Land and Environment Court of New South Wales CITATION : Environment Protection Authority v Douglass [No. 2] [2002] NSWLEC 94 PROSECUTOR: Environment Protection Authority PARTIES : DEFENDANT: Grantley Shane Douglass FILE NUMBER(S) : 50066 of 2001 CORAM: Lloyd J KEY ISSUES: Environmental Offences :- penalty - waste disposal - order for costs of clean-up Dangerous Goods Act 1975 LEGISLATION CITED: Environmental Offences and Penalties Act 1989 s 14(2) Protection of the Environment Operations Act 1997 s 241 Waste Minimisation and Management Act 1995 s 64(1) and s 65 CASES CITED: DATES OF HEARING: 04/03/2002, 05/03/2002, 06/03/2002, 07/03/2002, 08/03/2002 and 15/03/2002 EX TEMPORE JUDGMENT DATE : 03/15/2002 PROSECUTOR: Mr D Galpin (barrister) SOLICITORS: Stephen Garrett LEGAL REPRESENTATIVES: DEFENDANT: Mr A M Martin (barrister) SOLICITORS: N/A JUDGMENT: 2 IN THE LAND AND Matter No.: 50066 of 2001 ENVIRONMENT COURT Coram: Lloyd J OF NEW SOUTH WALES Decision date: 15 March 2002 Environment Protection Authority Prosecutor v Grantley Shane Douglass Defendant EXTEMPORE JUDGMENT [No. 2] HIS HONOUR: 1. The defendant has been found guilty of an offence against the Environmental Offences and Penalties Act 1989 in that, on or about 12 July 1998, being the owner of land, he did cause his land to be used as a waste facility without being lawfully authorised under s 64(1) of the Waste Minimisation and Management Act 1995. 2. The outstanding questions are the appropriate penalty, costs and orders pursuant to s 14(2) of the Environmental Offences and Penalties Act. As to the latter, the prosecutor seeks an order that the defendant pay to the Environmental Trust, "a public authority" within the meaning of the Environmental Offences and Penalties Act, the sum of $1,169,488.93, being the costs incurred by the trust in the mitigation of harm to the environment caused by the defendant's commission of the offence. 3. The relevant facts which gave rise to the offence are set out in my judgment in finding that the offence was proved. Those facts need not be repeated. I should however briefly describe some of them together with some additional facts insofar as they relate to the costs order and penalty. The defendant conceded that when he purchased the land in 1997 there were perhaps as many as 3,500 drums of approximate two hundred and six litre capacity (or forty four gallon) drums on the property, most of which contained industrial waste, being chiefly waste solvents. The defendant continued to store more drums on his property containing such waste. The defendant himself said in evidence that he collected about 700 drums of waste and brought them to his land. After the fire which occurred on 12 July 1998, contractors were engaged by the prosecutor and removed more than 4,200 drums from the land. Many of the drums kept on the land were badly corroded or in poor condition, the contents of some of which leaked onto the ground and escaped onto the adjoining properties due to the almost non-existent bunding on the land. The drums contained a variety of toxic substances and flammable liquids being "dangerous goods" within the meaning of the Dangerous Goods Act 1975, "hazardous waste" as described in the Waste Minimisation and Management Regulation 1995, and "industrial waste" as described in the Waste Minimisation and Management 1995. 4. The occupiers of the neighbouring properties and the officers of the prosecutor gave evidence of the existence of a strong chemical odour emanating from the defendant's property, the odours being described as those typical of solvents, being at times pungent, obnoxious and foul. The evidence shows that a number of health hazards are associated with the materials which were contained in the drums on the land. According to the evidence there is potential for these materials to cause headaches, dizziness and nausea in humans. The long-term effects of exposure include the potential for such harmful effects as kidney damage. One substance was identified as benzene, a cancer causing agent; another was identified as perchloroethylene which is suspected of having a potential to cause cancer; and another identified as trichloroethylene which has the potential to cause heart damage. The defendant's land was also used to store other objects such as scrap metal, wire and broken wooden pallets which were scattered around the site and the stacked drums. As a consequence of the fire on the defendant's land, some drums, as described by the witnesses, were exploding and landing across the road from the site. Liquid run off from the defendant's land entered the street gutter, the adjacent premises, the bushland, into an unnamed creek, and then into a creek known as Chain of Ponds Creek. The prosecutor arranged with Hawkesbury City Council for the excavation of a dam within the unnamed creek and which was then lined with black plastic to collect the run off. This creek smelt of solvents and was red in colour. The prosecutor then arranged for a tanker to pump out the temporary dam and dispose the red liquid waste at the Lidcombe Waste Plant. This operation continued for several days. 5. Some days later however it was observed that a plume of polluted water had moved further downstream to Chain of Ponds Creek and to its confluence Currency Creek. In the short term, that is, during the period from 17 July 1998 to 12 August 1998, this contamination of Chain of Ponds Creek by the solvent-type chemicals from the defendant's land resulted in a severe impact on most of the aquatic life in the creek. The aquatic life in Currency Creek was also exposed to waters that were acutely toxic. Such acute effects in Currency Creek lasted for approximately ten days. The movement of a body of reddish coloured and odorous material was observed to be travelling down the creek system over a number of days. The chemicals contained in the samples taken from Chain of Ponds Creek were identified as similar to and consistent with the multitude of solvent chemicals originally contained in the drums on the defendant's premises. 6. Following the fire on 12 July 1998 the prosecutor arranged for a collection bund to be constructed in front of the defendant's land at Box Avenue, Wilberforce. Tankers were then used to pump the liquid material from behind that bund. This continued for several weeks. The prosecutor also arranged for a security guard to be employed to ensure that there was no unauthorised access to the land. The prosecutor also engaged a contractor CWDS Pty Ltd, a company that specialises in managing hazardous waste, to remove the drums and properly dispose of their contents. The drums containing liquids were emptied, crushed and removed from the site and the most of their liquid contents were taken to the liquid waste plant at Lidcombe. The drums containing solids were disposed to landfill. The prosecutor also engaged Transfield Pty Ltd ("Transfield") to undertake clean-up activities on the land. Another contractor Playsafe Pty Ltd was engaged by the prosecutor to install a temporary wire panel fence around the perimeter of the site and erect safety signs. Aargus Pty Ltd was engaged by the prosecutor to assess the contents of 1,356 drums. The clean-up process took a long time. The opening of drums was dangerous and Transfield had to sort and segregate the drums before their removal from the site. In December 1998 Transfield Environmental Services was engaged by the prosecutor to remove the remaining waste materials from the site, cap the site with clay, vegetate the surface and install a permanent perimeter fence. During the Transfield's contract the prosecutor and Transfield apparently disputed an amended cost estimate by Transfield to cap, vegetate and fence the site. By mutual agreement the contract was terminated and the prosecutor then engaged a firm called Theiss Services to carry out the remaining work. Waste Service of New South Wales was also engaged by the prosecutor to project manage some of the activities on the site. Johnson Environmental Technologies was engaged by the prosecutor to take surface soil samples from the site and analyse them to assist the prosecutor in deciding whether to go ahead with capping the site with clay. Collex Pty Ltd was employed by the prosecutor to collect and dispose of the liquid captured in a temporary stormwater basin on the site. 7. The total costs and expenses incurred in connection with this attempt to prevent or mitigate harm to the environment caused by the commission of the offence, and the recovery of which costs and expenses now sought from the defendant are, as I have said, $1,169,488.93. 8. The matters to be considered in imposing a penalty are set out in s 241 of the Protection of the Environment Operations Act 1997. It is convenient to consider each of those matters seriatum. (a) The extent of the harm caused or likely to be caused to the environment by the commission of the offence. 9. I have briefly described the harm caused to the environment by the commission of the offence. This includes the strong odours described by the occupiers of the neighbouring properties, the leakage of the contents of the drums onto the ground and into the neighbouring properties, and particularly the fire and its aftermath. I refer in this respect to the severe and acute impact on both Chain of Ponds Creek and Currency Creek. I accept the submission of the defendant that it was somebody else who chose to put water onto the fire and it was that intervention which largely led to the severe and acute impact on both Chain of Ponds Creek and Currency Creek. However, if the material had not been stored unlawfully on the defendant's land it is likely that there would have been no fire in the first place and no escape of materials into the environment. 10. In addition to actual harm there was very real potential harm arising from the nature of the waste material stored by the defendant on his land. I have noted that this material included dangerous goods; hazardous waste; and waste, some of which was potentially harmful to the health of people. In my opinion the nature of the waste that was stored unlawfully by the defendant and the leakage of such material onto the neighbouring properties together with the extremely harmful potential effects upon persons coming into contact therewith suggests that the offence must be regarded as being in the more serious category. (b) The practical measures that may be taken to prevent, control, abate or mitigate that harm. 11. It is self-evident that practical measures could and should have been taken to prevent, control, abate or mitigate the harm. If the defendant had applied to the prosecutor for a licence under the Waste Minimisation and Management Act to store waste on his land, any such licence would no doubt have contained conditions to such effect. To take an obvious example, the land on which the waste was stored was not properly sealed or bunded, which bunding would have otherwise contained any spillage within the defendant's land. Any spillage on the defendant's land could then have been collected and stored properly in sealed containers or otherwise properly disposed of, thus minimising the risk of escape from the land and of the odours emanating from the site. Moreover it would have been obvious that many of the drums were corroded and leaking and that some measures could and should have been taken by the defendant to cater for such leakages. (c) 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. 12. The harm which was caused to the environment and the likelihood of harm was, in my opinion, entirely foreseeable. Most of the material in the drums was waste solvents and which included liquid that was highly flammable. The material gave off odours of which the neighbours complained. As noted, it was obvious that anyone who went to the defendant's land would have seen that many of the drums were corroded and unsound and that liquid contents were leaking onto the ground. It is equally self-evident that any such material escaping into the environment would cause or be likely to cause harm to the environment. (d) The extent to which the person who committed the offence had control over the causes that gave rise to the offence. 13. The defendant was solely responsible for the use of the land as its owner and was solely responsible for the business which he carried out upon it, namely the collection and storage of industrial waste. The prosecutor told the defendant on four separate occasions that he needed to obtain a licence under the Waste Minimisation and Management Act. On 8 January 1998 the prosecutor issued the defendant with a notice under s 65 of the Act, instructing him to stop receiving waste. The defendant continued to accept drums of waste on the land after receiving the notice. Other considerations 14. All of these considerations and in particular the dangerous and toxic nature of the material stored on the defendant's land suggest to me that this is one of the more serious environmental offences to have come before the Court. It should therefore attract a penalty towards the higher end of the range. The maximum penalty for the offence was at the time of the commission of the offence $60,000. 15. The defendant has given evidence before me. He has no fixed place of abode. He has relied on friends for accommodation. He only has employment on a casual basis. He has been trained as a marine engineer but work as a marine engineer is not available to him. His only substantial asset is the land. He has a second-hand motor vehicle and tools of trade. Under these circumstances the question is posed, what is the utility of imposing a substantial penalty upon the defendant? 16. The purpose of a penalty is not only to act as a specific deterrent but to act as a general deterrent, that is, to discourage others who might be minded to commit similar or like offences in the future. I also must have regard to the seriousness of the offence in this instance. Having regard to all of these considerations I am of the view that a penalty being some 75 per cent of the maximum is appropriate. That is a penalty of $45,000. 17. I now turn to the claim for the costs and expenses incurred in preventing or mitigating the harm to the environment caused by the commission of the offence. I have described some of the activities, indeed the principal activities carried out to prevent or mitigate any further harm to the environment. There is no dispute that the amount claimed was incurred. Again the utility of making the order sought is a question which is raised. I am nevertheless inclined to the view that the order sought should be made. Although it is true that there may be little utility in making the order, the sum which I will order the defendant to pay will become a debt due to the Environmental Trust. The Environmental Trust can then itself choose whether to attempt to recover that sum: whether it does so by way of bankruptcy proceedings or otherwise, is a matter for it. 18. The final question is costs. The parties agree that the prosecutor's costs are $49,517. There will be an order that the defendant pay the prosecutor's costs in that sum. I therefore make the following formal orders: 1. I find the defendant guilty of the offence as charged. 2. The defendant is to pay a penalty in the sum of $45,000. 3. The defendant is to pay the Environmental Trust the sum of $1,169,488.93, being the costs incurred in the mitigation of harm to the environment caused by the commission of the offence. 4. The defendant is to pay the prosecutor's costs in the sum of $49,517. 19. GALPIN: There is one remaining matter your Honour. On the last occasion your Honour made a restraining order in relation to the property until further order. There is a provision in the Protection of the Environment Operations Act, in Div 4 of Pt 8.2, which is where the power sits to have made the restraining order; in s 236, where the Court has made a restraining order; and then the Court orders payment of an amount referred to in ss 246 or 247, there is created by force of this section upon the making of the order a charge on all the properties to which the restraining order applies, to secure the payment to a public authority of the amount referred to. It does refer to ss 246 and 247 and they are in Pt 8.3. The transitional provisions though provide your Honour that Pt 8.2 applies with such amendments as are necessary to the repealed act to the proceedings. In essence what the prosecutor says your Honour is that, when one reads these provisions so as to make them meaningful to the instant case, then the effect of it should be that where your Honour has made a restraining order and then ordered payment under s 14(2), that a charge is created over the property. 20. HIS HONOUR: Well this would seem to be self-executing. 21. GALPIN: Yes it doesn't really require your Honour to make any order. I think the restraining order can be discharged and if it's understood that the charge then arises, the Environmental Trust can proceed to lodge the charge. 22. HIS HONOUR: It can lodge a caveat on the title and do whatever it sees fit to protect its interest. 23. MARTIN: I'd actually ask that the order not be discharged, that it remain as it stands, in order to deal with any possible contrary interpretation of the automatic effect of the sections. It would work in effect to the defendant's advantage to leave the order in place as I understand it your Honour. If that was not the effect of the section it certainly seems to be the intention of the section. I don't see that any further order is needed and a discharge of that restraining order would put us into unknown territory. 24. HIS HONOUR: Well it's in force until further order. If you want to you can come back at any time to have the order vacated. 25. GALPIN: Hopefully the Registrar General will take a sensible view and there'll be no need to return. 26. HIS HONOUR: The court will adjourn. I hereby certify that the preceding 26 paragraphs are a true copy of the reasons for judgment herein of the Honourable Mr Justice Lloyd. Associate 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.