Land and Environment Court of New South Wales CITATION : Environment Protection Authority v Haylan and Anor [2001] NSWLEC 289 PROSECUTOR Environment Protection Authority FIRST DEFENDANT PARTIES : Kenneth William Haylan SECOND DEFENDANT WWLS Blayney Pty Limited FILE NUMBER(S) : 50033-50036 of 2001 CORAM: Cowdroy J KEY ISSUES: Environmental Offences :- LEGISLATION CITED: Pollution Control Act 1970 Protection of the Environment Operations Act 1997 s 120, 169, 241 and 242 Axer Pty Limited v Environment Protection Authority (1993) 113 LGERA 357; Camilleri's Stock Feed Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683; Environment Protection Authority v Orange City Council [1995] NSWLEC 103; Environment Protection Authority v Dubbo City Council (1994) 2 LGERA 361 ; CASES CITED: Lowe v The Queen (1984) 154 CLR 606; McDonagh (on behalf of Great Lakes Council) v Birdon Dredging Pty Limited (1998) 99 LGERA 198; Pearce v The Queen (1998) 194 CLR 610; Ryan v The Queen (2001)179 ALR 193; R v Olbrich (1999) 199 CLR 270 ; R v Postiglione (1997) 189 CLR 295 DATES OF HEARING: 3/12/01 DATE OF JUDGMENT: 12/14/2001 PROSECUTOR Mr T Howard (Barrister) SOLICITORS Environmental Protection Authority LEGAL REPRESENTATIVES: DEFENDANTS Mr P Givorshner (Barrister) SOLICITORS N/A JUDGMENT: IN THE LAND AND MATTER No. 50033-36 of 2001 ENVIRONMENT COURT CORAM: Cowdroy J OF NEW SOUTH WALES DECISION DATE: 14/12/01 Environment Protection Authority Prosecutor v Kenneth William Haylan First Defendant WWLS Blayney Pty Limited Second Defendant JUDGMENT 1. The second defendant has pleaded guilty to two charges pursuant to s 120 of the Protection of the Environment Operations Act 1997 ("the PEO Act"). The charges allege that the defendant polluted waters of the unnamed creek near Blayney by permitting phosphorous compounds in waste water from a laundry to be discharged. 2. The first defendant has also pleaded guilty to the two offences having been charged as a director of the second defendant pursuant to s 169 of the PEO Act. 3. The Court is therefore required to impose a penalty in respect of each offence. Facts 4. The prosecutor and defendants have relied upon a Statement of Agreed Facts. Such facts were submitted in preference to the admission of affidavit evidence. Accordingly the Court is restricted to the facts set out in the statement for the purpose of assessing penalty. The prosecutor and defendants also rely upon a Joint Report of Technical and Environmental Considerations prepared by Mr Paul Rendell and Mr Noel Child ("the report"). Effluent disposal system 5. The defendants manage an industrial laundry business ("the laundry") at Blayney in central west NSW that is owned by a joint venture comprising Shreelane Pty Limited, Warra Pty Limited and CDC Nominees (WWLS) Pty Limited ("the joint venture"). The laundry has been in operation since 1991 and currently employs approximately 40 people. 6. The laundry generates, on average, 60,000 litres of effluent every day. Such effluent is disposed of by means of a spray irrigation system comprising a holding dam of a capacity of 3.6 megalitres and a connected series of sprinklers located on adjacent lands owned by the joint venture ("the effluent disposal system"). 7. In August 1990 the second defendant sought a pollution control approval from the State Pollution Control Commission ("the SPCC", now the prosecutor by virtue of the Protection of the Environment Administration Act 1997) for the effluent disposal system. Pollution Control Approval 260788 C1 ("the PCA") was issued on 24 January 1991 pursuant to the Pollution Control Act 1970 to install and operate the laundry and associated effluent disposal area. The PCA was subject to the following relevant conditions:- 12. A minimum of 3.46 hectares of land shall be provided for the irrigation of effluent. 15. A holding pond with a capacity of 3130 cubic metres shall be constructed to receive wastewater during wet weather. 19. During rainfall periods or following rain when the soil is moist, effluent from the oxidation pond shall be directed to a holding pond designed for that purpose. 20. No irrigation shall be carried out during rainfall periods or following rain when the soil is moist and runoff likely to occur. 8. On 14 March 1991 the first defendant requested that conditions 15 and 19 of the PCA be revoked. Such request was accepted by the SPCC on 25 March 1991. 9. Despite the requirement of condition 12, the area of land in fact used by the second respondent to irrigate effluent from the laundry has never been more than 1.46 hectares. Responsibility for the effluent disposal system 10. The first defendant has admitted that he assumed the responsibility for the operation and maintenance of the effluent disposal system personally, and did not delegate this responsibility to any other member of the laundry. As a result whilst the first defendant was interstate conducting business in early 2000 there was little supervision over the effluent disposal system. Damage to the disposal system 11. Some time before the events the subject of the charges, but believed by the defendants to have been during November 1999, the hoses which connected the irrigation system to the holding dam had been accidentally severed when the irrigation fields ("the fields") had been mowed by a contractor. When the effluent disposal system pump was used after that time the effluent would spill from the leaks in the hoses and pool across the fields instead of being spread by spray irrigation throughout the fields. Matter 50034 and 50036 of 2001 12. These charges relate to events occurring on 17 March 2000. Rainfall for the Blayney area at this time had been the highest for ten years, and the excessive rainfall filled the holding dam to its capacity. Since the effluent was not distributed across the fields by the irrigation system in consequence of the severed hoses, the holding dam overflowed and the effluent containing phosphorous compounds flowed over the saturated fields and into an adjacent drain. The effluent ran a distance of approximately 200 m down the drain and into a depression described in the report as an 'artificial wetland'. Matter 50033 and 50035 of 2001 13. These charges relate to similar events occurring on 12 May 2000. Matters for consideration 14. Section 241 of the PEO Act directs the Court to consider certain matters when imposing a penalty for an offence against the PEO Act. Harm 15. The report relevantly states as follows:- In the specific circumstances of this matter, it is unlikely that the two incidents on 17 March and 12 May 2000 caused actual environmental harm in the Drain, the Wetland, or beyond. 16. None of the charges allege that effluent passed through the drain or wetland into the Belabula River, into which both the drain and the wetland have the capacity to drain. Nevertheless, the prosecutor submits that the Court can conclude that there was the potential for harm to the environment as a result of the two incidents. The report states that phosphorus contaminants in the effluent present a 'potentially serious risk to inland waterways' but that 'The predominant source of phosphorus contamination in rural areas is runoff from fertilized agricultural land.' The report also notes that 'a range of physical and chemical processes would remove and dilute the phosphorus present.' 17. Section 241(1)(a) of the PEO Act directs the Court to consider 'the extent of harm caused or likely to be caused to the environment by the commission of the offence'. The only evidence before the Court is that there has been no actual harm to the environment. In the absence of conclusive evidence relating to potential harm to the environment the Court cannot draw an inference that the potential for harm caused by the two incidents was significant enough to warrant characterisation as an aggravated offence: see R v Olbrich (1999) 199 CLR 270 at 281 per Gleeson CJ and Gaudron, Hayne and Callinan JJ and see also Axer Pty Limited v Environment Protection Authority (1993) 113 LGERA 357 at 361 per Badgery-Parker J. Practical measures 18. Pursuant to s 241(1)(b) of the PEO Act, the Court is required to consider the practical measures which might have been adopted to avoid the harm caused by the events. In Axer v EPA Mahoney JA said at 359:- In the end, the object of the [environmental protection] legislation is to prevent pollution and to do this, inter alia, by the deterrent effect of a substantial fine and by, in consequence, persuading the industries concerned to adopt preventative measures. 19. The prosecutor has submitted that as a practical measure to control or mitigate harm to the environment the defendants could have operated the effluent disposal system over the entire area of 3.46 hectares that was required by the PCA. The prosecutor submits that the use of less than half of the required disposal area was a failure to establish business practices that would prevent pollution. 20. Section 241(1)(b) of the PEO Act does not direct the Court to consider in the abstract all possible practical measures that would prevent harm to the environment but rather those practical measures that would have prevented the harm caused by the offence. Thus, whilst the use of the entire 3.46 hectares of land to dispose of the effluent may have been a desirable practical measure to prevent or mitigate harm to the environment the Court cannot conclude that had this measure been adopted that the harm in this case would have been avoided. The harm that resulted from the slashed hoses would have occurred irrespective of the use of the excess land. 21. The prosecutor also submits that the defendants failed to have a proper or adequate system of delegation of responsibility for the maintenance and operation of the effluent disposal system in place to prevent or mitigate harm to the environment. The first defendant maintained total control over the operation of the effluent disposal system. The first defendant did not delegate his duties when called away on business as occurred in 2000. He acknowledges that his management style contributed to the offences. Further, he acknowledges that a more effective delegation of responsibility for the effluent disposal system may have been a practical measure which, if adopted, would have avoided the harm caused by the two incidents. Such delegation should have allowed for the discovery of the slashed hoses and for their repair and the harm caused by the offences thereby avoided. 22. Despite such considerations, the defendants submit that the Court may consider the expectations of the defendants that the laundry was, at the dates of the charges, shortly to be attached to the sewerage system of the Blayney industrial estate. 23. On 11 July 1995 the Blayney Council ("the council") wrote to the defendants notifying them that the council was considering providing a sewer to the industrial estate. On 29 April 1997 the council formally announced that the sewer would be constructed and that the laundry would be connected. The sewer was formally commissioned on 18 February 1998. On 13 March 2000 the second defendant applied to the council to have the sewer connected to the laundry. The laundry has been connected since 22 May 2000. 24. The defendant submits that the connection to the sewer was a practical measure undertaken by the defendant to control or mitigate harm to the environment. However, since the connection was made after the events, it is of little consequence. Foreseeability and control 25. The prosecutor submits that the discharge of effluent was a reasonably foreseeable outcome of the operations of a commercial laundry and that the defendants had control over the causes of the offences. The prosecutor relies upon the fact that the effluent disposal system was not operating to its full capacity. 26. The defendants submit that the higher than usual rainfall for that period was not foreseeable nor within the control of the defendants and that such rainfall was a significant cause of the offence. The defendants also submit that the effluent disposal system could not practically be used to its full capacity since the utilisation of the full 3.46 hectares of land for the purposes of irrigation would have required the second defendant to undertake significant, though not prohibitive, engineering works to run the system under a public road and through an adjacent property not owned by the laundry. 27. The Court is satisfied that the discharge of effluent from the holding dam was a foreseeable event in the heavy rainfall that preceded the first event and that the second incident was foreseeable in light of the first incident. The Court is not satisfied that the utilisation of the other lands would have prevented the offences but notes that the management style of the first defendant required him to exercise sole responsibility for the irrigation system. Accordingly, the first defendant had some control over the causes of the offences. Objective assessment of penalty 28. The Court takes all of the above matters into consideration, and the decisions of the New South Wales Court of Appeal in Axer Pty Ltd v EPA and Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 which establish that such environmental offences are serious offences requiring consideration of general deterrence. The Court is nevertheless satisfied that these incidents each represent less serious offences requiring a penalty of the lowest range. Such characterisation of the offences was conceded by the prosecutor. The maximum penalty for the first defendant is $125,000 and for the second defendant $250,000. A penalty in the lowest range will generally result in a penalty of between 0 – 10% of the maximum penalty: see Environment Protection Authority v Orange City Council [1995] NSWLEC 103 per Stein J. Other matters for consideration 29. The Court is also requested to take further matters into consideration in imposing a penalty for each offence. Plea of Guilty 30. The defendants have pleaded guilty to each offence. The Court is required to consider a plea of guilty pursuant to s 22 of the Crimes (Sentencing Procedure) Act 1999 ("the Sentencing Procedure Act"). In accordance with the decision of the New South Wales Court of Appeal in R v Thomson; R v Houlton (2000) 49 NSWLR 383 the Court will reduce the penalty for each offence by 25% for the utilitarian value of the pleas of guilty. Good character 31. The first defendant has tendered several character references that attest to his good character. Such references indicate that the first defendant has performed and continues to perform dedicated and valuable community service and also activities indicating environmental and ecological concern. 32. The first defendant relies on the decision of the High Court of Australia in Ryan v The Queen (2001) 179 ALR 193. In Ryan McHugh J said at 198-199:- It is necessary to distinguish between the two logically distinct stages concerning the use of character in the sentencing process. First, it is necessary to determine whether the offender is of otherwise good character . When considering this issue, the sentencing judge must not consider the offences for which the prisoner is being sentenced…Second, if the offender is of otherwise good character, it is necessary to determine the weight that must be given to that mitigating factor. If an offender is of otherwise good character, then the sentencing judge is bound to take that into account in the sentence that he or she imposes. See also at 217 per Kirby J and at 233 per Callinan J. 33. The Court is satisfied that the first defendant is a person of otherwise good character. Further, the Court is satisfied that the first defendant's character can be considered as more than 'general good character'. These considerations entitle the first defendant to considerable latitude in assessing the extent of any penalty. The Court is also entitled to infer genuine contrition from the evidence. Parity, totality and double jeopardy 34. In Pearce v The Queen (1998) 194 CLR 610 McHugh, Hayne and Callinan JJ said at 623:- To the extent to which two offences of which an offender stand convicted contain common elements, it would be wrong to punish that offender twice for the commission of elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done, it should not be affected by the way in which the boundaries of particular offences have been drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts. 35. The offences under consideration overlap. The first defendant has been charged in his capacity as a director of the second defendant pursuant to s 169 of the PEO Act based upon the same facts relied upon in respect of the charges against the second defendant. The first defendant has informed the Court that he will personally pay any fine imposed upon the second defendant. On this basis the Court should not disregard the fact that the first defendant will bear the burden of all the penalties imposed in relation to these offences. 36. Similarly, because multiple offences have been charged the Court is required to impose a penalty for each offence. However, the total amount of the penalties imposed must reflect the total abstract criminality of the defendant: Camilleri's Stock Feeds Pty Ltd v EPA at 703-704 per Kirby P. Accordingly, the penalties must be adjusted to represent the criminality of the first and second defendant. 37. Further, the Court is also required to consider the impact of each sentence upon the 'co-offenders' in accordance with the decision of the High Court of Australia in R v Postiglione (1997) 189 CLR 295. The parity principle must be applied to ensure equal justice between offenders and requires the Court to consider a sentence that will avoid a 'justifiable sense of grievance' between the first and second defendants: Lowe v The Queen (1984) 154 CLR 606. Penalties 38. The Court is satisfied that it is appropriate to impose a penalty by way of a fine upon the second defendant in both matters 50034 and 50035 of 2001. The amount for the second offence must reflect the seriousness of a repeated offence and yet must be reduced to reflect the total criminality of the second defendant. Conditional discharge 39. The first defendant has submitted that the Court might consider dismissing the charges against him, either conditionally or unconditionally, pursuant to s 10 of the Sentencing Procedure Act. 40. Offences pursuant to the PEO Act are of a serious nature and the appropriate sentencing option is a fine that will operate as a general deterrent: see McDonagh (on behalf of Great Lakes Council) v Birdon Dredging Pty Limited (1998) 99 LGERA 198 per Bignold J. Accordingly, a dismissal of a charge under the PEO Act is usually not an appropriate response to the sentencing of an offender in this Court: see Environment Protection Authority v Attard (NSWCCA, 16 May 2000, unreported) and see also Environment Protection Authority v Dubbo City Council (1994) 2 LGERA 361 at 364 per Talbot J. 41. However, in this instance the Court notes that the first defendant is 60 years of age and has no prior convictions. During his lifetime he has performed noteworthy charitable services to the community and has been an exemplary citizen. Further, s 242 of the PEO Act expressly empowers the Court to dismiss a charge brought under the PEO Act pursuant to s 10 of the Sentencing Procedure Act. 42. The Court also recognises that the first defendant has been charged in his capacity as director of the company and that he will assume the liability of the second defendant. Thus, whilst an offence pursuant to s 120 of the PEO Act cannot generally be characterised as 'trivial' for the purposes of s 10(3)(b) of the Sentencing Procedure Act, the Court is satisfied pursuant to s 10(3)(c) of that Act that the extenuating circumstances present in this case justify a departure from the customary practice of this Court which requires a consideration of general deterrence when imposing a sentence. For these reasons the Court finds it appropriate to dismiss the charges against the first respondent pursuant to s 10(1)(a) of the Sentencing Procedure Act. Orders 43. In matter 50034 of 2001 the second defendant is convicted of the offence as charged and the Court imposes a fine in the amount of $8,000 reduced by 25% to $6,000. 44. In matter 50035 of 2001 the second defendant is convicted of the offence as charged and the Court imposes a fine in the amount of $10,000 reduced by 25% to $7,500. 45. In matter 50033 and 50036 the Court finds the offences proved but pursuant to s 10(1)(a) of the Sentencing Procedure Act the Court dismisses each charge. 46. The Court orders the second defendant to pay the costs of the prosecutor as agreed or assessed pertaining to charges 50034 of 2001 and 50035 of 2001. 47. The Court orders the exhibits be returned. 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