Land and Environment Court New South Wales Medium Neutral Citation: Environment Protection Authority v Shannongrove Pty Ltd (No 2) [2012] NSWLEC 202 Hearing dates: 7 - 9 December 2010 Decision date: 05 September 2012 Jurisdiction: Class 5 Before: Craig J Decision: Orders as set out at [105] of judgment Catchwords: SENTENCE - offence by a company transporting waste to a place that could not lawfully be used as a waste facility - s 143(1) of the Protection of the Environment Operations Act 1997 - application of liquid waste as an agricultural fertiliser - subjective belief that an environmental protection licence was not required for the place to which waste was transported - no intent to harm the environment - family company of prior good character - lack of prior criminality - substantial costs payable - fine imposed Legislation Cited: Crimes (Sentencing Procedure) Act 1999 Fertilisers Act 1985 Criminal Procedure Act 1986 Protection of the Environment Operations Act 1997 Protection of the Environment Operations (Waste) Regulation 2005 Cases Cited: Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 Camilleri Stockfeeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 Environment Protection Authority v Barnes [2006] NSWCCA 246 Environment Protection Authority v Eco Cycle Materials Pty Ltd [2003] NSWLEC 63 Environment Protection Authority v Hanna [2010] NSWLEC 98 Environment Protection Authority v Hardt [2007] NSWLEC 284 Environment Protection Authority v Shannongrove Pty Ltd [2010] NSWLEC 162; (2010) 176 LGERA 31 Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 R v Slattery (1996) 90 A Crim R 519 per Hunt CJ at CL Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 Weininger v The Queen [2003] HCA 14; (2003) 212 CLR 629 Category: Sentence Parties: Environment Protection Authority (Prosecutor) Shannongrove Pty Limited (Defendant) Representation: T G Howard(Prosecutor) P J McEwen SC with Dr S M Berveling (Defendant) Environment Protection Authority (Prosecutor) Bamford Lawyers(Defendant) File Number(s): 50033; 50034 of 2009 Judgment 1Following a trial, I have found Shannongrove Pty Ltd (Shannongrove) guilty of two offences against s 143(1) of the Protection of the Environment Operations Act 1997 (the POEO Act) (Environment Protection Authority v Shannongrove Pty Ltd [2010] NSWLEC 162; (2010) 176 LGERA 31). It is convenient to refer to the judgment in which I determined guilt as "the trial judgment". A sentence hearing having been held, it is now necessary to determine the penalty to be imposed upon Shannongrove for the commission of each offence. 2It is unnecessary to repeat, in any detail, the background to and circumstances in which these offences were committed. However, having regard to the matters raised in the course of the sentence hearing, it will be necessary to refer to some of those facts recorded in the trial judgment. 3The evidence at trial established that Shannongrove had transported liquid waste from the waste processing facility at Eastern Creek, known as the UR-3R Facility, to a dairy farming property known as "Marylands" located at Bringelly. There, the liquid waste was unloaded from the Shannongrove's road tanker into a machine which, when towed behind a tractor, injected the liquid waste into the soil of a farm paddock. The liquid waste was considered by the farm operator as beneficial to both the level of soil moisture in the paddock where it was injected as well as acting as a fertiliser to aid the growing of pasture crops. 4The focus of evidence led by both parties on the sentence hearing conducted before me was directed to the environmental impact occasioned by reason of the soil injection of the waste liquid at Marylands. Shannongrove submitted that the result of soil injection undertaken by it was beneficial. The prosecutor contended to the contrary. That evidence and its consequence will be discussed in detail when I address the question of impact. 5However, I should record that before this evidence was called, it was submitted by Mr P J McEwen SC, on behalf of Shannongrove, that any evidence directed to impact was irrelevant. He submitted that the essence of the offence that I had found proved was the transportation of liquid waste from the UR-3R Facility to Marylands. Injection of the waste at Marylands was not an element of the offence, with the result that the impact of injecting the waste was irrelevant. 6I do not accept that submission. There are two reasons for so doing. First, subsection (3C) of s 143 of the POEO Act, in the form that it took during both charge periods, provided a defence to a charge brought under the section that the transported waste was not deposited at the place to which it was transported. While deposition of waste is not an ingredient of the offence (trial judgment at [75]), the provisions of s 143(3C) indicate that the deposit of waste at the site to which it is transported is relevant to be considered. 7Second, when determining the penalty to be imposed for an offence against the POEO Act, I am required to consider the matters identified in s 241 of that Act. By subsection (1)(a), I am bound to consider: "(a)the extent of harm caused or likely to be caused to the environment by the commission of the offence, ... " 8The application of the statutory provision clearly renders relevant evidence directed to the consequence of transporting waste to a place and there depositing that waste at that place which could not "lawfully be used as a waste facility for that waste" (cf s 143(1) POEO Act). 9Apart from evidence directed to environmental impact, a number of affidavits were read directed to the motives of Shannongrove in undertaking the transport of liquid waste to Marylands, the good character of the principals or directors of Shannongrove and its actions following discovery of the offences in July 2006. Evidence was also given as to the beneficial effect which the injection of waste had on agricultural productivity. Statutory considerations 10In determining the appropriate penalty to be imposed for the commission of these offences, it is necessary that account be taken of the purposes of sentencing, as those purposes are stated in s 3A of the Crimes (Sentencing Procedure) Act 1999 (the CSP Act). Relevantly, those purposes include adequate punishment for the offence (a), making Shannongrove accountable for its actions (e), and denouncing the conduct of Shannongrove in committing the offences (f). 11Section 3A(b) of the CSP Act also identifies as one of the purposes of sentencing as the need for any sentence imposed to act as a deterrent. While, for reasons later given, I do not believe that deterrence of Shannongrove is a factor weighing heavily in the penalty to be imposed, the penalty does need to be sufficient such as to deter other persons from committing similar offences. This is also a matter on which I will make further observation later in this judgment. 12As I have earlier indicated, s 241(1) of the POEO Act requires that a number of matters be considered for the purpose of determining the penalty to be imposed for an offence against the Act. The section relevantly provides: "241Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (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, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee." In the present case, it was not suggested that paragraph (e) had relevance. 13When determining penalty, the Court is also required to take into account any of the aggravating or mitigating factors identified in s 21A of the CSP Act, to the extent to which the facts allow and it would not be contrary to law so to do (s 21A(4)). Although it was initially submitted by the prosecutor that the offence was committed by Shannongrove for financial gain, an aggravating factor identified in s 21A(2)(o), that submission was subsequently withdrawn and no other aggravating factor identified. For its part, Shannongrove relies upon mitigating factors identified in s 21A(3). Those matters will be addressed in due course. 14After taking due account of the statutory provisions I have identified, the appropriate sentence is to be determined by an "instinctive synthesis" of all the relevant objective and subjective circumstances (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357. As expressed by the plurality in Weininger v The Queen [2003] HCA 14; (2003) 212 CLR 629 at [24]: "It is a synthesis of competing features which attempts to translate the complexity of the human condition and human behaviour to the mathematics of units of punishment usually expressed in time or money." 15The sentence must be proportionate to the seriousness of the offence, considered in light of the objective circumstances. That upper limit of proportional punishment having been considered, the interplay of other factors will point to what is an appropriate sentence, having regard to all of the circumstances in the particular case. The objective circumstances, considered in the context of the principles that attend the imposition of a sentence or penalty, will also inform the lower limit of sentencing discretion. Objective seriousness 16The maximum penalty imposed for an offence serves to indicate the seriousness with which an offence of the present kind is regarded by the Parliament. That maximum penalty is, in turn, a reflection of the seriousness for which the community regards commission of such an offence (Camilleri Stockfeeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698). 17As indicated in the trial judgment, there were two charges brought against the defendant under s 143(1) by reason of amendment to the section during the period in which transportation of waste liquid was being undertaken by Shannongrove (at [9] - [12]). The maximum penalty for the first charge period, being from 28 January 2005 to 28 April 2006 (Summons 50033 of 2009) was $250,000 in the case of a corporation. The maximum penalty for the second charge period of approximately nine weeks from 1 May 2006 to 5 July 2006 (Summons 50034 of 2009) was $1M for a corporation. Given that the transportation of waste with which Shannongrove is charged took place predominantly during the period before the maximum penalty was increased, the principal focus should be upon the maximum penalty of $250,000 when determining the seriousness of the offence. 18However, that observation does not mean that the fourfold increase in the maximum penalty after 1 May 2006 should be ignored. 19While a maximum penalty of $250,000 is a significant penalty, the fourfold increase in that penalty from 1 May 2006 is to be taken as reflecting community standards at that time as to the seriousness with which the commission of such an offence is to be regarded. That increase reflects the intention of the legislature that the existing sentencing patterns are to move in an upward manner (R v Slattery (1996) 90 A Crim R 519 per Hunt CJ at CL at 524. However, that observation does not have the consequence that for an offence committed following the increase in maximum penalty, there must be an increase in penalty for a particular offence by the same multiple as the maximum penalty was increased (Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at [37]). The need for a licence 20The gravamen of the offences for which Shannongrove has been found guilty is the transportation of waste to a facility that was not licensed under the POEO Act to receive that waste. Licensing of facilities under the POEO Act to receive waste plays a pivotal role in the regulatory scheme. As I observed in Environment Protection Authority v Hanna [2010] NSWLEC 98 at [38]: " ... the legislature has prescribed a highly regulated scheme for the disposal of waste. This is undoubtedly due to the harm to the environment, including risk to human health, which is, or may potentially be caused by the improper disposal of waste." 21At all times during both charge periods, an environment protection licence was required in order to apply the transported liquid waste from the UR-3R Facility to the paddocks of Marylands. This requirement was the consequence of the provisions of s 48 and Pt 1 of Sch 1 to the POEO Act. As I determined in the trial judgment, the site did not fall within any of the listed exceptions to the classes of "waste facilities" identified in paragraph (1)(f) of Sch 1, nor did the waste have the characteristics identified in cl (3)(d1) under the item "waste facilities" that would have excepted Marylands from the need to be licensed. 22It follows that the statutory scheme regulating premises used for waste disposal was circumvented by the actions which Shannongrove took when depositing waste at Marylands. The capacity of the regulator either to refuse such activity outright or to control the manner in which it could be undertaken was denied. The risk of environmental harm was immediately apparent from this course of conduct. As Talbot J observed in Environment Protection Authority v Eco Cycle Materials Pty Ltd [2003] NSWLEC 63 at [19]: " ... there is a risk, even an invitation, for environmental harm to be caused by commencing a scheduled activity without all of the necessary statutory controls that flow through a licence being in place." 23The constraints applicable to the use of Marylands as a place to which liquid waste from the UR-3R Facility might be taken and deposited by way of soil injection is exemplified by events that occurred after 5 July 2006. Following observations by investigators from the prosecutor of the delivery of liquid waste to Marylands on that day and the discussion had by those investigators with the road tanker driver, an employee of Shannongrove, further deliveries of waste to Marylands ceased. However, in anticipation that deliveries could be resumed at a later point in time, Shannongrove made application for an environment protection licence, enabling Marylands to be used as a "waste facility" for the receipt of liquid waste of the kind that had been transported to the site. 24Under cover of a letter dated 2 February 2007, the prosecutor provided to Shannongrove the draft of a licence that it was prepared to issue. That draft was forwarded to Shannongrove for consideration. 25The draft licence was in evidence before me. A number of conditions of that draft licence demonstrate controls that are likely to have been imposed upon use of the waste liquid at Marylands had a licence been sought during the charge periods. Those conditions included the maximum concentration level of a large number of nominated pollutants at different discharge points on the property (L1); the maximum volume of liquid waste that could be deposited was not to exceed 350 kL/ha (L4.2) (compared to that applied by Shannongrove over an 18 month period which was in excess of 800 kL/ha); land having identified characteristics could not be used for application of liquid waste (O7); identified pollutants and their respective concentrations were required to be monitored and sampled at identified monitoring points (M2); samples of waste being delivered to the premises were required (M7) and six monthly monitoring of soil by sampling was required. In particular, the monitoring of soil pH and soil electrical conductivity along with a range of other soil chemical properties was required at two measuring points by condition M2.2(a). 26Thus, it can be seen that, although the prosecutor was prepared to issue a licence for the continued use of liquid waste from the UR-3R Facility at Marylands, the controls imposed upon its disposal and dispersal at that property were intended to ensure that disposal would be implemented in a manner that differed significantly from that in which liquid waste had been injected into the soil on the property during the charge periods. No analysis of the waste liquid had been undertaken by or on behalf of Shannongrove and no monitoring of the soil is recorded as having been undertaken during that period. 27The draft licence provided to Shannongrove for consideration was not, in fact, taken up by it at any point in time. Moreover, no liquid waste was taken to Marylands by Shannongrove after 5 July 2006. Harm to the environment 28In the trial judgment I found that 5,639.31 tonnes of liquid waste had been transported by Shannongrove to Marylands and there injected into the soil at the direction of the farm manager. I also described the manner in which that liquid waste was generated. In short, it is the liquid waste product of the processes undertaken at the UR-3R Facility which in turn processes municipal solid waste from the local government areas of Fairfield and Blacktown. This waste constituted the kerbside "garbage" collected within those areas. It was "garbage" or waste not identified by the occupier of premises, or not separated by the occupiers, as recyclable material. A significant proportion of its content was putrescible waste. 29The expert evidence led at the sentence hearing indicated disagreement as to whether environmental harm was occasioned to Marylands and its environs by the injection of liquid waste over the charge periods. The principal protagonists in this regard were Dr Brian Murphy, called by the prosecutor and Dr Peter Bacon, on behalf of Shannongrove. Other experts provided affidavit evidence directed to the topic, or rather, aspects of it, but it was deemed sufficient by the parties to focus upon the evidence of Drs Murphy and Bacon. 30Dr Murphy is a soil scientist whose expertise includes the interpretation of soil tests, measurement and management of soil structure, the assessment and management of sodic soil and the mapping and management of saline soils. Dr Bacon is an environmental scientist whose expertise includes the interpretation of soil and water analysis, the assessment of soil 'health' and predicative modelling of soil and water conditions. His work has also included the re-use of effluent on land. 31The focus of the debate between these experts was upon the accumulation of salts in the soil strata at Marylands and the environmental impact which that accumulation, if any, would have. There were two sources of data from which their consideration commenced. The first was a soil landscape map for the area and the second waste liquid and soil samples first taken by officers of the prosecutor on 6 July 2006. The soil landscape map for the area was used to identify the expected characteristics of the soil at Marylands. The general features of the soil within the Marylands site are described in the following way: (a) the surface soils are non-saline, non-sodic, non-dispersible and acidic; (b) the subsoils are becoming saline, are acidic, non-sodic and non-dispersible; and (c) the deep subsoils are becoming strongly saline. Although these characteristics were identified by Dr Murphy, I do not understand Dr Bacon to have disagreed with them. 32The second source of data were the results of liquid waste and soil tests taken by the prosecutor's investigators in July 2006. Those tests involved chemical analysis of samples of liquid taken from the delivery tanker driven by Shannongrove's employee on 5 July 2006; samples and analysis of liquid taken from the waste water tank at the UR-3R Facility on that same day and the analysis of soil samples taken at and in the vicinity of Marylands some days later. Soil samples were taken from the area on Marylands into which liquid waste had been injected and also from an area approximately 1km away that had not been used for injection of liquid waste. The latter sample was used as a control sample. 33While the sampling and testing undertaken in July 2006 was not undertaken by either of the two experts called before me, they had each inspected Marylands in 2009 and taken soil samples for analysis from similar locations within that property. Their test soil results for 2009 are, unsurprisingly, similar. 34Each of Dr Murphy and Dr Bacon focused upon the extent to which soil salinity at Marylands had been affected by introduction of the liquid waste. In the context of the various test results, the extent of soil salinity was reflected in the electrical conductivity measured in the samples. The measure of electrical conductivity was expressed in the various test results as a measure of decisiemens per metre (dS/m). 35Dr Murphy identified the analysis of the control soil sample, being that to which no liquid waste had been applied, as revealing low salinity, measured as being 0.13dS/m. He opined that those results were consistent with the properties of the soils identified for that soil on the soil landscape map. By contrast the mean electrical conductivity of soil samples taken from Marylands in July 2006 showed a mean level to be 2.08dS/m with a maximum of 4.2dS/m and minimum of 0.46dS/m. Dr Murphy considered that these levels showed high to very high salinity and were inconsistent with the salinity levels in soils identified for the site in the soil landscape map. He considered that these high levels were consistent with properties of the liquid waste that had been applied to the area, that liquid waste having a mean electrical conductivity level of 34dS/m. 36While Dr Bacon does not directly address these opinions, his criticisms are more broadly based. He challenges the extent of soil sampling as being sufficient; indicates that samples taken from the tanker at Marylands and the waste water tank at the UR-3R Facility were unrepresentative and asserts that the background levels of salinity at Marylands are not sufficiently known in order to draw the conclusions drawn by Dr Murphy. In his opinion, land clearing more than a century ago in order to accommodate farming activities as well as agricultural practices adopted over that period, could well have affected soil salinity so as to elevate its level to something approaching that measured in the soil samples taken in July 2006. He is unable to determine from the information available whether the control soil sample taken by the prosecutor's representatives represent the salinity of soil in the relevant paddocks of Marylands immediately prior to the introduction of liquid waste. 37If the 2006 data represented all that was available there would be substance in that criticism. However, the results of tests taken in 2009 indicate a considerable reduction in the conductivity then measured. The sample results recorded in Dr Murphy's evidence indicate levels in the upper soil profile and on the higher ground of the land that had been injected with liquid waste as ranging between 0.28dS/m and 0.14dS/m. Based on those figures, it is apparent that salinity had fallen between July 2006 and February 2009 when the latter samples were collected, a period coincident with the cessation of liquid waste injection. 38In his evidence, Dr Bacon was critical of the liquid waste sampling taken from the tanker delivering waste to Marylands on 5 July and sampling of the contents of the waste water tank at the UR-3R Facility on that same day. It was from the latter tank that Shannongrove's tanker was seen to load the waste taken to Marylands earlier in the day. Dr Bacon refers to the wide disparity in the measurement of analytes as between those obtained from the tanker liquid and those obtained from the waste water tank. 39However, that criticism was somewhat undermined in the course of Dr Bacon's cross-examination. He accepted that the preponderance of salts in the liquid waste was likely to be reflected in the analysis of total dissolved solids. Analysis of the waste water tank at the UR-3R Facility indicated that the total dissolved solids yielded a measure of 22,000mg/l. The same analysis of waste liquid taken from the Shannongrove tanker at Marylands was 21,333.3mg/l. 40Dr Bacon's attention was also drawn to the analysis of waste liquid from the same two sources that reflected electrical conductivity. The measure in the waste liquid from the UR-3R Facility was analysed as being 36dS/m while liquid from the tanker was analysed as being 34dS/m. Faced with these comparisons, Dr Bacon conceded that at least on the day of sampling, the liquid taken to Marylands for soil injection had a salinity level which was representative of that same level in the waste water storage tank at the UR-3R Facility. Nonetheless, he observed that those levels were likely to vary given the variation in the waste material brought to the facility for treatment. 41The third broad area of criticism made by Dr Bacon related to the extent of sampling undertaken both in 2006 and again by Dr Murphy in 2009. Standards for testing published by the prosecutor for testing of contaminated sites, required many more samples to be taken than those that had been taken in the present case. While the prosecutor sought to draw a distinction from the number of tests required for contaminated sites, usually required in order to determine the extent of remediation to be undertaken, and those taken in the present case, there is some substance in this criticism. 42The area within Marylands that had been the subject of liquid waste injection was a little over six hectares. Relatively few samples were taken over this area for soil analysis although Dr Murphy considered them sufficient to gain an understanding of the soil profile in 2006. 43The criticism directed to the small number of soil samples is exemplified by the tests taken in 2009. Only four sites were selected by Dr Murphy for soil testing. Two of those were in a upper area of the paddock on which liquid waste had been injected while two were in the low lying areas in which pasture was sparse or bare and which were described by both experts as being either "scorched" or "hotspots". While the level of salinity in the two samples collected from the upper areas showed 2009 levels that I have earlier recorded, Dr Bacon observed that their limited number did not enable a conclusion to be drawn as to the areal extent of salinity at those levels, relatively low as they were. 44By comparison with the levels recorded at the upper levels in 2009, the level of salinity in the scorched areas or hotspots was, by comparison, elevated. The level of electrical conductivity at one such area, described as Site 3, was in the range in the upper soil profile of between 0.73dS/m and 0.52dS/m. At the other site, described as Site 4, the upper level range was between 0.51dS/m and 0.22dS/m. 45Dr Murphy accepted that there had been a reduction in soil salinity between 2005 and 2009. Elevated salinity levels have the propensity to diminish the agricultural productivity of the affected land. While he accepted that this affect had diminished following cessation of liquid waste injection, the level of salinity at the scorched areas or hotspots indicated that the affect of elevated salinity was still being experienced. He indicated that these levels were indicative of an accumulation of salts, some of which may have infiltrated the soil strata and moved further down-slope or entered the groundwater system, ultimately affecting the quality of that groundwater, particularly as it entered local streams. 46Dr Bacon did not accept this conclusion. He acknowledged that the existence of hotspots in 2009 was indicative of elevated salinity in those areas. However, both the tests and his own observations had indicated that the aggregate of all areas so affected was a total of about 30m2 out of an area of approximately 64,000m2 that had been treated with the liquid waste transported by Shannongrove. His evidence also indicated that when he returned to the site in 2010, those areas that in the previous year had been identified as scorched or hotspots no longer appeared. 47Dr Bacon also relied upon evidence from the farm manager as to the productivity of the area that had been treated with waste. That evidence was, in summary, that the paddocks were highly productive with increased crop yields compared with other areas of the property. Further, when the area was grazed by dairy cattle, higher milk production than had previously been the case resulted. Photographs produced in evidence revealed the lushness of the area by comparison with other areas of the property. 48In the face of that evidence, Dr Murphy accepted that the treated area appeared to be highly productive. However, he opined that such an observation was not inconsistent with some accumulation of salt within the soil profile, even if it was at a depth that did not impair the growth of pasture crops. He indicated that such salts are not lost, but rather move within the soil profile. While those salts may be out of the root zone of crops, the existence of salts within the soil may have an impact if, in the future, the land should be differently used. If used for the erection of a building, the existence of those salts could have a deleterious effect upon foundation material placed in the soil. 49Ultimately, Dr Bacon accepted that the scorched areas or hotspots observed in 2009, small in area though they were, did demonstrate a residual impact from the salts introduced to the soil by the injection of liquid waste (Tcpt 22: 4-10). Nonetheless, he would not accept, in the absence of further testing, that the residual impact would extend beyond that area. He accepted that from other recorded observations, the initial impact of liquid waste injection may have detrimentally affected pasture crops. This, he suggested, was no different to the application of fertiliser to pasture at a level which may initially cause some setback but after a short time increases agricultural productivity, as had occurred at Marylands. Overall, therefore, it was his opinion that application of the liquid waste was beneficial rather than detrimental. 50My consideration of all this evidence leads me to be satisfied to the requisite standard that the liquid fertiliser applied to Marylands during the charge periods did elevate the level of salinity in the soils to which it was applied on Marylands. The surface effect of this salinity upon cropping of the property was short term, with the level of agricultural productivity quickly returning to most of the area. There was a residual impact that extended to lower lying areas through to 2009, but in the absence of more soil test data than is available, the evidence does not establish that the areal extent was significant. 51I accept the possibility that elevated salt levels may be present in the lower soil strata, although these would appear to be levels at which the soil profile is either becoming saline or is strongly saline. I am therefore unable to conclude that there is likely long term environmental harm. 52In the result, I find that the injection of liquid waste transported by Shannongrove to Marylands and injected by or on behalf of Shannongrove to the soil had short term environmental impact, having largely abated by February 2009. While it does not appear to have created any adverse effect upon the agronomic environment of Marylands, there remains the possibility of some effect upon the broader environment, although that effect cannot, on the evidence, be described as "likely". In short, the consequence of injecting liquid was in the low range of environmental harm. 53In reaching this conclusion, it has not been necessary for me to adjudicate upon the debate between the experts as to the prediction of likely harm had the liquid waste injection of soil continued beyond 5 July 2006. Shannongrove took it upon itself to cease its activity at Marylands; it applied for an environment protection licence in contemplation of resuming that activity, but ultimately neither resumed the activity nor pursued its licence application. It therefore seems to me that, for the purpose of determining penalty, I should not contemplate the consequence of events that did not occur. Practical measures 54Shannongrove not only transported liquid waste from the UR-3R Facility, but also took responsibility for soil injection of that liquid waste at Marylands (trial judgment at [48]). It was therefore within its capacity to refrain from transporting the waste and carrying out the soil injection exercise until an environment protection licence had been obtained for the disposal of that liquid waste at Marylands. Any doubt as to whether a licence for that purpose was required could readily have been resolved by enquiry of the prosecutor. No such enquiry was made. 55It follows that practical measures were available to Shannongrove to control or mitigate such harm as was occasioned by the disposal of liquid waste at Marylands. Foreseeability of harm 56The prosecutor submits that such harm as was occasioned to the environment, in accordance with the finding earlier made by me, was harm that was reasonably foreseeable. As I understand its submission, Shannongrove denies that this was so. In substance, its denial is founded upon two factors. 57First, it relied upon the definition of "fertiliser" in the Fertilisers Act 1985 which, it was submitted, occasioned the belief that the waste liquid was suitable for injecting into soil used for agricultural purposes. The definition to which reference is made was contained in s 3A of the Fertilisers Act in the following terms: "(1) For the purposes of this Act, fertiliser means: (a) a substance that consists of or contains nitrogen, phosphorous or potassium (or any combination of nitrogen, phosphorous or potassium) and is manufactured, represented, sold or used as a means for directly or indirectly supplying nutriment for the purpose of enhancing the development, productivity, quality or reproductive capacity of vegetation, or (b) any other substance that the Minister declares, by an order published in the Gazette, to be a fertiliser for the purposes of this Act." 58Whatever may have been the subjective belief of the directors of Shannongrove, objectively judged, the fact that the definition existed in the Fertilisers Act did not militate against foreseeability of harm from the liquid waste transported by Shannongrove and used at Marylands. No evidence was given as to the awareness by the company of the chemical composition of the liquid waste nor is it explained why a substance that may meet the definition in the Fertilisers Act was thought to avoid the necessity to observe the provisions of the POEO Act. 59The second basis upon which Shannongrove claims that harm was not foreseeable is a letter from the Department of Environment and Conservation dated 17 June 2005 to Mr P Coffey, a director of Resource Recovery Management Pty Ltd. That letter was provided to Shannongrove on 5 July 2005. The letter identifies amendments to the Protection of the Environment Operations (Waste) Regulation 2005 pertaining to land application of certain wastes. The letter indicates that the Regulation was due to commence on 1 December 2005. It also indicates that the Regulation had been developed "to protect land, food and the environment from contamination by the inappropriate application of wastes to land under the guise of fertiliser." The letter further observes that the amending Regulation would not place restrictions "on lawfully sold fertiliser products that are compliant with the requirements of the Fertilisers Act 1985, including contaminant levels". 60Reliance upon that letter would not seem to me to provide a reasonable basis upon which to conclude that use of the liquid waste from the UR-3R Facility at Marylands did not create any foreseeable risk of harm to the environment. First, it is to be noticed that at the time at which this letter was received, let alone the time at which it was stated that the new regulation would operate, the transportation and injection of the liquid waste in question was already being undertaken by Shannongrove. The first charge that I have found proved relates to the period commencing on 28; January 2005, that is almost six months before receipt of the letter upon which some reliance is placed. Second, as the explanatory material annexed to the letter indicates, the prohibition upon use of any residue waste does not apply if it is waste "sold as a soil improving agent (fertiliser or liming material) or trace element product within the meaning of the Fertilisers Act 1985 and complies with prescribed maximum contaminant levels." There is no evidence that Shannongrove had any understanding of the "contaminant levels" within the liquid waste nor does the evidence establish that the liquid waste was "sold as a soil improving agent". On the contrary, Shannongrove was paid to remove the liquid as waste from the UR-3R Facility (trial judgment at [50]-[53]). 61I accept the submission of the prosecutor that Shannongrove could reasonably have foreseen harm likely to be caused to the environment by committing the offence that it did. Having regard to the process involved in waste treatment at the UR-3R Facility and the nature of the raw material for that waste, coupled with the absence of any analysis of the liquid that it was transporting and applying to land, it was foreseeable that the liquid might harm the soil into which it was being injected. Control over causes 62Shannongrove had control over the causes giving rise to the offences of which it has been found guilty. 63As I understand the submissions on behalf of Shannongrove, it accepts that this is so, although it refers to the understanding held by its directors that the holding of a licence for disposal of liquid waste at Marylands was not required, given the beneficial application of this liquid waste to the land in order to improve agricultural productivity. State of mind and reason for offending 64The offences with which Shannongrove has been charged are offences of strict liability with the consequence that the state of mind of the offender is not relevant to the determination of guilt. Nonetheless, the offender's state of mind and reasons for committing the offence are circumstances to which regard may be had in determining the objective gravity or seriousness of the offence (Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [123] and [140]). 65Lengthy affidavit evidence was received from Neville Gilmartin who, with his wife, are the directors of Shannongrove. Mr Gilmartin was cross-examined on the evidence that he gave during the course of the sentencing hearing. Mr Gilmartin indicated that he had been transporting waste by road tanker for the past 16 years. The transporting of waste by road tanker over that period had, according to his evidence, included the transportation of liquids from "virtually every food factory in and around Sydney". His road tanker was, itself, licensed to transport waste (trial judgment at [42]). It is therefore reasonable to conclude that Mr Gilmartin had a general awareness that a regulatory scheme operated to control the transport and disposition of waste. 66Mr Gilmartin relies upon a number of matters said to support his understanding that no licence was required for the disposition of liquid waste at Marylands. I have already referred to one of those matters being the email communication to Mr Coffey in June 2005. 67Reliance was placed by Mr Gilmartin upon guidelines published by the prosecutor entitled "Environmental Guidelines: Assessment, Classification and Management of Liquid and Non-Liquid Wastes" (the Guidelines). Within the Guidelines the following statement is made: "If the waste is assessed as a non-controlled aqueous liquid waste, a licence is usually not required." It is accepted by the prosecutor that the waste liquid in question is appropriately categorised as a non-controlled aqueous liquid waste. 68The Guidelines also make general statements as to the desirability of wastes being used for beneficial purposes. However, there are a number of statements made in the Guidelines that identify the need for assessment of liquid being transported and taken to a site for disposal in order to determine whether a licence is required. Moreover, the statement that I have earlier quoted from the Guidelines is a qualified statement, there being no evidence to suggest that Mr Gilmartin sought from the prosecutor any advice as to whether the particular liquid waste that he was transporting and injecting at Marylands did attract the need for a licence when disposed of at that site. 69Mr Gilmartin also identified, as informing his understanding that no licence was required for Marylands, the fact that the liquid waste that he was transporting was part of the process that produced the compost sold by the UR-3R Facility for use of land that, to his understanding, was not licensed under the POEO Act. He believed that the compost retained a component of the liquid that he was transporting. 70Mr Gilmartin also gave evidence as to his belief that the soil injection of the waste liquid at Marylands provided agricultural benefit to that property. His belief was founded upon experience that included the observation of the apparent improvement in pastures following soil injection of the liquid. 71The prosecutor submits that there is some evidence suggesting an awareness on the part of Mr Gilmartin of the need for an environment protection licence in order to dispose of liquid waste at Marylands. First, it refers to a letter dated 30 October 2003 from the prosecutor to the directors of Applied Soil Technology Pty Ltd. Mr Gilmartin and his wife were directors of that company at the time at which it was written. That letter drew attention to the provisions of the POEO Act and indicated, in terms, that within the Sydney Metropolitan Area or Extended Regulated Area the application to land of non-controlled aqueous liquid waste required that both a development consent and an environment protection licence be held in respect of the premises to which the liquid waste was applied. Reference was made to the provisions of the schedule to the POEO Act. While acknowledging that he was a director of that company, Mr Gilmartin denied having seen the contents of that letter until it was shown to him in the course of an interview by investigators from the prosecutor in 2008. 72The prosecutor also relies upon a letter dated 4 March 2005 from the Department of Environment and Conservation and addressed to Mr Gilmartin and his wife at their address in Silverdale. The letter addresses an allegation that liquid waste had been disposed of "via land application" at the Silverdale property of Mr and Mrs Gilmartin. Relevantly, the letter stated that under the POEO Act the application of non-controlled aqueous liquid waste to land within the Sydney Metropolitan and Extended Regulated Area required an environment protection licence for the premises to which such liquid waste was taken. 73Although it was acknowledged by Mr Gilmartin that the address to which the letter was directed was his address, he denied ever having received that letter. He states that it was first seen when shown to him in the course of investigating the current offences in 2008. 74The prosecutor accepts that it cannot establish to the requisite standard that these letters were seen by Mr Gilmartin or his wife prior to 2008. They are relied upon only to the extent to which they identify the likely response of the prosecutor had enquiry been made at the time at which those letters were written as to the need for a licence to dispose of the liquid waste that was being transported by Shannongrove to Merrylands. 75In a letter dated 18 July 2005 a soil scientist at the Sydney Environmental and Soil Laboratory wrote to Mr Michael Bonanno who was the technical manager of the UR-3R Facility. The purpose of the letter was to provide test results for metals in the liquid waste being transported from the Facility. In the course of that letter reference was made to recent correspondence from the prosecutor indicating that the only waste "that may be managed to land" without a licence was "Group B Food Waste" which was also non-controlled aqueous liquid waste. The author stated that in his view the prosecutor was wrong in that regard but concluded by saying: " ... before you assume that my opinion is correct I urge you to rely on your own qualified legal advice." I infer that Mr Gilmartin was shown that letter shortly after its receipt by Mr Bonanno. 76However, as the prosecutor points out, the opinion of the author of that letter is qualified by the statement that independent advice should be sought. Although reference to that letter was made in the affidavit evidence of Mr Gilmartin, it is not apparent from the totality of the evidence given by him the extent to which, if at all, he relied upon that qualified advice. 77The prosecutor also points to the evidence indicating that in October 2003 Shannongrove sought a ruling from the prosecutor as to the classification of some waste described as "greasetrap waste" (Exhibit O). This enquiry of the Environment Protection Authority is recorded as having been made on behalf of Shannongrove by Dr Bacon. The fact that an enquiry was then thought appropriate is contrasted with the absence of any enquiry by or on behalf of Shannongrove in relation to the liquid waste transported to Marylands from the UR-3R Facility. 78I accept that Mr and Mrs Gilmartin held a belief that an environment protection licence for disposal of liquid waste at Marylands was unnecessary during the charge periods. However, viewed objectively, there was sufficient material which came to their notice which, together with the experience of Shannongrove as a transporter of waste over many years, reasonably warranted an enquiry of the regulatory authority as to whether a licence was, in law, required. No such enquiry was made. 79I do not overlook the fact that the transportation of liquid waste to Marylands during the charge period was undertaken for reward. However, evidence led before me indicated that, in fact, little profit was made from this enterprise and the prosecutor expressly disavowed a submission that commercial gain, however small, should be regarded as an aggravating factor. Conclusion as to objective seriousness 80Having regard to all of the matters which I have addressed, I conclude that the objective seriousness of the offence is low. Subjective considerations 81Shannongrove has not been convicted of any prior offence. That is a mitigating factor to be taken into account when determining an appropriate sentence: s 21A(3)(e) of the CSP Act. 82A number of character testimonials have been tendered directed to the good character of Mr and Mrs Gilmartin as well as the responsible conduct of Shannongrove in the conduct of its business affairs. Although none of the testimonials tendered referred to the conviction of Shannongrove for the present offences, evidence was given by Mr Gilmartin that each of those providing a testimonial reference had been informed of that fact. The prosecutor did not challenge that evidence. 83Each of those testimonials referred to a lengthy period of association with Shannongrove and its directors and each speak highly of them. I accept them as being relevant to the determination of penalty. 84In the context of good character or responsibility, reference must be made to the fact that Shannongrove voluntarily ceased the transportation of waste to Marylands following the events of 5 July 2006. Its subsequent application for a licence is also relevant in this context. Further detail in respect of each of those matters has earlier been recorded but I identify them as again being relevant in the present context. 85As would be apparent from the facts earlier stated in relation to the state of mind of Mr and Mrs Gilmartin, they believed that their actions were not contrary to law. However, Mr Gilmartin has stated that had he known that the transportation of liquid waste to Marylands was unlawful he would never have undertaken the exercise and states that he was sorry it had occurred. I accept that evidence as being truthful. 86Once the prosecutor's investigations into Shannongrove's activities were made known to Mr Gilmartin, it is apparent that he co-operated with the prosecutor in meeting the requests made of him during the course of investigation. Records sought were provided and assistance was given to the operator of the UR-3R Facility from whom information was sought in the course of this investigation. 87I should also make reference to evidence given by the manager of Marylands. He confirmed that the areas of the property treated with the liquid waste had provided higher crop yields, higher milk production and had resulted in a saving of $50,000 to $60,000 per annum in fertiliser costs. This evidence supports the belief of Mr Gilmartin as to the beneficial use of the liquid waste. Appropriate penalty Specific deterrence 88The fact that Shannongrove has operated for a considerable period of time in the transportation of waste and its application to land would suggest the need for specific deterrence in the present case. As the prosecutor submitted, it would have been a simple matter to make an enquiry of the statutory regulator as to whether an environment protection licence was required to transport waste to Marylands and inject that waste into the soil. 89So much must be accepted. However, I am satisfied that the prosecution of the present proceedings against Shannongrove has been salutary for it. The likelihood of reoccurrence of a similar offence is remote. 90In this regard I also note the evidence from Mr Gilmartin as to the damage to personal reputation that has been suffered because of publicity given to the trial judgment. Publicity of that judgment in some of the media was both selective and exaggerated in its reference to the events that occurred. It seems to me to be unlikely that Shannongrove would wish to attract to itself publicity of that kind in the future. 91Specific deterrence will therefore play only a small part in determination of an appropriate penalty. General deterrence 92My earlier reference to the provisions of s 3A of the CSP Act indicates that a purpose to be considered in imposing a sentence is the prevention of crime by deterring others from committing similar offences. Breaches of the regulatory regime established by the POEO Act must be recognised as breaches for which significant penalties may be imposed. However, this does not mean that Shannongrove should bear an unfair burden of community education (Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 at 570). Consistency in sentencing 93Regard should be had to comparable cases from which guidance can be obtained. However, as the prosecutor submitted, caution must be exercised in considering other cases because of the inevitable disparity between subjective and objective circumstances applicable to those cases, compared to the same circumstances found to exist in the case under consideration. It was also accepted by the prosecutor that the sentencing statistics available from the JIRS database were so limited as to provide no real assistance to the Court when determining the penalty in the present case. The same applies to those cases to which I have been referred, the extent of their assistance being that the imposition of a fine is appropriate in the present case. Costs 94The prosecutor seeks an order for payment of its costs pursuant to s 257B of the Criminal Procedure Act 1986. Although, as I understand it, Shannongrove accepts that costs are payable by it, it has not agreed as to the quantum of those costs. The prosecutor's estimate is $93,500. I will assume, without determining, that the costs to which the prosecutor is entitled will approximate that sum. 95The prosecutor also seeks an order pursuant to s 248 of the POEO Act for payment of its investigation costs. The costs claimed are in the sum of $24,724.76. As I understand it, Shannongrove accepts that a sum on account of investigation costs should be paid but considers that it should not be required to pay the amount claimed because of what it perceives to be shortcomings in the soil and waste water test results. No alternate sum is proffered and I see no basis upon which to reduce the quantum of investigation costs claimed. 96I bear in mind that costs ordered to be paid may properly be taken into account when determining the amount of any fine to be imposed upon Shannongrove (Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78]; Environment Protection Authority v Hardt [2007] NSWLEC 284 at [66]). As will be apparent from the preceding paragraphs, the two items of costs sought by the prosecutor will be substantial and while no mathematical exercise is called for, they will be considered when determining the appropriate penalty. Conclusion as to penalty 97As I have earlier indicated, the imposition of an appropriate penalty or penalties in the present matters is made more difficult by the fact that although there is a single course of conduct, there are two separate charge periods for which a different maximum penalty was provided. The imposition of penalties must also take account of the fact that for all but two months of the total period to which the charges relate, it was the lower maximum penalty that was applicable. 98Undertaking the instinctive synthesis required to determine penalty, I consider that an appropriate penalty to be imposed for the offence relating to the first charge period to be a fine of $30,000. The appropriate penalty; to be imposed for the offence committed during the second charge period is the sum of $20,000. However, these prospective penalties do not take account of the principle of totality. It is to the application of that principle that I now turn. Totality principle 99The prosecutor accepts that the principle of totality "applies with particular rigour" in the circumstances of this case in order to ensure "that the fact of there being two charges does not inflate the penalty that the court would otherwise impose having regard to the totality of what was, in effect, a single episode of offending conduct." 100The prosecutor fairly submitted that this was a case in which it was inappropriate to impose "a crushing penalty". It acknowledged that Shannongrove was a family company and that in committing the offences of which it has been found guilty it did not intend to harm the environment. 101If I was to apply the aggregate penalty assessed for the offences on an individual basis it would be the sum of $50,000. I consider that this exceeds the appropriate penalty for a single course of conduct, particularly taking into account both the legal and investigation costs for which Shannongrove will be liable. I also take into account the fact that a publication order will be made. 102In the result I consider that an aggregate penalty of $35,000 would be appropriate, involving a reduction in the penalty for the first charge period to $20,000 and a reduction in the penalty for the second charge period to $15,000. The imposition of that aggregate penalty would, to my mind, sufficiently reflect the total criminality of Shannongrove's conduct but, at the same time, would not be so small as to undermine the confidence in the administration of criminal justice by failing to address those principles of sentencing that I have earlier identified. Publication order 103The prosecutor seeks an order pursuant to s 250(1)(a) of the POEO Act requiring that Shannongrove's conviction and the penalty imposed be disclosed in both a local newspaper and trade magazine. 104The making of an order for publication of conviction for an offence under the POEO Act is sanctioned by s 250(1)(a) of that Act. As I understand its submission, Shannongrove does not contest the making of such an order but disagrees with the prosecutor as to the form and size which a publication notice should take. The competing submissions have been considered by me and I have determined that the notice should be published in the form annexed to these reasons and of the size indicated in the orders that I make. Orders 105The orders that I make are as follows: Proceedings 50033 of 2009 1. The defendant is convicted of the offence against s 143(1) of the Protection of the Environment Operations Act 1997 as charged. 2. The defendant is fined the sum of $20,000. Proceedings 50034 of 2009 3. The defendant is convicted of the offence against s 143(1) of the Protection of the Environment Operations Act 1997 as charged. 4. The defendant is fined the sum of $15,000. In respect of both proceedings 5. Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act, within 28 days of this order, the defendant, at its own cost, is to place a notice in the first 12 pages of the early general news section of the Sydney Morning Herald newspaper, of a minimum size of 8cm x 12cm, and the publication known as Inside Waste, of a minimum size of a quarter of a page, in the form of Annexure "A" to these orders. 6. Within 35 days of this order, the defendant is to provide to the prosecutor a copy of the notices published in accordance with the preceding order. 7. The defendant must pay to the Registrar of the Court, for payment to the prosecutor, the prosecutor's legal costs as agreed or determined in accordance with s 257G of the Criminal Procedure Act 1986. 8. Pursuant to s 248(1) of the Protection of the Environment Operations Act, the defendant must pay to the prosecutor its investigation costs in the sum of $24,724.76 within 42 days of this order. 9. The exhibits may be returned. ********* ANNEXURE "A" Publication Order CONVICTION FOR WASTE OFFENCES On 5 September 2012, Shannongrove Pty Ltd was convicted of offences in the New South Wales Land and Environment Court. Shannongrove Pty Ltd pleaded not guilty but the Court found the company had contravened the Protection of the Environment Operations Act 1997. Between January 2005 and July 2006, the company transported approximately 5600 tonnes of liquid waste to a dairy farm in Bringelly, NSW, which was not then licensed to receive the waste. The liquid waste was injected into the soil at the property. The liquid waste was generated during the processing of municipal solid waste at a waste treatment facility at Eastern Creek. Shannongrove Pty Ltd was fined $35,000 for the offences. The company was also ordered to place this notification and to pay the Environment Protection Authority's costs. This advertisement has been paid for by Shannongrove Pty Ltd following an order of the Land and Environment Court 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. Decision last updated: 06 September 2012