Resourceco Pty Ltd v Harvey - [2007] SASC 38

SUPREME COURT OF SOUTH AUSTRALIA
(Land and Valuation Division)
RESOURCECO P/L v HARVEY
[2007] SASC 38
Judgment of The Honourable Justice Debelle
16 February 2007
ENVIRONMENT PROTECTION
Waste recycling depot - dust pollution - failure to comply with condition of licence permitting the waste recycling - failure to comply with environment protection order - two offences - whether penalty imposed for each offence was manifestly excessive - whether the totality principle was applied - appeal dismissed.

ENVIRONMENT AND PLANNING - COURTS AND TRIBUNALS WITH ENVIRONMENT JURISDICTION - SOUTH AUSTRALIA - SUPREME COURT - RIGHT OF APPEAL
Whether appeal from criminal jurisdiction of Environment Court should have been heard by the Full Court.
Criminal Law (Sentencing) Act 1982 s 18A; Environment Protection Act 1993 s 45(5), s 93(8), s 127(1)(a), s 132; Environment Resources and Devlopment Court Act 1993 s 30(1), s 30(2), s 30(4), referred to.
Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; Mill v The Queen (1988) 166 CLR 59; R v Knight (1981) 26 SASR 573; R v Smith & Shoesmith (1983) 32 SASR 219; R v Sgroi (1989) 40 A Crim R 197, applied.
Harvey v BRL Harvey Ltd [2003] SAERDC 57; Harvey v The Hamilton Wine Group Pty Ltd [2002] SAERDC 23; Harvey v Kangaroo Island Council [2004] SAERDC 63; Harvey v Rural City of Murray Bridge [2004] SAERDC 32, considered.

RESOURCECO P/L v HARVEY
[2007] SASC 38
Land and Valuation Division

DEBELLE J. This is an appeal against fines imposed by a judge of the Environment Resources and Development Court (“the Environment Court”) for breaches of the Environment Protection Act 1993 (“the Act”).
The appellant Resourceco Pty Ltd (“Resourceco”) holds a licence pursuant to Part 6 of the Act. A licence is a form of environmental authorisation. The licence authorises Resourceco to conduct a waste or recycling depot at Wingfield Road, Wingfield. The licence is subject to conditions. Resourceco receives demolition waste at the site and processes it for use as a base for road construction and the like. The term of the licence the subject of the complaint is from 1 September 2005 to 28 February 2006. Resourceco has held a licence authorising it to conduct a waste or recycling depot since December 2002.
Breaches of an Environmental Authorisation
On 3 November 2006 Resourceco pleaded guilty to two offences against the Act. The first offence was that, being the holder of an environmental authorisation, it contravened a condition of that authorisation contrary to s 45(5) and s 127(1)(a) of the Act. Condition 7 of the licence held by Resourceco provides that it must ensure that the height of raw and processed materials stockpiled at its premises is no greater than the stabilised raised earth bank established around the perimeter of the premises. For convenience, I will call the earth bank “the raised bank”. The raised bank is a means of reducing the emission of dust from the premises of Rescourceco. Resourceco pleaded guilty to allowing the raw and processed material stockpiled at the premises on 12 October 2005 to exceed the height of the raised bank.
The second offence was that Resourceco had contravened an environment protection order contrary to s 93(8) of the Act. On 13 May 2004 the Environment Protection Authority had issued an environment protection order to Resourceco requiring it within 28 days to reduce the height of the stockpiled material to a height no greater than the height of the raised bank surrounding the site and to maintain it at a height no greater than the height of the raised bank. Resourceco failed to comply with the terms of that order. The maximum penalty for each of these offences is a fine of $120,000.
The Penalty
For the first offence, the judge fined Resourceco $28,800 and costs. For the second offence the judge fined Resourceco $33,600. Resourceco appeals against both penalties on the ground that each is manifestly excessive. It contends that a lesser penalty should have been imposed in respect of the first offence and that the appropriate penalty for the second offence was to record a conviction without penalty.
Environmental Protection Orders Issued
These offences followed a series of environment protection orders which had been issued by the Environment Protection Authority (“the Authority”) to Resourceco.
·In February 2003 officers of the Authority inspected the site and noticed that the stockpile was higher than the raised bank. The fact was drawn to the attention of an officer of Resourceco.
·On 17 June 2003 Mr Blunt, an officer employed by the Authority, visited the site and saw that the stockpile on the southern and eastern boundaries was higher than the raised bank. He issued an environment protection order to Resourceco requiring it within 28 days to reduce the height of the stockpile to comply with its licence.
·On 16 August 2003 Mr Blunt visited the site again and saw that Resourceco had reduced the height of its stockpile and was complying with the terms of its licence.
·On 15 January 2004 Mr Blunt made another inspection of the site. The stockpile then exceeded the height of the raised bank. On 19 January Mr Blunt issued another environment protection order requiring Resourceco within 28 days to reduce the height of the stockpile and comply with its licence.
·On 11 May 2004 Mr Blunt again inspected the site and saw that the stockpile exceeded the height of the raised bank. On 13 May 2004 the Authority issued another environment protection order to Resourceco requiring it within 28 days to reduce the height of the stockpile and so comply with its licence. The notice required Resourceco to maintain the height of the stockpile at a height no greater than the height of the raised bank. This is the order the subject of the second offence.
·On 17 November 2004 Mr Blunt inspected the site and noted that the stockpile was higher than the raised bank. He issued an expiation notice for failure to comply with the environment protection order.
·The Authority made further inspections of the site on 17 February 2005, 24 June 2005, 2 August 2005 and 12 October 2005. On each occasion the height of the stockpile exceeded the height of the raised bank. A further expiation notice was issued on 24 June 2005.
At the inspection on 12 October 2005 a surveyor measured the height of the stockpile. It was 10 metres higher than the top of raised bank. Submissions as to penalty were heard on 27 October 2006. The parties agreed that on that day the height of the stockpile was in the order of two to three metres above the raised bank.
Complaints About Dust
The Environment Court was informed that the Authority had received many complaints in relation to dust emissions from the site. Since December 2002, 21 complaints have been made by facsimile, 100 by telephone and 43 by email. Several engineering firms conduct their businesses near the site. Those businesses use powder coating. Those businesses had complained that the dust affects the quality of their product and diminishes the amenity of their working environment. It is common ground that, although Resourceco site is one of the sources of dust in the area, it is not the only source. It was not alleged that any environmental harm had resulted from the breaches of the Act.
Contractual Difficulties
Counsel for Resourceco informed the Environment Court, among other things, that from 1999 until April 2004 Resourceco had had an agreement with Readymix by which Readymix would distribute Resourceco’s product. The agreement was renewed in April 2004 and continued until early 2005. It then became apparent that a lesser volume of material was being sold by Readymix. This led to Resourceco increasing the height of the stockpile. Because of the terms of its contract with Readymix, Resourceco was unable to attempt to sell its product to the customers of Readymix except by incurring a penalty. A dispute between Readymix and Resourceco ensued. Notwithstanding negotiations to resolve that dispute, which had begun in January 2006, the contract was terminated in May 2006. Resourceco then had to develop a marketing and selling strategy to sell its product. It agreed to buy back the stockpile being stored for Readymix at a price of $1.7m. Resourceco had to borrow money to buy back the stockpile. It is paying $10,000 per month to service the loan. Resourceco has incurred other costs as a result of the fact that it must now sell its material directly to the market. Resourceco had discounted its price in an attempt to boost its sales. Notwithstanding its efforts, the stockpile was some two to three metres higher than the raised bank on 27 October 2006. Resourceco had also sought by various means to reduce the amount of material coming on to the site. It was submitted that Resourceco had spent about $630,000 in an effort to reduce the height of the stockpiled material. However, most of that would have had to have been spent in any event for commercial reasons. A fence had been installed on top of the raised bank to reduce the visual prominence of the stockpile. In addition, Resourceco had recently purchased land in close proximity to its site which could be used to stockpile material.
Two Separate Breaches
As the judge noted, Resourceco had committed two distinct breaches of the Act. The first was a contravention of a condition of the licence held by Resourceco. The second was a contravention of an environment protection order. It is clear from the terms of the Act and in particular in s 93 that the purpose of an environment protection order is to provide a mechanism to secure compliance with, among other things, a condition of an environmental authorisation. Its purpose is, not only to draw the attention of the holder of the licence to the facts which constitute the breach, but also to require the breach to be rectified. The judge said:
The failure to comply with an environment protection order is a serious matter and warrants a separate penalty from the breach of the licence condition.
I agree with that proposition.
When assessing the penalty the judge took into account the following factors:
·Resourceco had pleaded guilty at the earliest practical opportunity.
·Resourceco had fully co-operated with the investigation by the Authority.
·No environmental harm had resulted from the breaches by Resourceco of the Act.
·The apology offered by Resourceco through its counsel and the contrition expressed on its behalf.
·The context in which the offending had occurred and the efforts made by or on behalf of Resourceco in recent months to attempt to achieve compliance with the licence.
The judge observed that neither offence was the most serious breach of its kind but, at the same time, neither was the least serious. She took the view that Resourceco had placed its financial interests ahead of its obligation to comply with its licence and with the terms of the environment protection order. This had resulted in it being unable to comply with both. That finding was not challenged on appeal.
For the first offence, the judge said that, but for the plea of guilty, she would have ordered a fine of $36,000, about 30 per cent of the maximum penalty. She reduced that fine by 20 per cent to reflect the early plea of guilty and the expression of contrition and the efforts to make the site comply with the terms of the licence. This resulted in a fine of $28,800. On the second offence, the judge said that, but for the plea of guilty, she would have imposed a fine of $42,000. She reduced that by 20 per cent for the early plea of guilty and the other factors just expressed, resulting in a fine of $33,600. The total penalty was, therefore, $62,400 and costs.
Counsel for Resourceco submitted that the judge had failed to have regard to the totality principle so that the overall penalty was not commensurate with the gravity of the offending. Allied with that contention was a submission that the fine for the first offence was manifestly excessive.
The First Offence
Resourceco is unable to point to any error in the judge’s remarks when fixing penalty for the first offence. It acknowledges that she had regard to all relevant factors. Resourceco simply says that the fine is too high. It was submitted that it was too high having regard to the fact that no environmental harm was alleged, the attempts of the appellant to cure the problem by purchasing extra land, and the circumstances of the contractual relationships between Resourceco and Readymix.
An aggravating feature of the offending is that it is quite clear that Resourceco had the ability to ensure that it complied with the terms of condition 7 of its licence. It is essentially a question of management, requiring a balancing of inputs and outputs, that is to say, balancing the amount of material received on to the site with what is sold or disposed of by other means. Even making all due allowance for the vicissitudes of business such as the availability of waste and the ability to sell the recycled product as well as the difficulties with Readymix, it was well within the ability of Resourceco to manage its site to avoid offending. When sentencing Resourceco, the judge commented that it gave priority to its profit over and above its obligation to comply with its licence and with the environmental protection order. That observation was not challenged on appeal. I entirely agree with it.
The breaches of condition 7 were frequent. Another aggravating feature of the appellant’s conduct is that it has repeatedly permitted the height of the stockpile to exceed the height of the raised bank. It exceeded the height of the raised bank within two or three months of obtaining its licence. It continued to act in breach of condition 7 on a number of occasions before 13 May 2004 and continuously thereafter. Resourceco is not to be punished for those prior occasions on which it permitted the height of the stockpile to be above the height of the raised wall. In addition, the fact that Resourceco did not reduce the height of the stockpile after being served with the environment protection order is the subject of the second offence. Resourceco is not to be punished twice for that conduct. Those prior incidents are relevant because they establish that the appellant’s offending was not an isolated offence. That is the only purpose of having regard to that earlier conduct.
Resourceco’s conduct is to be contrasted with those cases where a breach of the Act occurs, say, as a result of a single act of isolated negligence. The continued failure of Resourceco to lower the height of its stockpile was a matter well within its control.
A mitigating factor is that no environmental harm has resulted from the offending. That factor was offset to some extent by the fact that the neighbours had frequently complained of dust emissions, although it must be acknowledged that it is an area where there are other causes of dust emissions.
Another mitigating factor is that Resourceco is engaged in recycling waste in a useful way. It serves an environmentally useful purpose. However, it cannot be overlooked that it is a commercial venture in which Resourceco engages for profit. Regard must also be had to the fact that Resourceco has purchased another site close by so that it is able to take more active steps to reduce the height of its stockpile.
The judge had regard to all of these factors as well as to the appellant’s early plea of guilty and to attempts by it in the month before the hearing to attempt to achieve compliance with the terms of the licence.
The judge also had regard to the contrition of Resourceco as expressed by its counsel and to an apology offered on its behalf. In doing so, the judge acted mercifully. Expressions of contrition have some force when stated by a person or company which has offended on an isolated occasion. They have rather a hollow ring when expressed by a repeated offender, especially when the ability to comply is essentially a question of management. Nevertheless, as the judge had regard to those factors, I must accept that finding.
The judge had regard to all relevant factors. I repeat Resourceco was not able to demonstrate error in its part. The fine was well within the range which might be ordered for the offence. There is no ground on which this Court should interfere with the penalty for the first offence.
The Second Offence
Counsel for the appellant submitted that the appellant is being punished for the same offence twice and that the proper order was to convict the appellant without penalty for the second offence. Allied to that submission is that the judge failed to have regard to the totality principle.
The appellant is guilty of two separate offences. One is a breach of the conditions of the licence. The other is a failure to comply with the environment protection order issued on 13 May 2004. It was proper for the judge to sentence for both offences to which Resourceco had pleaded guilty. However, both offences relate to similar conduct, namely, the fact that the height of the stockpile exceeded the height of the raised bank.
It was necessary to have regard to the totality principle. The principle is described in Thomas, Principles of Sentencing, 2^nd ed (1979), 56-57 in these terms:
The effect of the totality principle is to require a sentencer who has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed and each properly made consecutive in accordance with the principles governing consecutive sentences, to review the aggregate sentence and consider whether the aggregate is “just and appropriate”. The principle has been stated many times in various forms: “when a number of offences are being dealt with and specific punishments in respect of them are being totted up to make a total, it is always necessary for the court to take a last look at the total just to see whether it looks wrong[”]; “when … cases of multiplicity of offences come before the court, the court must not content itself by doing the arithmetic and passing the sentence which the arithmetic produces. It must look at the totality of the criminal behaviour and ask itself what is the appropriate sentence for all the offences.
That exposition has been approved by this Court in R v Smith & Shoesmith (1983) 32 SASR 219 at 221 and by the High Court in Mill v The Queen (1988) 166 CLR 59 at 63. The application of the principle was expressed in these terms in R v Knight (1981) 26 SASR 573 at 576:
it seems to us that when regard is had to the totality of the sentences which the applicant is required to undergo, it cannot be said that in all the circumstances of the case, the imposition of a cumulative sentence was incommensurate with the gravity of the whole of his proven criminal conduct or with his due deserts. To use the language of Lord Parker LCJ in Reg. v Faulkner (1972) 56 Cr App R 594 at p 596, “at the end of the day, as one always must, one looks at the totality and asks whether it was too much”.
The totality principle is equally applicable when the penalty is a fine: R v Sgroi (1989) 40 A Crim R 197 at 203; Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 704. The principle is relevant to offending under an Environment Protection Act: Camilleri’s Stock Feeds Pty Ltd (supra). It has been applied by the Environment Court: see, for example, Harvey v Kangaroo Island Council [2004] SAERDC 63.

The most aggravating feature of the second offence is that the appellant failed to comply with the terms of its licence and reduce the height of the stockpile for 17 months from the period 13 May 2004, the date when the environment protection order was issued, to 12 October 2005, the date of the offence. The problem still had not been remedied by 26 October 2006, the date of the hearing in the Environment Court. It seems it has not yet been completely remedied even at the date of the hearing of this appeal. It is reasonable to infer from the fact that Resourceco failed to reduce the height of the stockpile during the 17 month period that it was acting in blatant defiance of the environment protection order. The difficulties which Resourceco had with Readymix do not explain the offending. They certainly do not exculpate it. As the judge found, Resourceco’s arrangements with Readymix worked well until early 2005. Notwithstanding that fact, throughout the period from May 2004 to early 2005 the stockpile continuously exceeded the stipulated height. In early 2005 the agreement remained on foot though lesser quantities were being sold. The agreement with Readymix did not terminate until June 2006. The difficulties with Readymix did not prevent Resourceco from taking steps to store its product in such a way that it reduced the height of the stockpile.
It is not clear from the judge’s reasons when imposing these fines whether she had regard to the totality principle. She simply imposed one fine and then another. She did not refer to the totality principle. It might, therefore, be inferred that she did not consider its application. Another feature of the judge’s remarks is that she did not refer to s 18A of the Criminal Law (Sentencing) Act 1982. As these two offences were committed while Resourceco was engaging in the same course of conduct, there were good reasons for proceeding under s 18A. The resulting penalty should be the same no matter what course is adopted. I will assume in Resourceco’s favour that the judge failed to have regard to the totality principle. However, for the reasons which follow, I do not think this requires any alteration to the penalty.
In a number of decisions, the Environment Court has set out the objects of the Environment Protection Act and the obligations imposed upon a person who is permitted by a licence to engage in activities which have a potential to cause pollution or which in fact cause pollution to a greater or lesser degree. The Act calls these activities “prescribed activities of environmental significance”. The Environment Court’s remarks are to the following effect. I respectfully agree with them.
The objects of the Environment Protection Act are to promote the principles of ecologically sustainable development, to ensure that all reasonable and practicable measures are taken to protect, restore and enhance the quality of the environment having regard to those principles and, among other things, to prevent, reduce, minimise and, where practicable, eliminate harm to the environment. The structure of the Act is such that no person may undertake a prescribed activity of environmental significance unless authorised by a licence. The holder of a licence holds a special privilege in that that person can undertake a polluting activity. However, there is a responsibility attached to the privilege. The licence holder must comply with the conditions imposed on the licence. That responsibility is reflected in s 45(5) of the Act. See Harvey v The Hamilton Wine Group Pty Ltd [2002] SAERDC 23, Harvey v Rural City of Murray Bridge [2004] SAERDC 32, Harvey v BRL Hardy Ltd [2003] SAERDC 57.
Resourceco was granted the privilege of engaging in a dust producing activity. While its business benefits the environment by converting waste materials to a useful product for road construction, it must engage in that activity according to the terms of its licence and, consistently with the privilege of being able to engage in a polluting activity, must conduct its operations in accord with its licence and in a way which does not pollute the environment. It is reasonable to infer from the long period of time over which Resourceco has ignored the environment protection order served on 13 May 2004 and from the fact that, at the date of the hearing before the judge in the Environment Court, it had still failed to reduce the height of the stockpile below the raised bank, that Resourceco failed to take the obligation of its licence seriously, if it had not acted in blatant defiance of them. This was extremely serious offending by a company which has had scant regard to the terms of its licence for more than two years, if the period is reckoned to the time of the hearing before the judge in the Environment Court. It is offending which called for a very substantial fine. It was appropriate for the Environment Court to mark its disapproval with a very substantial financial penalty. In my view the total penalty of $62,400 is not an excessive penalty. When regard is had to the totality principle, the overall penalty is not incommensurate with the gravity of the offending. The appellant has deliberately sought to enhance its profitability without due regard to the obligations of its licence and has done so despite repeated warning. It did not take sufficient steps even though it was twice again reminded of its obligations when it had to pay an expiation fee on 17 November 2004 and on 24 June 2005.
For these reasons I would dismiss the appeal.
The Appellate Court
The respondent submitted that, as this was an appeal from a final order of the judge of the Environment Court, this appeal should have been heard by the Full Court of this Court. Resourceco said that it would abide the order of the Court on that question.
Offences against the Environment Protection Act are within the criminal jurisdiction of the Environment Court: s 132 of the Environment Protection Act. The court deals with such offences as summary offences in the same way as Magistrates Courts and in accordance with the procedures in the Summary Procedure Act 1921: see s 7(3) and s 7(3a) of the Environment Resources and Development Court Act 1993.
The respondent relied on the terms of s 30(1) of the Environment Resources and Development Court Act and in particular on paragraph (e). Section 30 (1) and (2) are in these terms:
(1)Subject to this section and to any provision in a relevant Act as to appeals against a decision or order of the Court in the exercise of a jurisdiction conferred by that Act, an appeal lies –
(a)     in the case of an interlocutory order made by the Court – to the Supreme Court constituted of a single Judge;
(b)     in the case of a decision or order given or made by one or more commissioners (not being a decision or order of a full bench) – to the Supreme Court constituted of a single Judge;
(c)     in the case of a decision or order given or made by a magistrate – to the Supreme Court constituted of a single Judge;
(d)     in the case of a decision or order given or made by a Master or a registrar – to the Supreme Court constituted of a single Judge;
(e)     in any other case – to the Full Court of the Supreme Court.
(2)An appeal lies as of right on a question of law and with permission on a question of fact (but this principle may be displaced or modified by the provisions of the relevant Act under which the jurisdiction is conferred).
If s 30(1) and s 30(2) were the only provisions which were relevant, this appeal would have been listed for hearing before the Full Court because the appeal would have fallen under s 30(1)(e). However, it is necessary to have regard also to the terms of s 30(4) of the Act. Section 30(3) is irrelevant for present purposes. Section 30(4) provides:
(4)A party to any criminal proceedings before the Court may appeal against any judgment given in those proceedings in the same way, and to the same extent, as an appeal may be instituted against a judgment given in a criminal action under the Magistrates Court Act 1991.
The words “in the same way, and to the same extent” signify that the appeal lies to a single judge of this Court. There are a number of routes to that conclusion.
Section 30(1) and (4) prescribe to which court an appeal will lie. Section 30(4) refers to appeals in criminal proceedings while s 30(1) refers to appeals in all other matters. The Full Court is not a court to which an appeal will lie against a judgment given in a criminal action under the Magistrates Court Act. The court in which such appeals are instituted is the Supreme Court constituted by a single judge. An appeal will thereafter lie to the Full Court but only if permission to appeal is given. In addition, when s 30(4) says that a party may institute an appeal in the same way as an appeal instituted against a judgment given in a criminal action under the Magistrates Court Act, it is stating that the appeal lies to this Court constituted by a single judge. The expression is not intended to be anything other than a provision identifying the court which will hear the appeal just as s 30(1) does for all other proceedings in the Environment Court. Had Parliament intended that all appeals in criminal proceedings should lie to the Full Court, it could easily have said so. Alternatively, it could have omitted s 30(4).
Furthermore, when s 30(4) speaks of an appeal being instituted “to the same extent” as an appeal against a judgment in a criminal action under the Magistrates Court Act, it means that the appeal lies on both questions of law and questions of fact. Section 30(2) which provides for appeals in other matters limits the appeal to question of law and appeals on questions of fact may be made only by permission of the court. It applies only to appeals in matters other than criminal proceedings in the Environment Court. In short, s 30(4) applies to appeals in criminal proceedings before the Environment Court and s 30(1) and s 30(2) applies to appeals in all other proceedings in that Court.