> Land and Environment Court of New South Wales CITATION : Environment Protection Authority v Metziya Pty Ltd [2003] NSWLEC 196 PROSECUTOR Environment Protection Authority PARTIES : DEFENDANT Metziya Pty Ltd FILE NUMBER(S) : 50123 of 2002 CORAM: Pain J KEY ISSUES: Prosecution :- water pollution - plea of guilty - meaning of harm - appropriate penalty - matters in mitigation - whether order under s 250(1)(c) of the Protection of the Environment Operations Act 1997 should be considered LEGISLATION CITED: Clean Waters Act 1970 s 16 Protection of the Environment Operations Act 1997 s 91, s 120, s 241, s250(1)(c) Axer Pty Ltd v Environment Protection Authority, (2001) 113 LGERA 357; Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304; Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; Environment Protection Authority v Aaron Plant Hire & Earthmoving Pty Ltd (2000) 108 LGERA 300; Environment Protection Authority v Australand Holdings Ltd [2000] NSWLEC 15; CASES CITED: Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368; Liverpool City Council v Mardimiti Pty Limited, (Pain J, NSWLEC, 2 December 2002, unreported) (unpublished, matter no 50062 of 2002); R v Oliver (NSWCCA, 20 March 1980, unreported); R v Thompson; R v Houlton (2000) 49 NSWLR 383; R v Visconti [1982] 2 NSWLR 105; Veen v The Queen [No 2] (1988) 164 CLR 465 DATES OF HEARING: 25/06/2003 DATE OF JUDGMENT: 06/26/2003 PROSECUTOR Ms K Caruana (solicitor) SOLICITORS Environment Protection Authority LEGAL REPRESENTATIVES: DEFENDANT Mr P Clay (barrister) SOLICITORS McIntosh, McPhillamy & Co JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 50123 of 2002 Pain J 26 June 2003 ENVIRONMENT PROTECTION AUTHORITY Prosecutor v METZIYA PTY LTD (ACN 097 844 785) Defendant Judgment Introduction 1. The Prosecutor is seeking an order in its summons order that: the Defendant Metziya Pty Ltd having its registered office located at 307 Anzac Parade, Kingsford, New South Wales, 2032, appear before a judge of the Court to answer the charge that on or about 5 February 2002, at or near Newbridge Road, Blayney, in the State of New South Wales, it committed an offence against s 120(2) of the Protection of the Environment Operations Act 1997 in that it caused waters to be polluted 2. The particulars of the waters then identified in the charge is "a table drain that passes alongside the Northern side of Newbridge Road, Blayney, from 61 Newbridge Road and downstream thereof" . 3. I note that the maximum penalty applicable in this case is $250,000. The Defendant has pleaded guilty to the offence Facts 4. The parties have usefully filed with the Court and relied on an agreed statement of facts. I will repeat the most pertinent parts of that for the purpose of this judgment. As a result of earth moving works carried out at premises occupied by the Defendant at 137 Newbridge Road, Blayney on 5 February 2002 the pollutant, consisting largely of dirt and soil, was discharged from premises into waters, which I have already specified. This was because of a failure to install effective erosion and sediment controls at and around the premises. 5. The earth moving was being undertaken as preparation for construction of freezer works at the Defendant's premises. At the time of the offence there was a large area of exposed earth and soil on the premises. The Defendant had engaged consultants Carpenter Collins and Associates to prepare a site plan with sediment and erosion controls. The plans in question provided for the building of a new dam downstream of the excavation site on the Defendant's premises. At the time of the offence, which followed a substantial rainfall on or before 5 February 2002, that dam had not been built. An existing dam which may have reduced the sediment flow had been rendered inoperable because that dam's wall had been breached. It is agreed there was inadequate sediment fencing in place on the property. 6. Mr George Tanos, one of the Directors of the Defendant, supervised the development on behalf of the Defendant and was present for the majority of the time when the earth works were being carried out. I note there was an affidavit by Mr Tanos relied on by the Defendant in these proceedings. There was also evidence from the occupiers of the neighbouring property, the Priestleys, who occupied the premises known as "Winterwood" at 61 Newbridge Road. They gave evidence, incorporated in the statement of agreed facts and in affidavit material relied on by the Prosecutor, that on 5 February 2002 they saw a flow of sediment laden water flowing from the Defendant's premises through their property, Winterwood, and into the table drain on the northern side of Newbridge Road. It is clear from the statement of agreed facts that the only source of the sediment seen by the Priestleys on 5 February 2002 was the Defendant's premises. 7. There was also evidence that an Environment Protection Authority officer took two samples in the vicinity of the Defendant's premises, one at the breached dam and one under the bridge across the unnamed creek flowing into the Belubula River. These samples were then analysed by the Prosecutor's scientific officer. 8. I note that a verbal clean up direction was issued to the Defendant under s 91 of the Protection of the Environment Operations Act 1997 (the PEO Act) on 7 February 2002, and this was confirmed by a clean up notice issued on 8 February 2002. The Defendant quickly complied with the requirement to clean up which included the cessation of all earthworks immediately, installation of temporary sediment and erosion controls to reduce the risk of further pollution events, and the removal of sediment laden waters from under the Newbridge Road bridge. 9. It is estimated that approximately 8000 litres of sediment laden water was removed from the unnamed creek under the bridge as part of the clean up. It was also agreed in the statement of agreed facts that there was an inspection conducted by officers from the Department of Land and Water Conservation, as it was then known, on 1 February 2002. Those officers observed that not all the sediment and erosion controls that were specified in the Defendant's consultant's plan were in place. A report was prepared by one of the officers who attended on that day expressing concern about the sediment and erosion controls at the site. 10. It was also stated in the statement of agreed facts that on 25 January 2002 the General Manager of Blayney Shire Council had contacted Mr Tanos to draw his attention to the need for sediment control structures to be in place. Section 241 of the PEO Act 11. Section 241(1) factors to be taken into consideration in imposing a penalty, so far as they are relevant are: Section 241(1)(a) The extent of the harm caused or likely to be caused to the environment by the commission of the offence. Prosecutor's submissions 12. The Prosecutor submitted there was actual harm caused by the offence. It was put that the Court can be satisfied on the evidence the sediment laden waters reached the creek and Belubula River. The basis for submitting there was harm was that the dictionary to the PEO Act defines harm to the environment to include: any direct or indirect alteration of the environment that has the effect of degrading the environment, and, without limiting the generality of the above, includes any act or omission that results in pollution. 13. Pollution is defined to include water pollution. Water pollution is defined to include: (a) placing in or on, or otherwise introducing into or onto, waters (whether through an act or omission) any matter, whether solid, liquid or gaseous, so that the physical, chemical or biological condition of the water is changed … 14. The exact amount of polluted water which left the Defendant's premises and flowed down the table drain to the unnamed creek is unknown but it is estimated, as I have said already, that some 8000 litres of sediment laden water was removed on 8 February 2002 by the Defendant. On 5 February 2002 sediment laden waters were observed in the table drain on the north side of Newbridge Road in the unnamed creek and entering into the Belubula River and indeed the Court was shown video evidence to that effect taken on that day. The Court should be satisfied, the Prosecutor submitted, that a large volume of material did enter the Bulubula River. 15. The Prosecutor submitted there was also likelihood of environmental harm. There was suspended particulate matter and high turbidity, which has the potential to cause effects on the environment, in the water released from the premises. The principal effects outlined in the affidavit of Dr Kobayashi, the Prosecutor's scientific officer, are the reduction of light penetration, suppression of the primary production of algae and other aquatic plants with possible mortality of aquatic organisms. 16. The two samples taken indicated extremely high levels of turbidity. Dr Kobayashi surmised that, in his expert opinion, water discharged into the unnamed creek and the Belubula River was very likely to have high turbidity well above the ANZECC and ARMCANZ national guidelines for fresh and marine water quality. It was his view that the discharge was likely to directly harm the aquatic environment of the Belubula River. The Defendant's submissions 17. The Defendant submitted there was no actual harm as a consequence of the incident in the sense that there was no death or impact on any species of plant and animal that was able to be established by the evidence. The harm must mean more than the pollution itself. 18. The Defendant also argued in relation to whether there was likelihood of harm being caused that, while Dr Kobayashi provided his expert opinion in his affidavit as to the likelihood of harm, it is unknown in the actual circumstances what the turbidity levels of the Belubula River or polluted water were before and after the incident as no relevant samples were taken and analysed by the Prosecutor. As Dr Kobayashi does not know what the receiving water quality was, nor does he know the volume of polluted waters that reached the river, the Prosecutor is unable to advise the Court as to the extent of the impact of the polluted waters on the Belubula River. The Defendant submitted I need to be satisfied beyond reasonable doubt and I therefore cannot be certain on this material that there was likely to be an impact of harm to organisms caused by the incident and a likelihood of environmental harm. Finding 19. I accept that there was actual harm within the definition of the PEO Act as a consequence of this incident. I was referred by the Defendant's counsel to a judgment in the matter of Liverpool City Council v Mardimiti Pty Limited , (Pain J, NSWLEC, 2 December 2002, unreported) (unpublished, matter no 50062 of 2002) an unpublished oral decision I delivered on 2 December 2002, where I may have made a finding contrary to this, namely, that the pollution itself was not enough to constitute harm. If I did make such a finding, I do not consider I was correct on that occasion. I do, however, accept that the fact that there is no evidence of actual harm beyond the actual pollution itself will be relevant to the question of penalty in terms of the seriousness of the offence. 20. In relation to whether environmental harm was likely to be caused I consider the observations of Dr Kobayashi do establish beyond reasonable doubt that there was likely to be harm caused as a result of the discharge of the highly turbid waters and waters high in suspended solids into the Belubula River. I was referred by the Defendant's counsel to the case of Environment Protection Authority v Australand Holdings Ltd [2000] NSWLEC 15 in which Pearlman J concluded there was a likelihood of environmental harm given the evidence presented in that case. That case has a lot of similarity to this matter, although I note that the conclusions of the Prosecutor's expert in that matter were expressed in a somewhat more definitive way than Dr Kobayashi in this case. Nevertheless I do accept that the extent of any likelihood of harm is unknown given there is no evidence of the volume of polluted water which reached the Belubula River, or evidence about the water quality of the receiving water of that river. Section 241(1)(b) - The practical measures that may be taken to prevent, control, abate or mitigate that harm. Prosecutor's submissions 21. The Prosecutor submitted there were a number of steps that could have been taken by the Defendant to entirely prevent the discharge and/or prevent or mitigate the harm which arose, and these were set out in the written submissions of the Prosecutor. They included the implementation of adequate sediment controls at the site during construction, ensuring sediment fences were in place at the premises which were adequate and large enough to contain sediment run off, and ensuring that dams on site were able to perform their task. If the dams specified in the plan of the Defendant's consultant had been in place and functioning the incident would not have occurred. The new dam should have been in place before the existing dam walls had been breached. The Defendant should also have followed its consultant's plans so as to correctly place sediment fences. Defendant's submissions 22. The Defendant essentially agreed that measures could have been taken to prevent, control, abate and mitigate the harm to the extent that there was any harm. The Defendant emphasised that based on the Department of Land and Water Conservation officers' inspection on 1 February 2002 the issue was apparently not a matter of grave concern to them before the incident occurred. Finding 23. My overall view would be that measures to prevent, control, abate and mitigate the harm could have been taken. While the Defendant emphasised a lack of action or cause for any concern being raised by the Department of Land and Water Conservation officers in their inspection on 1 February 2002, this does not excuse the Defendant's obligations under the PEO Act. Section 241(1)(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. 24. The Prosecutor submitted that the potential harm was certainly foreseeable given that there was large scale construction work involving a large area of disturbed soil, and there was a potential for sediment to run off the site if sediment and erosion controls were inadequate or ineffective. 25. It was argued the Defendant had notice from authorities such a Blayney Shire Council and the Department of Land and Water Conservation before the date of the incident as to the inadequacy of the controls in place. Further, the Defendant's own consultant envisaged that a large dam would be built down stream of the construction site as a necessary measure, but unfortunately this was not in place at the time of the incident. 26. Essentially the Defendant argued that if I made a finding that there was a likelihood of harm, which the Defendant argued there was not (but I note I have held there was), then the Defendant did accept it was reasonably foreseeable. 27. I note in relation to s 241(d) the Defendant did not dispute that it had control of the cause giving rise to the offence. 28. Section 241(e) is not applicable in the circumstances before me so I do not need to consider it. Other matters for consideration 29. Turning now to more general factors, particularly the gravity of the crime, regard must be had to the culpability of the Defendant and the individual circumstances which led to the commission of the offence. I accept that the Defendant's actions were not deliberately intended to cause the pollution offence with which it was charged, but largely arose as a result of oversight on the Defendant's part. 30. It is also necessary, on the basis of Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683, that the Court have regard to the maximum penalty applicable as this is an expression of the seriousness which the New South Wales Parliament attributes to the offence. I have already noted that the maximum penalty in this case is $250,000. 31. In relation to the seriousness of the matters based on the factors in s 241, I have already noted that there was actual harm, in the sense that the dictionary definition of harm under the PEO Act has been met, and there was a likelihood of harm, although the extent of that likely harm is difficult to quantify. I consider overall the likelihood of harm would be at the low end of the spectrum. It is clear that practical measures could have been taken to prevent the harm and that the harm was reasonably foreseeable to the extent that there was harm to be foreseen. The Defendant has clearly admitted control. 32. In relation to general deterrence, the Prosecutor submitted that sentencing under environment protection legislation must embrace powerful considerations of general deterrence and relied on Axer Pty Ltd v Environment Protection Authority (2001) 113 LGERA 357, particularly the decision of Badgery-Parker J at 367. In making that submission, the Prosecutor argued that companies carrying out construction work should be sent a clear message that adequate steps need to be taken in terms of sediment and erosion control to ensure that waters are not polluted by sediment and other inorganic material running off premises during the construction phase. I do consider these submissions have some weight. 33. However, looking at the issue of specific deterrence, the Prosecutor made a submission that because of the number of failings in the sediment and erosion controls it is appropriate to provide specific deterrence to the Defendant in this case. If I look at the requirements as set out in Veen v The Queen [No 2] (1988) 164 CLR 465 at 477 in relation to considering specific deterrence the Court must have regard to: whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. 34. Given this is the first time that this Defendant has been before this Court, its expression of contrition, and that steps were taken promptly to clean up after the incident, I do not consider there is a particular need for an element of specific deterrence in the penalty to be imposed. 35. I must also consider evenhandedness as a principle of sentencing, having regard to comments in R v Visconti [1982] 2 NSWLR 105 and R v Oliver (NSWCCA, 20 March 1980, unreported) in particular. The Prosecutor's solicitor referred me to three decisions which she considered may provide guidance to the Court in relation to the appropriate penalty given the similarities to this case. The Prosecutor did point out, as it must do, that all of these cases were offences under the Clean Waters Act 1970 which has since been repealed and were at a time when the maximum penalty was only $125,000. The Prosecutor correctly and properly referred me to Cabonne Shire Council v Environment Protection Authority (2001) 115 LGERA 304 where the Court of Appeal cautioned against doubling fines following the doubling of the maximum penalty in the legislation. 36. The particular cases the Prosecutor relied on, and I will not set out all the details of the facts as contained in the EPA's written submissions, were Environment Protection Authority v Australand Holdings Ltd in which the fine levels were $10,000 and $5000 for offences under s 16 of the Clean Waters Act 1970; Environment Protection Authority v Aaron Plant Hire & Earthmoving Pty Ltd (2000) 108 LGERA 300, a charge under s 16 of the Clean Waters Act 1970 in which the Defendant pleaded guilty and was fined $15,000; and Environment Protection Authority v Taylor Woodrow (Australia) Pty Ltd (No 2) (1997) 97 LGERA 368, in which the company did not plead guilty under s 16(1) of the Clean Waters Act 1970 but was ultimately found guilty and fined $20,000. In the last two cases, there were aggravating features in the sense that notices had been served on the relevant Defendants and not complied with. 37. In my opinion the circumstances of the offence warrant that a penalty of $30,000, representing 12 per cent of the maximum penalty, should be imposed, but there are a number of mitigating factors that I should take into account in reducing that amount. The first matter is that of the guilty plea. The Defendant pleaded guilty, I accept, at a very early stage and I consider it is entitled to the full discount of 25 per cent as referred to in the Court of Appeal decision in R v Thompson ; R v Houlton (2000) 49 NSWLR 383. 38. The Defendant has expressed contrition and remorse through its Director, Mr Tanos, in his affidavit. I further note the Defendant has co-operated at all times with the Prosecutor in participating in a record of interview, in the prompt clean up after the pollution event, and further that the Defendant is a significant contributor to the local community in Blayney and is a significant employer in that community. 39. I further note the Defendant has agreed to pay the Prosecutor's cost in the amount of $14,000. 40. In all the circumstances I think the Defendant's penalty should be discounted by a total of 35 per cent, and I consider that a penalty of $19,500 is therefore appropriate. 41. The Defendant has submitted that it wishes the Court to consider making an order under s 250(1)(c) of the PEO Act. The Defendant's solicitor has only very recently received a letter from Blayney Shire Council, dated 25 June 2003, stating that the Council agrees to design and facilitate a project which will enhance the environment of the Belubula River. The letter is in very general terms in terms of the project proposed. The Prosecutor opposes the making of such an order because there is no clear proposal which can be put to the Court now and it considers the matter should be dealt with finally now by way of a monetary penalty. 42. I am prepared to allow the Defendant more time to prepare a defined proposal for consideration by this Court under s 250(1)(c). The proposal would need to be in the amount which I have considered is an appropriate penalty, namely $19,500. I will allow the period of one month for this to be done and will not therefore make the final sentencing determination today. Orders 43. The Court makes the following orders: 1. The Defendant is convicted of the offence with which it is charged. 2. The Defendant must pay the Prosecutor's costs of the proceedings against it in the agreed sum of $14,000. 3. The proceedings are stood over for mention at 9.30am on 11 August 2003, so that the parties can come back before me in relation to s 250(1)(c). 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.