Reported Decision : (2006) 148 LGERA 278 Land and Environment Court of New South Wales CITATION : Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289 PROSECUTOR Environment Protection Authority PARTIES : DEFENDANT Ballina Shire Council FILE NUMBER(S) : 50045 of 2005 CORAM: Preston CJ KEY ISSUES: Prosecution :- offence against s 64(1) of the Protection of the Environment Operations Act 1997 - contravention of condition of environment protection licence - failure to carry out monitoring of leachate volumes at waste landfill in accordance with condition of licence for a period of over two years - defendant submitted annual reports to EPA failing to disclose lack of required leachate monitoring - circumstances objectively serious - monitoring important in adaptive management - plea of guilty - mitigating circumstances Crimes (Sentencing Procedure) Act 1999 s 3A LEGISLATION CITED: Protection of the Environment Operations Act 1997 s 64(1) Waste Minimisation and Management Act 1995 Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683; Director-General, National Parks and Wildlife v Wilkinson [2002] NSWLEC 171 (27 September 2002); Environment Protection Authority v Bellingen Shire Council [2003] NSWLEC 42 (17 December 2002); Environment Protection Authority v BlueScope Steel (AIS) Pty Limited [2004] NSWLEC 400 (27 July 2004); Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349; Environment Protection Authority v Coffs Harbour Hardwoods (Trading) Pty Limited (2004) NSWLEC 563 (13 October 2004); Environment Protection Authority v Collex Pty Limited (2001) 115 LGERA 337; Environment Protection Authority v Hochtief AG [2006] NSWLEC 200 (28 April 2005); CASES CITED: Environment Protection Authority v Lithgow City Council [2003] NSWLEC 425 (18 August 2003); Environment Protection Authority v Midcoast County Council (trading as Midcoast Water) (2003) 136 LGERA 233; Environment Protection Authority v Norco Co-operative Limited (2000) 108 LGERA 137; Environment Protection Authority v Pasminco Broken Hill Mines Pty Limited [2002] NSWLEC 70 (8 May 2002); Environment Protection Authority v Port Kembla Copper Pty Limited (2001) 115 LGERA 391; Environment Protection Authority v Tenterfield Shire Council (2000) 112 LGERA 173; R v Rushby (1977) 1 NSWLR 594; R v Thomson; R v Houlton (2000) 49 NSWLR 383; State Pollution Control Commission v Broken Hill Proprietary Company Ltd (No 1) (1991) 74 LGRA 351; State Pollution Control Commission v CSR Limited (1989) 75 LGERA 1 DATES OF HEARING: 04/05/2006, 05/05/2006 EX TEMPORE JUDGMENT DATE : 05/05/2006 PROSECUTOR Ms G B Furness (barrister) SOLICITORS Environment Protection Authority LEGAL REPRESENTATIVES: DEFENDANT Mr M G Craig QC SOLICITORS Allens Arthur Robinson JUDGMENT: THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES PRESTON CJ 5 MAY 2006 50045 of 2006 ENVIRONMENT PROTECTION AUTHORITY V BALLINA SHIRE COUNCIL JUDGMENT 1 HIS HONOUR: The defendant Ballina Shire Council, has pleaded guilty to the charge that between 31 January 2002 and continuing until 1 May 2005 inclusive, at or near Ballina, New South Wales, it committed an offence against s 64(1) of the Protection of the Environment Operations Act 1997 ("the Act"), in that it was the holder of an environment protection licence and contravened a condition of that licence. 2 The environment protection licence was Licence No. 6350 issued to Ballina Shire Council. Condition M6.2 of that licence provides that: "The Licensee must monitor: (a) the volume if leachate reinjected into waste filled areas; (b) the volume of leachate irrigated onto waste filled areas; and (c) the volume of leachate discharged off site, at the frequency and using the method and units of measure specified below. Frequency Unit of Measure Sampling Method Daily kL No method specified " 3 The charge particularised the contravention as being that the defendant failed to do the monitoring as required by the condition. The offence provisions 4 At the time of the offence, s 64(1) of the Act provided: "(1) Offence If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence." 5 The offence under s 64(1) of the Act is a status offence. It imposes liability for a contravention of a condition of licence on the holder of the licence, in respect of which liability subs (2) provides a composite statutory defence which must be established by the holder of the licence. The offence is classified as a tier 2 offence (s 114(2) of the Act) and is an offence of strict liability: State Pollution Control Commission v Broken Hill Proprietary Company Ltd (No 1) (1991) 74 LGRA 351 and Environment Protection Authority v Collex Pty Limited (2001) 115 LGERA 337 at 339[3]. The landfill 6 The defendant operates a solid waste landfill at premises located at Southern Cross Drive, Ballina ("the premises"). The premises are located about 3 kilometres north of the Ballina town centre. The premises, or at least parts of the premises, have operated as a landfill since 1980. 7 Between 1998 and 2000, prior to the issue of the defendant's environment protection licence in 2001, discussions took place between the Environment Protection Authority ("EPA") and the defendant regarding the drafting of a document entitled "Landfill Environmental Management Plan" (the "LEMP"). The EPA originally required the defendant, under the conditions of its licence issued under the Waste Minimisation and Management Act 1995, to prepare an LEMP in 1998. 8 A LEMP was subsequently prepared by the defendant's environmental consultants, Gilbert & Sutherland Pty Limited ("Gilbert & Sutherland"), in December 2000. The LEMP describes various local environmental characteristics relevant to the premises and the landfill, various environmental risks associated with the landfilling operations at the premises, the objective of improving the environmental performance at the operation of the landfill, and various works and strategies intended to be employed by the defendant to address those environmental risks. 9 When the existing landfill area was full (anticipated to be between eight to sixteen years into the future), it was proposed that the defendant would construct a new fully lined landfill area to the south of the existing landfill area. However, the continued use of the existing landfill area was anticipated to be contingent upon the carrying out of certain measures discussed in the LEMP and the monitoring and satisfactory performance of those measures during the trial period. 10 The LEMP informed the grant of a licence by the EPA. The licence was granted on 6 March 2001. The licence was granted under the Act. 11 Various versions of the defendant's licence were in force during the charge period. However, the relevant condition the subject of the charge in this case, condition M6.2, remained unchanged throughout the charge period. It is in the terms that I have quoted above. 12 The licence contemplated that a new leachate system would be constructed in order to address some of the issues related to the continued operation of the landfill by draining leachate from the landfill and sustainably disposing of it. The new leachate system was proposed to include lateral leachate draining lines, deleaching wells to collect the leachate draining from the waste mass, and a pumping system to transfer leachate collected in the wells. There was no proposal to install a liner beneath the already landfilled areas. The intention of the new leachate system was to drain leachate from the landfill in excess of the field capacity of the waste mass, to collect the leachate and to sustainably dispose of it. 13 The licence contemplated that there would be a trial period for overtopping or continuing landfill operations in the existing landfill area, also referred to as the northern landfill area. The continued operation of that area beyond the trial period depended upon the successful completion of various management and monitoring measures which would establish that the area could be satisfactorily continued to be used for a longer period of time. The licence 14 The licence contained a number of conditions requiring monitoring, recording, reporting and the carrying out of pollution studies and reduction programmes. Amongst the monitoring and recording conditions was condition M2.1 which required the defendant to monitor the concentration of pollutants discharged, according to various analytes, at specified monitoring discharge points or utilisation areas specified in the condition. Condition M6 required the defendant to monitor the volume of leachate that had been collected and had been either reinjected into waste filled areas, irrigated onto waste filled areas or discharged off the site. There were various other monitoring conditions. 15 Amongst the reporting conditions was condition R1.1. That condition required the defendant, as licensee, to complete and supply to the EPA an annual return in the approved form comprising a statement of compliance and a monitoring and complaint summary. As the name suggests, the reports were to be provided annually. 16 Amongst the conditions relating to the carrying out of pollution studies and reduction programmes were conditions U1 and U2. 17 U1 required the carrying out of a water balance investigation. The defendant, as licensee, was required to undertake a hydrological investigation of the northern landfill area (the existing landfill) addressing all inflows and outflows from the area over a period of three years following the licence condition coming into effect. Investigation was required: (a) to establish, inter alia, the efficiency and effectiveness of the leachate collection, treatment and disposal system employed over the three year period, (b) to identify and assess changes in the system's efficiency and effectiveness over the period, and (c) to establish the perched leachate level draw-down performance, the volume and rate of leachate generated, the volume and rate of leachate collected by the leachate management system, the volume and rate of leachate disposed of by irrigation and reinjection, and the net volume and rate of leachate lost to ground water. 18 The defendant, as licensee, was required to prepare and submit to the EPA for review a report within three months of the end of the three year investigation period. The report was to include the results that had been collected through the water balance investigation process. 19 Condition U2 required the defendant, to assess the results of the 24 months of ground water sampling that was required to be carried out in accordance with condition M2. The defendant, as licensee, was also required to do this in relation to the 24 months of leachate sampling that was required to be carried out in accordance with condition M2. 20 It can be seen from these conditions that there was an interrelationship between the conditions. Condition M6 which required the defendant, as licensee, to monitor the volume of leachate was relevant to the determination of the water balance investigation under condition U1. That water balance investigation would assist in giving a fuller picture of how the new leachate system which was being implemented by the licence and as recommended under the LEMP, was operating. The three years of data that would be produced by the monitoring system would then be able to be used to determine whether the northern landfill site, the existing landfill, could be continued to be used beyond the three year trial period. The installation of the new leachate system 21 Condition O5.1 of the licence required the new leachate system to be installed by 31 January 2002. The defendant advised the EPA by telephone on 10 June 2002 and then formally in a letter dated 14 August 2002 that it had not been able to complete installation of the new leachate system by 31 January 2002 as required by the licence condition O5.1 and that it did not anticipate completing the installation of the new leachate system until 30 September 2002. The reason given was that there had been an explosion of methane gas on 14 February 2002 during construction of one of the leachate collection "deleaching" wells. 22 The defendant subsequently informed the EPA by a letter dated 25 October 2004 that the new leachate system was operational by 30 September 2002. 23 The leachate collection system described in the LEMP was proposed to operate as a vacuum system. However, the design of the leachate collection system was modified by the defendant. The modified design which was ultimately installed was a gravity-fed ring system which differed in a number of respects from the system referred to in the LEMP. 24 The defendant encountered technical difficulties associated with the ongoing commissioning of the new leachate system and with the operation of the flow meters installed in the new leachate system to measure leachate volumes. 25 In mid 2004, the defendant commissioned a review of the performance of the new leachate system by Mulder & Associates Pty Limited ("Mulder & Associates"). 26 The result of the review of the performance of the new leachate system by Mulder & Associates was provided to the defendant on 13 September 2004. That report was provided in turn to the EPA on 20 September 2004. Just prior to this, Mr John Truman from the Council had met with the EPA and had discussed the contents of the report. This meeting occurred on 15 September 2004. Lack of monitoring 27 The new leachate system was operational from 30 September 2002. Monitoring of that system would have been able to have been carried out from this time onwards. However, in fact, no effective monitoring was carried out from the time when the new leachate system became operational until at least September 2004, although the admission of the facts in the charge by the plea of guilty would give the date as late as 1 May 2005. 28 A variety of reasons have been provided for the failure to carry out monitoring in accordance with condition M6.2. Mr Truman, the Group Manager, Civil Services with the defendant, who was the person responsible for the management of the Council's infrastructure and services, including this landfill, states in his affidavit sworn 28 March 2006: "There are a number of reasons why daily records for monitoring were not kept for leachate reinjection and leachate irrigation and a detailed explanation is provided in the Statement of Non-Compliance for Condition M6.2, which is part of Annexure C. These include that: (a) the system had not been operated daily since its installation, given the extended length of time involved in commissioning the leachate system; (b) the flow meters installed in the system during construction were installed incorrectly and thus were not able to operate in the manner designed or intended; (c) since installation, other problems have occurred with the flow meters including crazing and cracking of flow meter lenses, rendering them unreadable; (d) flooding of power supply rendering it unpowered or inoperable; (e) faulty calibration rendering the flow meters inaccurate; (f) council had to rely on the skills, equipment and willingness of a number of external service providers, which increased the delays in rendering the equipment operable. On some occasions it was very difficult to isolate the cause of the particular technical problem and to identify the appropriate service provider to fix it; and (g) problems were often not concurrent. Some rectifications would work for a period and then fail, requiring the recall of service providers. Other rectifications created unexpected faults elsewhere, requiring continued troubleshooting": at [28] 29 The explanation provided in the Statement of Non-Compliance for Condition M6.2 in annexure C to Mr Truman's affidavit provides as follows, in part: "b). Particulars of Non-Compliance Flow meters fitted to the leachate Irrigation and Reinjection lines have been unreliable since installation. The pumps also have been plagued with technical, design and operational problems. Data are held on a number of starts and volumes pumped but these data are unable to be used for calculating the Water Balance Model due to gross inaccuracies in meter readings and large variation in pump rate effectiveness. Meter and pump problems have included: 1) Incorrect positioning relative to pipe invert. (They were installed too high relative to invert of pipe being measured leading to the meters not giving an accurate 'through put volume' reading). (Meters have now been reinstalled to correct height.) 2) Meter power supply was flooded by supply conduit being left open to water ingress. This caused meters to fuse and short circuit. The conduit has been water sealed. 3) Meter faces/lenses have become 'crazed' and 'fogged' due to temperature variation, expansion, contraction and moisture condensation. 4) 'Mother well' pumps have demonstrated inexplicable cavitation-like performance on several occasions. On these occasions pumps have been running but no effective delivery of leachate could be observed at irrigation heads or at reinjection spear points i.e. on occasions the pump motors were operating but no leachate was being produced out the end of the pipework. After a short period of 'power off' and then power being switched back on the pumps again pumped effectively. This means that even though historic pump start frequency and run times are recorded the true pump rate effectiveness of the pumps cannot be calculated. 5) Apparent loss of diminution (brown-out) of power to the 'mother well' pumps. The main switchboard AMP meters displayed or suggested (initially inexplainable) loss or reduction in available or apparent/effective power supply to the 'mother well' pumps. The cause of these inconsistencies has now been traced to faulty switchboard components. These have been replaced and power supply is demonstrated as apparently stable. Each of the meters has been (a) Irrigation meter : Serviced, repaired, refitted, calibrated (b) Reinjection meter : Serviced, repaired, refitted, calibrated, defined as inoperational unrecoverable, replaced with new meter, calibrated (c) Date/s of non-compliance Ongoing: The meters were installed in 2002 and have been intermittently effective since that date. The precise nature of error in meters was not identified until middle 2004 when it was identified they were neither reliable nor accurate. ... f) Cause of Non-Compliance 1: Incorrect pipework in initial design 2: Incorrect initial fitting 3: Poor quality meter 4: Poor workmanship during installation 5: Poor maintenance." 30 Mr Mulder, the environmental scientist that had been engaged by the defendant to investigate the leachate system, reported in his report of 13 September 2004 that: "(T)here have been a number of shortcomings identified in actions proposed to bring the system into compliance." 31 Mr Mulder summarised the current leachate system performance as follows: "Currently the system is operating in an unacceptable manner. The reasons for this are infrastructure problems compounded by inadequate training of the personnel operating the system and the lack of a monitoring regime to identify and require rectification of these failings": [item 1]. 32 In relation to flow meters, Mr Mulder concluded: "Flow meters monitoring leachate return to landfill. The metres have not worked since installation due to incorrect installation (now fixed) and incorrect calibration (now fixed). The original injection meter now works correctly and has been switched with the original irrigation meter which does not work": [item 1.1.4]. 33 In relation to operational problems, Mr Mulder concluded: "It appears that there was no consistent overall management of the design, construction and implementation phases of the leachate system. This resulted in a patchwork of equipment being handed to staff unfamiliar with electrical/mechanical pumping systems without adequate instruction in either those systems in general or in this particular system. No Operation and Maintenance manuals were prepared or other reference material (apart from the flow meter manual) supplied. This may in part be explained by, but cannot be excused by, changes in system requirements during design and construction i.e. rejection of vacuum system, replacement of submersible pumps etc. The consequence has been field staff trying their best but due to the inadequacy of the infrastructure not achieving the requirements of the Council or EPA licence conditions": [item 1.2] 34 In relation to maintenance problems, Mr Mulder concluded: "No structured maintenance programme or philosophy has been instigated. On demand breakdown maintenance by the original installing contractors has been an exercise in patching a faulty system. Significant faulty system elements such as the flow meters have been ignored. The external contractor maintenance reliance means that Council does not build up the in house knowledge that can then be used to operate an effective out of hours response utilising existing Council on call staff": [item 1.3]. Communications concerning monitoring 35 On 3 December 2002 the defendant submitted the licence annual return. The EPA seem to have received this annual return on 10 December 2002. Mr Truman gave evidence that that licence annual return was prepared by an employee under his supervision, Mr Fraser-Quick. However, Mr Fraser-Quick did not provide a copy of the licence annual return to Mr Truman or seek any input from or discuss with Mr Truman the contents of the licence annual return. Mr Truman said that the annual return went directly to the General Manager to forward to the EPA. The defendant did not advise in that licence annual return that the monitoring required under the environmental protection licence condition M6.2 had not been carried out. 36 The reporting period for that licence annual return was from 10 October 2001 to 9 October 2002. If the new leachate system had become operational by 30 September 2002 there was at least a period of nine days in which, if it had been functioning and the monitoring required by condition M6.2 had been performed, results could have been provided. If the monitoring had not been carried out, then that fact ought to have been stated in the licence annual return. But no such statement was made. 37 On 22 May 2003, the EPA wrote to the Council seeking confirmation of whether the leachate system was operational by 30 September 2002 as the Council's letter dated 14 August 2002 had predicted. It also sought a report on the performance of the leachate system. 38 On 4 July 2003, the EPA again wrote to the Council requesting the Council's response to the EPA's letter of 22 May 2003. 39 On 21 July 2003, Mr Fraser-Quick of the Council telephoned the EPA and informed the EPA that the leachate system was operational. 40 On 12 September 2003, the EPA wrote to the defendant requesting further information on the installation and performance of the leachate collection system. 41 On 29 September 2003, the Council wrote to the EPA reporting on the status of the leachate collection system. In that letter, no statement was made that monitoring pursuant to condition M6.2 was not being carried out. 42 On 20 October 2003, the EPA replied to the Council's letter of 29 September 2003. 43 On 5 December 2003, there was an onsite meeting between the EPA and the Council. The Council officers attending the meeting did not inform the EPA that monitoring was not being carried out pursuant to condition M6.2. 44 On 12 December 2003, the defendant responded to the EPA's letter dated 20 October 2003 confirming: "that the leachate system is currently functional and the design installed is as advised in previous correspondence to the EPA". 45 However, again, the Council did not advise the EPA that no monitoring was being carried out pursuant to condition M6.2. 46 On 24 December 2003, the EPA replied to the Council's letter dated 12 December 2003. 47 On 30 December 2003, the defendant submitted its licence annual return for the period 10 October 2002 to 9 October 2003. Again, the licence annual return did not state that the defendant had failed to comply with condition M6.2 during the reporting period. 48 On 8 March 2004, the EPA wrote to the Council requesting monitoring data that ought to have been collected by the Council pursuant to the conditions of the licence. 49 On 24 May 2004, there was a telephone call between officers of the EPA and the defendant. The EPA requested monitoring information from the Council. 50 In mid June 2004, the Council commissioned Mulder & Associates to review the landfill leachate system investigation. Mr Truman said that he determined that it was necessary to get external professional advice because of the reports that he had received from field staff as to the infrastructure problems that continued to occur with the leachate system. It seems that Mr Fraser-Quick was the person who formally engaged Mulder & Associates. 51 On 10 July 2004, the EPA again wrote to the Council requesting monitoring data. 52 On 2 September 2004, Mr Sutherland of Gilbert & Sutherland wrote to the Mayor of the defendant stating his concerns about monitoring. Mr Sutherland stated in that letter dated 2 September 2004: "You may be aware that Gilbert & Sutherland Pty Limited was commissioned to revise and update Ballina Shire Council's Landfill Environmental Management Plan (LEMP). We were also employed to conduct Environmental Audits of the Landfill facility every three months since February, 2002. It has come to my attention that Council officers have not provided essential leachate data which this firm needs to complete our work for you. These data have been requested on a number of occasions both verbally and in writing. It has also featured in every audit report to Council. These data should have formed the basis of leachate and ground water modelling required under the EPA licence conditions. The EPA licence is due for renewal by 01.07.05. By not providing these data, Council could be in an invidious position where the renewal of the licence may be jeopardised. Whilst personnel from this firm have had no indication from the EPA in this regard, I understand that your Mr Fraser-Quick has been questioned by Mr Chris Hatton, an EPA officer, about the data and the modelling and was also reminded of the licence conditions." 53 On 13 September 2004, Mulder & Associates provided their report to the Council, identifying problems with the leachate system. I have referred to relevant extracts from that report earlier in these reasons for judgment. 54 As a result of these disclosures by Mr Sutherland and Mr Mulder, Mr Truman telephoned the EPA to arrange a meeting with the EPA officers. That meeting took place on 15 September 2004. 55 On 20 September 2004, the Council wrote to the EPA, subsequent to the meeting that had been held on 15 September 2004, attaching a copy of the Mulder & Associates report. At this point in time, there was full disclosure to the EPA of the failure to carry out the monitoring as required by condition M6.2 and the other problems that had been encountered by the Council. 56 On 24 September 2004, the EPA wrote to the council stating the assurances that had been given to the EPA in the 2002-2003 licence annual return were false. 57 On 25 October 2004, the Council responded to the EPA and confirmed that the leachate system was operational by 20 September 2002. 58 On 29 November 2004, the EPA varied the defendant's licence to require the existing landfill to be closed by 31 December 2005 and final capping on that landfill to be completed by 30 April 2006. The variation also required the defendant to submit a project plan for the new southern landfilling area by 31 December 2004. 59 On 10 December 2004, the defendant submitted to the EPA its licence annual return for the period 10 October 2003 to 9 October 2004. For the first time, the defendant stated in its licence annual return that the data on the volume of leachate irrigated and reinjected daily had not been collected as required by condition M6.2 as the flow meters had not operated correctly since they were installed in 2002. Closure of northern landfill area and development of the southern landfill area 60 The existing or northern landfill area was closed on 31 December 2005 as required. The capping of that area was almost completed by 30 April 2006. To date, it still has not been finally completed but a large part of the work has been done. 61 On 30 March 2006, the EPA issued a notice of variation under s 58 of the Act to the defendant. The notice of variation amended the defendant's environment protection licence by permitting, subject to conditions, development of a southern extension area of the landfill. 62 Mr Truman gave evidence that the defendant is hopeful that the development of the southern extension area of the landfill should be complete by September 2006 and that the area can then be used for landfill purposes. Meanwhile, Mr Truman stated the defendant is having to truck garbage or landfill which is being received at the existing facility to Queensland. This is at some considerable cost to the Council. Mr Truman estimates that, assuming the southern landfill area can become operational from September 2006, the Council would have incurred trucking costs in the order of $900,000. Purposes of sentencing 63 Section 3A of the Crimes (Sentencing Procedure) Act 1999 states the purposes for which the Court may impose a sentence on the defendant 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." 64 In this case the purposes in paras (a), (b), (e) and (f) are of particular relevance. 65 The sentence of the Court is an important denunciation of the conduct of the defendant. 66 The sentence must also serve as a public deterrent. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only a light punishment will be imposed: R v Rushby (1977) 1 NSWLR 594 at 597-598. 67 This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines: Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349 at 354; and Director-General, National Parks and Wildlife v Wilkinson [2002] NSWLEC 171 (27 September 2002) at [85] and [93]. 68 The deterrent effect of a fine must send an important message that laws requiring the conservation of the environment and compliance with approvals to carry out activities that may harm the environment, must be complied with. Also, the community must be satisfied that, by the Court's sentence, the offender is given his just desserts. 69 In sentencing for crime, it is important that a sentence reflect both the objective circumstances of the offence and the personal subjective circumstances of the defendant. Objective circumstances Maximum Penalty 70 The maximum statutory penalty is highly relevant in determining the objective gravity of the offence. As stated in Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 698: "(T)he maximum penalty available for an offence reflects the 'public expression' by parliament of the seriousness of the offence." 71 At the time of the commission of the offence, the maximum penalty for a contravention of s 64(1) of the Act by a corporation was $250,000. For offences committed after 1 May 2006, the penalty has been increased to $1,000,000. Seriousness of the offence Importance of monitoring 72 The condition that is the subject of the breach by the defendant that constitutes the offence is one that requires the monitoring of the environmental performance of the activity the subject of the licence. Such a monitoring condition is an important part of the licence and of the licensing system established under the Act. 73 In Environment Protection Authority v Pasminco Broken Hill Mines Pty Limited [2002] NSWLEC 70 (8 May 2002), Bignold J stated: "[36] In accepting the Prosecutor's submission as to the importance of a monitoring condition such as that contained in Condition M7.1 of the Licence, I reject the Defendant's competing submission that the offences involved an 'administrative' type breach of statutory obligation. I am satisfied beyond reasonable doubt that Condition M7.1 and Condition R5.1, do not impose administrative type obligations on the licence holder. Rather, they impose substantive obligations of a significant nature inasmuch as monitoring and reporting serve the important twin functions of self-regulation and full disclosure to the regulatory authority of the results of the requisite monitoring." See also Environment Protection Authority v Lithgow City Council [2003] NSWLEC 425 (18 August 2003), per Pain J at [20]. 74 The licence, including the detailed requirement for monitoring, which obviously includes condition M6.2, is an important part of a precautionary approach and an adaptive management approach. A precautionary approach requires that some margin for error should be retained in any approval, such as a licence for carrying out activities likely to adversely affect the environment, until all the consequences of the decision to proceed with the activity are known. This allows for potential errors in risk assessment. Potential errors are weighted in favour of environmental protection. Weighting the risk of error in favour of the environment is to safeguard environmental room for manoeuvre. 75 One means of retaining a margin for error is to implement an adaptive management approach whereby uncertainties are acknowledged and the area that is affected by the development can be expanded only as the extent of uncertainty is reduced. An adaptive management approach involves, as one of its core elements, the monitoring of impacts of the carrying out of the activity the subject of the approval, evaluating the monitoring data, and adjusting the management approach in accordance with the data obtained from the monitoring process. 76 The licence conditions which require this monitoring implement this adaptive management approach. For these reasons also, the licence conditions can be seen to be an integral part of prudent environmental management and regulation. No implied public trust 77 The prosecutor submitted that the offence is also serious because a contravention of a pollution licence involves a breach of trust. There have been a number of decisions of this Court where the Court has held that a contravention of pollution licence involves a breach of trust: see, for example, State Pollution Control Commission v CSR Limited (1989) 75 LGERA 1 at 4-5; State Pollution Control Commission v Broken Hill Proprietary Co Limited (No 1) (1991) 74 LGERA 351, Environment Protection Authority v Norco Co-operative Limited (2000) 108 LGERA 137 at 144-145; Environment Protection Authority v Port Kembla Copper Pty Limited (2001) 115 LGERA 391 at 398-399, Environment Protection Authority v Collex Pty Limited (2001) 115 LGERA 337 at 344-345 and Environment Protection Authority v Hochtief AG [2006] NSWLEC 200 (28 April 2005) at [95]. 78 However, there is at least one decision which has expressed a contrary view. In Environment Protection Authority v BlueScope Steel (AIS) Pty Limited [2004] NSWLEC 400 (27 July 2004), Talbot J stated that: "I am not prepared to employ the phrase 'breach of trust' to identify the nature of the defendant's responsibilities": at [35] 79 This was said in relation to a charge pursuant to s 64(1) of the Act that a condition of a licence has been contravened. Talbot J said further at [58]: "Mr Jordan made a submission on behalf of the EPA, as prosecutor, that as the holder of a licence under the PEO Act, the defendant has a duty in the nature of a public trust not to cause pollution, otherwise than to the extent authorised by the licence. I have previously expressed reservations about attempting to equate the duty of a licence holder to an obligation arising out of a public trust. I accept that the operator of an industrial undertaking in the nature of that conducted by the defendant has a high responsibility to protect the environment from harm as a consequence of its operations. The legislation recognises the level of this duty by providing that a breach of the Act attracts strict liability. Condition O2.1 of the licence sets an absolute standard that places a strict obligation on the licence holder. The conditions of the licence reflect the nature and extent of the duty imposed upon the licence holder. I would prefer to find the strict obligations of the defendant within the terms of the licence, rather than seeking to extract some abstract principle out of an implied public trust." 80 In my opinion, there is force in what Talbot J has said. It is true that a person, who although initially prevented by a statutory provision from being able to carry out activities that are of a certain nature (scheduled activities) is then permitted to carry them out by the grant of the licence, is afforded a privilege. However, the statute recognises the fact that a licence holder has been given a privilege by requiring that the licence holder comply with the conditions of the licence so issued. Failure to do so constitutes an offence. That Parliament considers a breach of a condition of a licence to be serious is evidenced by this fact and by the magnitude of the penalty that is imposed. As of 1 May 2006, the maximum penalty imposed for such a breach by a corporation is $1 million. However, as indicated earlier, at the time of the commission of the offence, it was $250,000. 81 It is not necessary in order to emphasise the seriousness of the offence of contravening conditions of a licence, to graft onto this statutory scheme the concept of an implied public trust. The seriousness of the offence is evident in the statutory scheme and s 64 of the Act in particular, and in the magnitude of the penalty for breach of the statutory provision. 82 Moreover, it adds nothing to say that there has been a breach of an implied public trust when one comes to sentence an offender who has committed an offence against s 64 of the Act. This is because the very section itself involves the conduct of breaching a condition of licence. Every single offender against that statutory provision would be guilty of the same breach of implied public trust. 83 For these reasons, I prefer the approach taken by Talbot J in Environment Protection Authority v BlueScope Steel (AIS) Pty Limited of finding the strict obligations of the defendant within the terms of the licence and the statutory provision in question, rather than seeking to extract some abstract principle out of an implied public trust. That offender a public body not an aggravating factor 84 The prosecutor also submitted that the offence was serious because the defendant that committed it was a local council. The prosecutor referred to the decision in Environment Protection Authority v Tenterfield Shire Council (2000) 112 LGERA 173 at 182 [47] where Lloyd J said: "The fact that councils themselves have duties to monitor and enforce environmental laws is a factor in favour of a heavier penalty. Councils are aware of the relevant provisions and the need for their enforcement. It is therefore expected that a council keep its own affairs in order, avoiding itself those offences it seeks to prevent others from committing..." 85 However, there is no principle that a penalty should be increased by reason that the defendant is a public authority rather than a private person. In Environment Protection Authority v Midcoast County Council (trading as Midcoast Water) (2003) 136 LGERA 233 at 240 [26] Pain J referred to the dicta of Lloyd J in Environment Protection Authority v Tenterfield Shire Council and added the following: "I take from this that the Defendant should not receive lenient treatment on penalty simply because of its status as a public body. I apply this approach here. It is also necessary to ensure the penalty is adequate as a deterrent but it is not necessary that the penalty be greater simply because the Defendant is a county council." 86 I agree with Pain J that it is inappropriate to increase a penalty merely because the defendant in this case is a local council. I also agree that the proper understanding of what Lloyd J said in Environment Protection Authority v Tenterfield Shire Council is that a defendant that is a public body should not receive a more lenient penalty merely because of its status as a public body. Circumstances objectively serious 87 When one has regard to the circumstances of this case, the offence can be seen to be of objective seriousness. These circumstances include the facts that the failure of the defendant to comply with condition M6.2 was a systemic failure, the considerable longevity of the period of non-compliance with the condition, and the fact that the defendant's failure undermined the integrity and effectiveness of the licence. 88 In relation to the first, that is that there was a systemic failure, it is evident from the evidence of Mr Truman and Mr Mulder quoted earlier that there was no proper system of management or control in place from the outset. Mr Truman, the responsible manager of the Department overseeing public infrastructure works of the Council including the landfill, gave evidence that, regrettably, he had not read the licence or understood the content of the conditions, including condition M6.2, before September 2004. He had not instructed any employees in relation to the licence or its condition. He had no knowledge whether the employees knew of the conditions of the licence. There was no system of reporting to Mr Truman as the responsible manager. He was unaware that there was any breach of the conditions of the licence until September 2004. 89 The system that was in place until September 2004 was that the field staff completed the licence annual returns under Mr Fraser-Quick's supervision and Mr Fraser-Quick then provided those completed licence annual returns directly to the General Manager and not up the chain of command to Mr Truman as the responsible manager. There is no evidence that the General Manager was aware of the conditions of the licence or was aware of any of the problems that were being encountered in the field in relation to the landfill. 90 The Council had implemented a system of audit, by Mr Sutherland, on a quarterly basis since 2002. This involved providing audit reports in writing and holding debriefings on those audit reports with Council staff. Unfortunately those reports and those briefing meetings did not involve either Mr Truman as the responsible manager or, seemingly, the General Manager until September 2004. 91 Mr Sutherland said that he had repeatedly requested the monitoring data, both in the quarterly audit reports and in the meetings with Council staff. Mr Sutherland said that he was told that it would be forthcoming, but it never was. Eventually in despair, Mr Sutherland wrote the letter dated 2 September 2004 directly to the Mayor to bring the matter to a head. 92 Mr Truman, as manager, did seem to be aware of the fact that infrastructure problems were being encountered on a regular basis, including in relation to the new leachate system. However, he failed to require the auditor to report to him about those matters and failed to see what would be the consequence of these infrastructure problems in relation to the relevant licence and operating conditions. 93 The extent of the systemic failure that is outlined by both Mr Truman and by Mr Mulder, as well as by Mr Sutherland, makes this an objectively serious matter. 94 In relation to the second matter, that is the longevity of failure, the plea of guilty admits the facts in the charge that there was a failure to comply with the condition M6.2 for a period from about 31 January 2002 and continuing until 1 May 2005. This is a period in excess of three years. However, even if the period could be seen to be the lesser period commencing after the new leachate system became operational on 30 September 2002, and until certain aspects of infrastructure were apparently fixed by September 2004, as detailed by Mr Mulder in his report, the failure was still for a period of two years. 95 This means that there was not a mere isolated incident. There was a continuing breach of the condition that required monitoring on a daily basis. This also increases the objective seriousness of the offence. 96 Finally, there is the fact that the failure to comply with the monitoring condition M6.2 undermined the integrity of the licence. I have referred earlier to the important function that conditions requiring monitoring have in implementing an adaptive management system. Although condition M6.2 was but one of the conditions that required monitoring, it nevertheless was a condition that served a purpose. The condition which required monitoring of the quality of the ground water for pollutants tells one side of the picture as to whether particular pollutants were escaping, but it does not inform or provide information about the losses, if any, to ground water of leachate in volume terms. Condition M6.2 was required to do that. The fact that condition M6.2 provided data which was then to be used in another condition, condition U1, to prepare the water balance model, shows how important the drafters of the licence considered the monitoring of the volume of leachate to be. 97 As Mr Sutherland said in his letter of 2 September 2004, the failure of the Council to monitor the volume of leachate pursuant to condition M6.2 had the consequence that the Council was unable to prepare the water balance model required under condition U1.1. This in turn meant that the basis for extending the operation of the existing or northern landfill area beyond the trial period was not available. This, of course, led to the EPA varying the licence to require the closure of the existing or northern landfill area by 30 December 2005. In this way, the Council has suffered by reason of its breach. 98 However, that is not the only loss of opportunity that has occurred. If the data had been available and had been provided, there could have been adaptive management throughout the three year period. As it has occurred, there was never any data for the whole of the three year trial period and hence there was never any opportunity to adapt the management of the existing landfill in relation to the volume of leachate. For this reason also, the offence can be seen to be objectively serious. Environmental harm 99 The statutory provision, s 64 of the Act, does not involve any element of causing harm to the environment. However, if contravention of a licence condition results in harm to the environment, the contravention is thereby an aggravated offence. Section 241(a) of the Act which requires the Court to take into consideration the extent of the harm caused or likely to be caused by the commission of the offence. See also Environment Protection Authority v Norco Co-operative Limited (2000) 108 LGERA 137 at 144-145, and Environment Protection Authority v Collex Pty Limited (2001) 115 LGERA 337 at 343 [9] and 344 [18]. 100 In this case Mr Sutherland gave evidence that: "There is no reliable evidence that I have seen that indicates the failure to monitor in accordance with condition M6.2 has resulted in environmental harm or has increased the risk of environmental harm. Licence condition M6.2 is a method by which the Defendant could confirm it was remediating the site in an appropriate manner. The quality of monitoring has no bearing on the physical risk to groundwater, i.e. whether or not the Defendant monitors as required by condition M6.2 makes no difference to the movement or otherwise of leachate into groundwater": p 4-1 of Mr Sutherland's report dated March 2006. Practical measures 101 Under s 241(1)(b) of the Act the Court is required to take into consideration the practical measures that may be taken to prevent, control, abate or mitigate the environmental harm caused or likely to be caused to the environment by the commission of the offence. 102 In this case, as stated above, there was no actual environmental harm. In one sense, therefore, there were no practical measures that could be taken to prevent the harm that did not occur. 103 Nevertheless, there is a more general proposition that is relevant to take into consideration and that is whether there were practical measures that the defendant could have taken to have avoided committing the offence. 104 Mr Truman gave evidence that after the disclosure by Mr Sutherland and by Mr Mulder of the problems with the new leachate system he, amongst other senior managers, implemented measures that had the effect of correcting the contraventions that had occurred beforehand. He addressed each of the three categories of matters that I have referred to above which makes the offence objectively serious. That is, he addressed the systemic failure including the inadequate management and control of field staff and subordinate officers. He evidently addressed and brought to a halt the continued failure to carry out monitoring. He also read, understood and issued directions in relation to the licence and the importance of complying with all conditions, including the monitoring conditions. 105 The defendant is to be commended for the actions it took and the effectiveness which they have had. However, there is nothing disclosed as to why those measures, which were readily able to be taken after September 2004, could not have been taken at an earlier point in time. Foreseeability 106 Under s 241(1)(c) of the Act, the Court is required to take into account the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence. Again, because there was no actual environmental harm, in one sense this consideration is not relevant. 107 However, more generally, if relevant management in the Council failed to have knowledge of and give instructions to field staff and subordinate officers about the conditions of the licence, and failed to implement any system for monitoring and reporting, then it was clearly foreseeable that the offence would be committed. This is, of course, exactly what occurred. Control 108 Under s 241(1)(d) of the Act, the Court is required to consider the extent to which the person who committed the offence had control over the causes that gave rise to the offence. 109 Clearly here, the Council had control over the causes that gave rise to the offence. The measures that were subsequently taken corrected the problem. That evidences the degree of control the Council had over the site and compliance with the conditions of the licence. Complying with orders 110 Under s 241(1)(e) of the Act, the Court is required to take into consideration whether, in committing the offence, the person was complying with orders from an employer or supervising employee. This is not applicable to the facts of this case. Subjective circumstances No antecedent criminal history 111 The Council has no prior convictions for environmental offences. Early plea of guilty 112 The proceedings were commenced on 9 September 2005 and had their first return before the Court on 28 October 2005. The prosecutor wrote to the defendant on 21 November 2005 stating that it would agree to amend the summons by reducing the period of time alleged for the breach. On the next occasion before the Court, 6 December 2005, the defendant entered a plea of guilty. An amended summons was filed on 8 December 2005 by the prosecutor. The amended summons narrowed the period of the charge from "between about 6 March 2001 and continuing until about 1 May 2005 inclusive" to "between about 31 January 2002 and continuing until about 1 May 2005 inclusive". 113 A guilty plea entered by the defendant is of utilitarian value. In the guideline judgment of R v Thompson; R v Houlton (2000) 49 NSWLR 383, the utilitarian value of a guilty plea is stated to generally be between 10 per cent and 25 per cent. The primary consideration in determining where in the range a particular offence falls is the timing of the plea. 114 In this case, the plea should be considered to be at the earliest available opportunity. Accordingly, the full utilitarian value of a guilty plea of 25 per cent should be afforded to the defendant. Contrition and remorse 115 Mr Truman, the responsible manager of the defendant, expressed genuine contrition and remorse from the time he first became aware of the breaches. In his letter dated 20 September 2004, where he set out in detail the problems that had been encountered and the breach, Mr Truman offered genuine expressions of contrition and remorse. In Mr Truman's subsequent letter of 25 October 2004, he conveyed the genuine expressions of contrition and remorse by the General Manager of the Council. The conduct of the defendant subsequent to September 2004 is evidence of contrition and remorse. 116 However, the contrition and remorse is lessened by the failure of the defendant to notify the Environment Protection Authority of the defendant's breach of condition M6.2 at any point in time up until September 2004. Indeed, by the defendant completing the licence annual returns for 2002 and 2003, which returns specifically drew the defendant's attention to condition M6.2, but failing to make any reference to the fact that monitoring pursuant to condition M6.2 was not being carried out and hence there was a breach of the condition, the defendant can be seen to have attempted to evade its responsibilities under law. 117 In the defendant's favour, however, is the fact that it has agreed to pay the prosecutor's costs in the agreed sum of $33,500. Co-operation with authorities 118 Subsequent to Mr Sutherland and Mr Mulder advising the higher management of the Council of the failure to comply with the monitoring requirements of the licence in September 2004, the defendant voluntarily notified voluntarily the EPA and arranged a meeting with them. It disclosed the Mulder & Associates report to the EPA. The defendant also provided documents in full response to statutory notices under s 191 of the Act on 9 April 2005, 6 June 2005 and 5 July 2005. The defendant agreed to the EPA conducting interviews with its employees between 6 to 13 May 2005. Again, all of this conduct shows cooperation by the defendant with the relevant authority. 119 However, all conduct indicative of cooperation dates from September 2004 onwards. Prior to that point in time, there was a lack of cooperation by the defendant, primarily evidenced by its nondisclosure of the problems that were being encountered on the site and which were resulting in the defendant failing to comply with its monitoring requirements. This conduct lessens the mitigating factor of cooperation: see Environment Protection Authority v Collex Pty Limited (2001) 115 LGERA 337 at 343 [10]. Change in practices by the defendant 120 As I have indicated above, the defendant post September 2004 took effective steps to address the systemic and other failures that had led to the commission of the offence. Furthermore, by reason of the variation by the EPA of the defendant's licence, the defendant has had to close the existing northern landfill area. It is in the process of establishing the new southern landfill area which will be a far more environmentally friendly landfill facility. Mr Truman's evidence is that a new system of reporting to senior management has been implemented. There has been new staff training and directions given. 121 There is a new system for audit which requires senior management to be advised. In addition, there is a new system for reporting to the EPA which requires the annual returns to be undertaken, first, by an external auditor and, nextly, reported to Mr Truman as the responsible manager for the infrastructure facilities in Council and, finally, to the General Manager. 122 All of these changes in practices mean that there is no need in sentencing this defendant to include a component for specific deterrence. Costs incurred by the defendant 123 As I have noted, the defendant has paid a price for its breach of condition M6.2 and its inability to develop a water quality model, by not being able to establish a case for the longer term overtopping or continuation of the existing northern landfill. As a consequence, the northern landfill area has been closed and instead the defendant has had to bring forward the establishment of the southern landfill area. 124 As a result of the accelerated timing of the closure of the northern area, the defendant has incurred substantial costs in relation to the closure of that area and for the planning and construction of the southern extension. Mr Truman in his affidavit sets out the extensive costs associated with establishing this area. Obviously not all of these costs can be said to be incurred merely because of the defendant's failure to comply with the licence conditions. They would have been incurred at some point in the future when the southern landfill facility was established. However, the real cost penalty to the defendant is the fact that it has had to accelerate the development of the southern area. This has led to a marginal increase in the costs it would have otherwise had to incur. 125 The defendant has also had to pay for the trucking of waste to Queensland. As I have said, Mr Truman has estimated this to be in the order of $900,000, provided that the southern landfill area can be established by September 2006. Consistency in sentencing 126 I have been referred by both the prosecutor and the defendant to a number of decisions of the Court concerning the breach of licence conditions, including breaches by public authorities. They include Environment Protection Authority v Pasminco Broken Hill Mine Pty Limited [2002] NSWLEC 70 (8 May 2002), (penalties of $3,600 and $7,200); Environment Protection Authority v Bellingen Shire Council [2003] NSWLEC 42 (17 December 2002), (penalty of $15,000); Environment Protection Authority v Lithgow City Council [2003] NSWLEC 425 (18 August 2003), (penalty of $6,000); and Environment Protection Authority v Coffs Harbour Hardwoods (Trading) Pty Limited (2004) NSWLEC 563 (13 October 2004), (penalty of $7,200). 127 As the courts have often said, each case must depends upon its own facts. Looking at the facts, both objective and subjective, of those cases, I find them all to be less serious offences than the current offence committed by the defendant. 128 In my opinion, this case is one which is at the lower end of the middle range; that is on the objective circumstances, in the order of about $55,000. However, against these objective circumstances one must take into account the subjective circumstances of the appellant that I have set out above. These include the lack of antecedent criminal history, the plea of guilty (which attracts a utilitarian discount of 25 per cent), the expressions of contrition and remorse, the cooperation with the authorities, the lack of need for specific deterrence and the absence of environmental harm. There should be a discount, reflecting these subjective circumstances, resulting in a proportionate punishment of a fine of $35,000. Orders 129 Accordingly, the Court orders that: 1. The defendant is convicted of the offence with which it is charged. 2. The defendant is fined the sum of $35,000. 3. The defendant must pay the prosecutor's costs in the agreed sum of $33,500. 4. The exhibits may be returned. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.