Land and Environment Court of New South Wales CITATION : State Pollution Control Commission v CSR Limited [1989] NSWLEC 213 APPLICANT State Pollution Control Commission PARTIES : RESPONDENT CSR Limited FILE NUMBER(S) : 50001 - 50014 of 1989 CORAM: Cripps J KEY ISSUES: :- LEGISLATION CITED: Clean Waters Act State Pollution Control Commission Act CASES CITED: Hair v The Sydney Harbour Tunnel Company 5 April 1989 (unreported) DATES OF HEARING: DATE OF JUDGMENT: 07/01/1989 LEGAL REPRESENTATIVES: JUDGMENT: His Honour: The above fourteen prosecutions were heard together. Matters Nos: 50001/89, 50003/89 and 50006/89 were withdrawn and, accordingly, the formal order I make is that these proceedings be dismissed. In matters Nos: 50002/89, 50003/89, 50004/89, 50005/89, 50007/89, 50008/89, 50009/89, 50010/89, 50011/89, 50012/89, 50013/89, CSR Limited has pleaded guilty and, accordingly, the formal order I make is that in each case the Company stands convicted of the offence with which it is charged. The offences, the subject of the pleas of guilty, occurred between 4 July 1988 and 11 August 1988. Four of the charges arise under s 16 of the Clean Waters Act and the remaining seven under s 17D(9) of the State Pollution Control Commission Act. Section 16 of the Clean Waters Act provides that: "A person shall not pollute any waters or cause or permit any waters to be polluted". Section 16(6) provides that it shall not be an offence under s 16 for a person to pollute waters if he holds a licence and does not pollute the waters in contravention of the conditions of the licence. Section 17D of the State Pollution Control Commission Act empowers the Commission to grant licences for the pollution of waters within the meaning of the Clean Waters Act 1970. Section 17D(9) makes it an offence for any person, being the holder of a licence, to contravene a condition of the licence. In the present case, CSR Limited conducted an alluvial gravel crushing and concrete batching operation on the banks of the Bellingen River approximately 4 kilometres west of Bellingen. It was the holder of a licence granted pursuant to s 17D to discharge polluted material into the Bellingen River subject to a number of conditions, the relevant ones being that: "The licencee shall be responsible for the operation and maintenance of the works and shall ensure that the works are operated at all times by a competent operator in accordance with the conditions of the licence". (Condition 3) and "The waste shall not ... (a) contain any more than 150mg per litre of non-filtrable residues ... ". (additional Condition 2. On 4 August 1988, Mr Greenbank, a Pollution Control Inspector employed by the State Pollution Control Commission, noticed turbidity in the Bellingen River adjacent to the operation being undertaken by CSR Limited. He visited the works and saw polluted water being discharged into the river from two points that have been described as the "lower point" of discharge and the "upper point" of discharge. He estimated that the polluted water was running into the Bellingen River at the rate of approximately 1200 litres per minute from the "lower point" and approximately 2000 litres per minute from the "upper point". Samples of the discharge showed that at the "upper point" there was approximately 1600mg per litre of non-filtrable residue; about 30m downstream from the "upper point" about 750mg per litre of non-filtrable residue and immediately adjacent to the "lower point" about 2200mg per litre of non-filtrable residue. Mr Greenbank also took an upstream sample which showed 0.60mg per litre of non-filtrable residue. It is therefore plain that the discharges at both the "upper point" and "lower point" were grossly in excess of that permissible under the licence. Mr Greenbank interviewed Mr Young on site and was told that the Company was aware that it was polluting the river. Mr Young said: "We have had a problem since the last rains, about a month ago". When asked what he intended to do about it, he said: "we have an excavator booked for Monday next to build 3 new settling ponds and I will go and build an earth wall to stop the water running into the river behind the crusher". Mr Greenbank returned to the premises on 11 August 1988 and spoke to a Mr Gardiner who told him he was the manager. Mr Gardiner said that the discharge at the "upper point" had not been going on for as long as Mr Young had said but that the discharge at the "lower point" had been going on for a "long while but has been worse since the flood about a month ago". Mr Gardiner said Mr Young had only been employed with the Company for about three weeks. On 11 August, Mr Greenbank returned to the quarry and noticed that the discharge had been stopped at the "upper point" by the diversion of waste water from the river into a lagoon. The Company was, however, still discharging polluted water into the river at the "lower point". Mr Greenbank returned two or three weeks after his second inspection and found that all discharge had stopped. The offences to which CSR Limited has pleaded guilty can be placed into four separate categories occurring on three separate occasions. 4 July and 4 August it polluted the river the "lower point". The water was discharged the Company was in breach of the Clean Condition 2 of its licence - being charges 50013, 2. On 4 August 1988 the offences fall into two First, there was discharge at the point" and second, discharge at the "upper This was the occasion of Mr Greenbank's inspection. With respect to each category is charged with being in breach of the Clean Condition 2 of its licence (charges 50002 and The breach of Condition 3 relates to at the "upper" and "lower" points 3. On 11 August 1988 the Company is charged with three all of which relate to discharge at the the Waters Act (charge 50014) and in breach of 2 ( charge 50007) of the licence. CSR Limited does not dispute that it is liable to eleven separate penalties. That is to say it is not disputed, for example, that it is liable for breaches of additional Condition 2 because it discharged more than 150mg per litre into the Bellingen River notwithstanding that this occurred because of lack of adequate supervision in breach of Condition 3. However, it is submitted by Mr Craig on its behalf that although it is liable for eleven different penalties all offences should be treated as a single transaction. I do not accept this submission. Between 4 July and 4 August there was discharge at the "lower point". On 4 August there was discharge at the "lower" and "upper" points. On 11 August there was discharge at the "lower point". Furthermore, and for reasons which I shall presently explain, although I am of the opinion that the breaches of licence conditions on each occasion under the State Pollution Control Commission Act mirror each other (as, for example, where the same discharge is the result of breaches of Condition 3 and additional Condition 2), the breaches of the licence conditions do not mirror the breaches of the Clean Waters Act. Mr Joseph has submitted that the breaches under s 16 of the Clean Waters Act are separate and distinct from the breaches under the State Pollution Control Commission Act. He also submitted that with respect to the offences committed between 4 July and 4 August I should impose a "continuing daily penalty" of $20000 per day for each day. Although he subsequently withdrew that submission he did so in terms which did not acknowledge that it would not be appropriate to impose a daily penalty. I should therefore set out my reasons why, in my opinion, Mr Joseph was correct in withdrawing the submission but not correct if he was thereby intending to convey the impression that it was appropriate for the Court to impose a daily penalty in the circumstances. Both the Clean Waters Act and the State Pollution Control Commission Act provide for penalties over and above the stated penalty to a "further penalty not exceeding $20000 for each day the offence continues". It is to be noted that the charge in each case was that " between 4 July and 4 August" the Company was in breach of the law. The Company was not charged that it continued the discharge throughout the whole period and it was never told that a daily penalty would be sought. The first intimation it had that the SPCC was seeking a daily penalty emerged after the plea of guilty and in final address by the SPCC following upon the address on behalf of the Company. Mr Craig refrained from dealing with the question of a daily penalty for the reason he gave and which I accept, namely, he had no reason to suppose that a daily penalty would be sought. No evidence was adduced with respect to the actual days, if more than one, the discharge occurred and, if so, how much discharge occurred on any one day. I accept the submission on behalf of the SPCC that the offences under the Clean Waters Act and the State Pollution Control Commission Act do not overlap each other. As I have said above, on each occasion breaches of Condition 3 mirror, as it were, breaches of additional Condition 2. But I do not think that the breaches of the Clean Waters Act in each case mirror the breaches of the licence conditions notwithstanding that they are related. CSR Limited was licensed to deposit no more than 150mg per litre into the Bellingen River. It grossly exceeded that amount on the three separate occasions referred to above and, on one of them, at two points. In my opinion, the significant offence, on each occasion, is the offence under the Clean Waters Act. This does not mean, however, that penalties under the SPCC Act for breach of licence conditions should be nominal only (otherwise than in respect of different conditions of the licence). CSR Limited was given a licence to pollute. Its licence was conditional upon it not polluting any more than permitted and maintaining certain standards to ensure that its limit was not exceeded. Its licence placed it in a special category over and above other persons and corporations and consequently imposed on it certain obligations. In effect, CSR was trusted so to conduct its operations that it would not pollute the water more than that for which permission was given. I am conscious that is not, generally speaking, app ropriate to impose a number of separate penalties with respect to single events and transactions which has the effect of exceeding the maximum fines set out by the legislature. If the legislature believes that a penalty is not sufficiently high then it is for the legislature to increase the amount not the Court. Furthermore, I have had regard to the circumstance that the offences under the Clean Waters Act and the SPCC Act are related in the sense that but for the breaches of the licence conditions, the impermissible pollution would not have occurred. Nonetheless, the offences under the Clean Waters Act are separate and discrete. Because the permissible pollution was greatly exceeded, it would seem to me that I should regard the offences under the Clean Waters Act as the more serious. The Company breached the additional obligations it accepted when it received its licence to pollute and, in my opinion, its breaches should be viewed as serious but the penalties should reflect the fact that substantial penaltie s have been imposed under the Clean Waters Act. In Hair v The Sydney Harbour Tunnel Company 5 April 1989 (unreported), the Court imposed minimum penalties for breaches of s 16 of the Clean Waters Act where there were also admitted breaches of licence conditions in respect of which substantial penalties were imposed. But in Sydney Harbour Tunnel the defendant discharged no more material into the Harbour than it was licensed to do and it was conceded that there was no environmental harm beyond temporary adverse visual impact. The circumstances in the present case are markedly different because, as I have said, CSR Limited deposited considerably more non-filtrable residue in the river than the licence permitted and, as will be seen, the potential for environmental damage was significant. Evidence was given by Mr Greenbank that the amount of discharge had the potential to damage macrophytes and to destroy benthic habitat. Benthic animals play an important role in the river ecosystem by recycling nutrients and other matter and form part of the food supply normally available to other animals in the river. Furthermore, the potential environmental damage was not confined to the habitat of benthic animals because, although the gravel fines would sink to the bottom fairly quickly, the clay which was present would not and would stay in suspension in the river over a long period of time reducing light penetration and adding to the problems of organisms dependent upon photosynthesis. In short, excessive silt and sediment washed into a clear fresh water system such as the Bellingen River has the potential to kill benthic life, macrophytes and other photsynthetic organisms. On behalf of the Company, Mr Craig has submitted that although it is possible that damage was done, it has not been established, even on the balance of probabilities, that, in fact, any damage was occasioned to the river system and that if any is to be inferred it should be viewed as insignificant. I infer that some environmental damage occurred although I do not know its extent. But in fixing a penalty I am entitled to have regard to the potential for environmental damage created by the breaches of the law. It would seem to me that having raised the very real possibility of serious environmental damage, I do not disregard it merely because actual damage has not been established beyond reasonable doubt or on the balance of probabilities. CSR adduced no evidence that its pollution did not in fact damage the river to any significant degree. I do not think the Court is obliged to disregard the possible environmental damage because the SPCC has not proved more probably than not that significant damage occurred. I take into account in favour of the Company the plea of guilty that has been entered and its expression of contrition. I also take account of the fact that although this is not the Company's first offence, it has, generally speaking, a good environmental record and at its senior level is conscious of its obligation to abide by environmental laws. However, I also take account of the fact that, in the present case, there was some unexplained delay in the cessation of the excessive pollution. As I have said, I have regard to the circumstance that there was a very real possibility that significant environmental damage occurred. I propose to deal with the question of penalty by reference to the three separate occasions and, with respect to the second occasion, to the two points of discharge involved. 1. 4.7.88 - 4.8.88 There are three charges for this period. Charges 50007 and 50010, being breaches of additional Condition 2 and Condition 3 of the licence are, for reasons given above, treated as treated as one. Charge 50013 refers to a breach of the Clean Waters Act and is the most serious offence. As I have said, it is not appropriate for me to impose a daily penalty but I am entitled to infer that during the period pollutants in excess of that permitted by the licence entered the Bellingen River at the "lower point". On charge 50013 for being in breach of the Clean Waters Act the Company is fined $15000. On charge 50005 being in breach of additional Condition 2 of the licence the Company is fined $3000. On charge 50009 being in breach of Condition 3 of the licence the Company is fined $300. 2. 4 August 1988 For reasons which I have set out above, I regard breaches of the Clean Waters Act as the more serious. Charge 50012 being in breach of s 16 of the Clean Waters Act the Company is fined $8000. To charge 50004 being in breach of additional Condition 2 of its licence the Company is fined $2000. To charge 50008 being in breach of Condition 3 (with reference to "upper" and "lower" points of discharge) it is fined $300. To charge 50011 being in breach of s 16 of the Clean Waters Act at the "lower point" of discharge, the Company is fined $6000. To charge 50002 being in breach of additional Condition 2 of the licence creating discharge at the "lower point" the Company is fined $2000. 3. 11 August 1988 To charge 50014 being in breach of s 16 of the Clean Waters Act with respect to the "lower point" of discharge the Company is fined $15000. To charge No 50007 being in breach of additional Condition 2 of the licence the Company is fined $8000. The breaches on 11 August 1988 are more serious than previously because notwithstanding the warnings given and the promises made significant pollution continued. With respect to offence No 50010 being breach of Condition 3 of the licence the Company is fined $400. Accordingly, the Company in all is fined the sum of $60000. Costs CSR agrees to the prosecutor's estimate of costs with the exception of two items both relating a claim for legal expenses for 23 June 1989. The matter was listed for three days but finished in one day after a plea of guilty was entered. The plea of guilty was notified to the prosecutor about three days prior to the hearing. The prosecutor claimed solicitor's fees for 23 June in the sum of $450 and counsel's fees on a refresher basis of $520. Mr Joseph no longer claims the solicitor's fees for 23 June for the reason that the matter was disposed of on 22 June. That reason also applies, in my opinion, to the claim for refresher for counsel for 23 June notwithstanding Mr Joseph's claim that the SPCC is bound to pay him a refresher for the 23 June due to the lateness of the notification of the plea of guilty. Accordingly, I disallow the sums of $450 and $520 for solicitor's fees and counsel's refresher respectively. In accordance with the agreement, I make an order for costs in the sum of $3905. The order of the C ourt is that the fines be paid to the Registrar of the Land and Environment Court to be dealt with by him according to law. I direct that the costs be paid to the Crown Solicitor. I further order that the time for the payment of the fines and the costs be extended for a period of 28 days from the publication of the judgment. 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.