus of proving that he is unable to pay whatever monetary penalty that the Court is likely to impose.

289. Payson asserted that its financial position was perilous. It further submitted that the offences the subject of these proceedings arose from conduct in 2016 to 2018, and despite Wheildon notifying the prosecutor of the offending conduct in mid-2018, the prosecutor did not commence proceedings until April 2021. The delay has not been explained.

290. According to Payson, the passage of time between the commission of the offence and the sentence hearing gave rise to considerations of fairness in the determination of the appropriate sentence, requiring what might otherwise be an undue degree of leniency being extended to the defendant (R v Todd [1982] 2 NSWLR 517 at 519 endorsed in Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 at 66). There was a correlation between the delay and Payson’s diminished capacity to pay a fine that should therefore be taken into account by the Court.

291. Payson adduced evidence of its financial position in the first and second Barne affidavit, namely, that:

1. Payson’s financial statement for 2020/2021 prepared by C & W Financial Services, showed that Payson had net profits of $813,120 and $354,748 for the 2016/2017 and 2017/2018 financial years, respectively;

2. that by the end of the 2020/2021 financial year, Payson’s financial position had deteriorated and its net assets totalled $77,288; and

3. the “Profit & Loss Statement Henry Payson Pty Ltd Projected Profit (Loss) as at 30/06/2022” prepared by C & W Financial Services, projected that Payson will make a loss of $874,872 in the 2021/2022 financial year.

292. The prosecutor submitted that the Court should not reduce the penalty amount that it would otherwise see fit to impose upon Payson because:

1. the evidence did not establish Payson’s impecuniosity. First, the financial statements furnished to the Court were special purpose reports for the sole purpose of distribution to the company’s members with no relevant accounting standard applied to them. Second, Payson’s financial position in 2021/2022 was a result of regulatory notice issues and was therefore not an accurate reflection of the company’s overall financial capacity. Third, the depreciation schedule contained in the 2020/2021 financial statement indicated that Payson has assets valued at $684,548. Fourth, the amount nominated for farming expenses in the 2021/2022 estimate was anomalously high compared to the farm expenses recorded in previous financial statements;

2. the forecasted loss for the 2021/2022 financial year did not establish that Payson had no means of paying a fine. Importantly, it did not establish that the farming business at Binneguy Station was not viable;

3. the Court was not provided with any of Payson’s bank statements or tax returns;

4. the consideration of means to pay also includes whether Payson can obtain a loan and there was evidence before the Court that Barne has substantial assets and had previously acted as guarantor for a loan of $2,000,000 from the National Australia Bank in favour of Payson. Notably, Barne has in excess of $10,000,000 equity in Binneguy Station and an unspecified equity in WALs worth several million dollars (T218:13-20). Barne estimates that the current value of Binneguy Station is $15,000,000; and

5. the circumstances of the offending conduct are such that the Court should ensure that the fine serves an adequate general and specific deterrent, even if the quantum of that fine is beyond the capacity of Payson to pay (citing Smith v The Queen (1991) 25 NSWLR 1 at 23-24 and Darter v Diden [2006] SASC 152; (2006) 94 SASR 505 at [29]-[31]).

293. In reply, Payson submitted that none of its evidence with respect to its financial position was the subject of objection by the prosecutor and that Barne was not cross-examined on the financial position of Payson, despite being the company’s sole director. It would therefore be unfair of the Court to reject the financial evidence provided by Payson. Payson also rejected the submission that its capacity to obtain a loan to pay a fine was material.

294. Payson further argued that the financial information before the Court showed that Payson would only be able to pay a nominal fine and the partial costs of the prosecutor. It emphasised that it was a small farming enterprise, operated by one individual at Binneguy Station.

295. The standard imposed by s 6 of the Fines Act is a high one and the onus is on Payson to prove, on the balance of probabilities, that it is unable to pay any monetary penalty imposed by the Court. To discharge this onus, Payson must provide all relevant financial information that is reasonably and practically available to it to the Court in order to demonstrate the state of its asserted impecuniosity (see Albiston at [183]-[184]). It has not done so.

296. Although the prosecutor did challenge Payson’s financial statements, he was not obliged to do so in light of the onus on Payson. The evidence before the Court is not sufficient. The Court has not been furnished with, for example, Payson’s bank statements, tax returns, or any property title searches.

297. I therefore do not find that Payson is unable to pay whatever monetary penalty the Court is likely to impose.

Costs

298. The prosecutor sought an order for his professional costs as agreed or assessed pursuant to ss 257B and 257G of the Criminal Procedure Act 1986 (“CPA”). He estimated his professional costs to be $700,000 and its investigative costs are fixed in the sum of $2,374 (T375:17-24).

299. Payson submitted that the Court should apportion costs, and that it was not liable for the entirety of the prosecutor’s professional costs because:

1. it would be unfair to be exposed in a criminal proceeding to the prosecutor’s costs which have been incurred by the prosecutor seeking to prove factual matters that it simply could not prove, namely, the extent that the meter was under-recording by (T368:40-44);

2. in other jurisdictions defendants do not routinely pay costs in criminal matters; and

3. the Court has power, pursuant to s 257B of the CPA, to either reserve costs or otherwise fix a certain amount in costs. Section 257B of the CPA states as follows:

257B   When costs may be awarded to prosecutor

A court may, in and by a conviction or order, order an accused person to pay to the registrar of the court, for payment to the prosecutor, such costs as the court specifies or, if the conviction or order directs, as may be determined under section 257G, if—

(a)   the court convicts the accused person of an offence, or

(b) the court makes an order under section 10 of the Crimes (Sentencing Procedure) Act 1999 in respect of an offence.

300. In the result, on contested matter of fact the Court has made findings favouring the prosecutor. It would be inappropriate not, as an exercise of the Court’s discretion, to award the prosecutor all of its costs in the circumstances. In addition, even if the Court were to accept the submission that the prosecutor engaged in unreasonable delay in bringing the prosecution, which it did not, in my view, given that the prosecution was commenced within time, the evidence does not establish a causal nexus between the delay and any deterioration on Payson’s financial position.

301. Finally, while the Court retains a discretion to award the prosecutor its costs, such orders are routinely made upon conviction for the commission of environmental crimes in this Court.

302. However, in the exercise of its sentencing discretion, the Court takes into account the costs payable (Harris at [100]; Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58 at [123] and Barnes at [78]-[88]). In doing so, the Court must be mindful that the payment of the prosecutor’s costs is not a reason for reducing any penalty to be imposed in a particular case to less than that suggested by the general pattern of sentencing for the relevant offence (Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170 at [50]).

303. In the circumstances, it is appropriate to make an order that Payson pay the prosecutor’s professional costs as agreed or assessed and its fixed investigation costs.

Appropriate Sentence

304. Having regard to the objective seriousness of the offences and the mitigating subjective factors of Payson, together with the penalties imposed in the relevant comparable cases, I find that the imposition of a monetary penalty is warranted for each offence as follows:

1. for the first meter offence a fine of $200,000;

2. for the second meter offence a fine of $250,000;

3. for the dam use offence a fine of $50,000; and

4. for the dam construction offence a fine of $50,000.

305. Each penalty must be discounted by 12.5% for the utilitarian value of Payson’s early plea of guilty resulting in the imposition of a monetary penalty for each offence as follows:

1. for the first meter offence a fine of $175,000;

2. for the second meter offence a fine of $218,750;

3. for the dam construction offence a fine of $43,750; and

4. for the dam use offence a fine of $43,750.

306. After the application of the totality principle, the penalty for the commission of the second meter offence should be reduced to $125,000.

307. After the application of the totality principle with respect to the dam offences, the penalty for the commission of the dam use offence should be reduced to $10,000.

308. This brings the total penalty for the meter offences to $300,000 and for the dam use and construction offences to $53,750.

Moiety

309. The prosecutor contended that half of all monetary penalties imposed pursuant to s 122 of the Fines Act 1996 in these proceedings ought to be paid to him because of the costs incurred in investigating the offences. Having regard to all of the circumstances of this case I consider it appropriate.

Publication Order

310. The NRAR sought a publication order pursuant to s 353G(1)(a) of the WMA.

311. Payson resisted a publication order being made on the basis that it would humiliate both Barne and Payson, and amount to a further penalty imposed on Payson.

312. In the context of the purposes of sentencing, a publication order serves the functions of general deterrence, denunciation and a recognition of the harm caused by the offending (Environmental Protection Authority v Bartter Enterprises Pty Ltd (No 4) [2021] NSWLEC 45 at [105]).

313. In Ditchfield Preston J emphasised that the primary purpose of publicising the detection, prosecution and punishment of environmental offenders is to enhance general deterrence (at [76]). His Honour observed that by the public becoming aware of offending conduct, individuals and companies will be deterred from committing environmental crimes (see also Environment Protection Authority v Dyno Nobel Asia Pacific Pty Ltd [2017] NSWLEC 64 at [163]-[165]).

314. Payson’s offending conduct occasioned actual harm to the regulatory scheme, impacting upon public trust in the efficacy of that scheme and on its efficient administration. A publication order not only serves as a deterrent to others, but affirms to the community that relies upon the statutory water sharing scheme that it is being appropriately administered to maintain its integrity.

315. In light of the important deterrent function of a publication order, I am of the opinion that the making of such an order in the terms attached at annexure ‘A’ is warranted. In reaching this conclusion I have taken into account any distress and embarrassment that the making of a publication order may have on Barne personally, especially in light of his mental health issues. However, on balance, I am of the view that the deliberate and reckless nature of the commission of some of the offences warrants the making of a publication order. I note that only Payson will be named in the publication.

Meter Compliance Checks

316. Finally, the prosecutor sought an order pursuant to s 353B(c) of the WMA that Payson must, by 31 August 2022, 31 August 2023 and 31 August 2024, at its own expense, cause the meter to be validated by a duly qualified person within the meaning of the WMA and to obtain a certificate from that qualified person to be provided to the prosecutor.

316. Payson opposed such an order for the following reasons:

1. the Court should not make such an order unless it is satisfied beyond reasonable doubt that it is necessary to prevent a recurrence of the offence. The Hunt affidavit states that the meter has been replaced and checked by Hunt indicating that the risk of a recurrence of the commission of the meter offences is low. Furthermore, Barne has taken measures to ensure that Payson does not commit any similar offences in the future;

2. the meter at Binneguy Station is currently not in use because of stop work orders and other directions issued by the NRAR. There is, therefore, a risk that an order pursuant to s 353B(c) of the WMA imposes an obligation upon Payson that it will not be able to meet and could expose it to criminal penalties; and

3. Payson remains obligated to comply with the regulatory regime by the function of the WMA. This amounts to a sufficient deterrent without imposing additional obligations upon Payson to have the meter checked.

318. In light of the Hunt affidavit and the evidence before the Court that a new meter has been installed at Binneguy Station, I am not satisfied that an order under s 353B(c) of the WMA as sought by the prosecutor is warranted and I decline to make it.

Orders

319. In conformity with the reasons given above, the Court makes the following orders:

In proceeding 117758 of 2021

1. Henry Payson Pty Ltd is convicted of the offence against s 91I(1)(b) of the Water Management Act 2000 as charged in the amended summons filed 19 April 2022;

2. Henry Payson Pty Ltd is to pay a fine in the sum of $175,000;

In proceeding 117770 of 2021

1. Henry Payson Pty Ltd is convicted of the offence against s 91I(1)(b) of the Water Management Act 2000 as charged in the amended summons filed 19 April 2022;

2. Henry Payson Pty Ltd is to pay a fine in the sum of $125,000;

In proceeding 117797 of 2021

1. Henry Payson Pty Ltd is convicted of the offence against s 91B(1) of the Water Management Act 2000 as charged by the summons filed 27 April 2021;

2. Henry Payson Pty Ltd is to pay a fine in the sum of $10,000;

In proceeding 117798 of 2021

1. Henry Payson Pty Ltd is convicted of the offence against s 91B(1) of the Water Management Act 2000 as charged by the summons filed 27 April 2021;

2. Henry Payson Pty Ltd is to pay a fine in the sum of $43,750;

In proceedings 117758, 117770, 117797 and 117798 of 2021

1. pursuant to s 122(2) of the Fines Act 1996, 50% of each of the fines imposed under the preceding orders is to be paid to the prosecutor;

2. pursuant to s 257B of the Criminal Procedure Act 1986, Henry Payson Pty Ltd is to pay the prosecutor’s costs as agreed or assessed under s 257G of that Act;

3. pursuant to s 353E(1) of the Water Management Act 2000, Henry Payson Pty Ltd is to pay to the investigation costs fixed in the amount of $2,374;

4. pursuant to s 353G(1)(a) of the Water Management Act 2000, Henry Payson Pty Ltd must, within 28 days of this order, at its own expense, cause a notice to be published in the terms of annexure ‘A’ to this order in the digital and print versions of the following publications at the minimum size specified below within the first 12 pages of the print version:

   1. The Land (10 cm x 18.6 cm);

   2. The Moree Champion (18.6 cm x 12.9 cm); and

   3. The Australian (10 cm x 18 cm);

5. within seven days of the date of publication of the notice in accordance with the preceding order, Henry Payson Pty Ltd must provide to the prosecutor a copy of the entire page of the publication in the print version of each publication and screenshot of the entire page of the publication in the digital version of each publication in which the notice appears;

6. the exhibits are to be returned; and

In proceedings 117759, 117760, 117761, 117762, 117763, 117764, 117765, 117766, 117767, 117768, 117769, 117771, 117772, 117773, 117774, 117775, 117776, 117777, 117778, 117779, 117780, 117781, 117782, 117783, 117784, 117785, 117786, 117787, 117788, 117789, 117790, 117791, 117792, 117793, 117794, 117795, 117796, 117799 and 117800 of 2021

1. the Court notes that in proceedings 117759, 117760, 117761, 117762, 117763, 117764, 117765, 117766, 117767, 117768, 117769, 117771, 117772, 117773, 117774, 117775, 117776, 117777, 117778, 117779, 117780, 117781, 117782, 117783, 117784, 117785, 117786, 117787, 117788, 117789, 117790, 117791, 117792, 117793, 117794, 117795, 117796, 117799 and 117800 of 2021 the summonses are withdrawn by the prosecution.

   Annexure ‘A’

Henry Payson Pty Ltd (“Payson”) was convicted and fined in the Land and Environment Court of New South Wales (“the Court”) on 31 January 2023 for two offences against s 91I(1) and two offences against s 91B(1) of the Water Management Act 2000 (“the WMA”). The offences related to knowingly taking water from the Gwydir Regulated River water source when its metering equipment was under-recording the water being taken and to constructing and using a dam to store water for the purposes of irrigating cotton crops without holding the required approval to do so.

Following an investigation by the Natural Resources Access Regulator (“NRAR”), Payson was prosecuted in the Court. It pleaded guilty to the four charges. It was fined a total of $353,750 and ordered to pay the NRAR’s professional costs as agree or assessed and investigation costs fixed in the sum of $2,374.

All property owners, companies and water users should be aware of the serious consequences for committing offences against the WMA. The NRAR undertakes ongoing auditing and investigations to ensure that the recording of the volume of water taken by licence holders is accurate, and that water management works are authorised by means of approval, so as to ensure the equitable sharing of water from water sources and the protection of water sources, their associated ecosystems, ecological processes and biological diversity and their water quality, in accordance with the objects of the WMA.

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Decision last updated: 31 January 2023