Land and Environment Court New South Wales Medium Neutral Citation: Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26 Hearing dates: 25 March 2014 Decision date: 26 March 2014 Jurisdiction: Class 5 Before: Pain J Decision: See paragraph 82 Catchwords: ENVIRONMENTAL OFFENCES - sentence - plea of guilty to charge of water pollution from livestock exchange facility - medium level of objective seriousness - mitigating factors considered ENVIRONMENTAL OFFENCES - sentence - plea of guilty to charge of failing to immediately notify water pollution incident - first time offence prosecuted - low objective seriousness - impact of recent doubling of maximum penalty considered Legislation Cited: Criminal Procedure Act 1986 s 215 Crimes (Sentencing Procedure) Act 1999 s 3A, s 21A, s 22, s 23 Protection of the Environment Operations Act 1997 Ch 5, Pt 5.7, s 116, s 120, s 123, s 148, s 150, s 151, s 152, s 147, s 148, s 241, s 258 Protection of the Environment Legislation Amendment Act 2011 Cases Cited: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 Environment Protection Authority v Austar Coal Mine Pty Ltd [2011] NSWLEC 252 Environment Protection Authority v Baiada Poultry Pty Limited [2008] NSWLEC 280; (2008) 163 LGERA 71 Environment Protection Authority v Bulga Coal Management Pty Ltd [2014] NSWLEC 5 Environment Protection Authority v Caltex Australia Petroleum Pty Limited [2007] NSWLEC 647 Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134 Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158 Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415 Environment Protection Authority v Ramsey Food Processing Pty Ltd [2010] NSWLEC 23 Environment Protection Authority v Ravensworth Pty Limited [2012] NSWLEC 222 Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314 Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 Hoare v R [1989] HCA 33; (1989) 167 CLR 348 Markarian v R [2005] HCA 25; (2005) 228 CLR 357 Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 R v De Simoni [1981] HCA 31; (1981) 147 CLR 383 R v Slattery (1996) 90 A Crim R 519 R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 R v Visconti [1982] 2 NSWLR 104 Veen v R [1979] HCA 7; (1979) 143 CLR 458 Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465 Category: Sentence Parties: Environment Protection Authority (Prosecutor) Forbes Shire Council (Defendant) Representation: Mr E Muston (Prosecutor) Mr T Howard SC (Defendant) Office of Environment and Heritage (Prosecutor) Marsdens Law Group (Defendant) File Number(s): 50495 of 2013, 50496 of 2013 Judgment Sentencing of defendant for two offences 1Forbes Shire Council (the Defendant) has pleaded guilty to a charge that between about 23 June 2012 and 9 July 2012 at the site of its commercial stock saleyard facility at Back Yamma Road, Daroobalgie, Forbes in New South Wales (the premises), it polluted waters in breach of s 120 of the Protection of the Environment Operations Act 1997 (PEO Act) (offence 1). Particulars of the offence are given in the summons in matter no 50495 of 2013 filed on 4 July 2013 and are described in the Statement of Agreed Facts filed on 5 December 2013 (SOAF). Section 120(1) states: 120 Prohibition of pollution of waters (1) A person who pollutes any waters is guilty of an offence. Note. An offence against subsection (1) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation-see section 169. (2) In this section: pollute waters includes cause or permit any waters to be polluted. 2The Defendant has also pleaded guilty to a charge of failing to immediately notify the relevant authorities of the pollution incident which was the subject of the offence in contravention of s 148 of the PEO Act. Particulars of that offence (offence 2) are given in the summons in matter no 50496 of 2013 filed on 4 July 2013 and are described more fully in the SOAF. Evidence 3The parties usefully agreed a SOAF which provided as follows: The offences ... 2. Offence 1 involved the discharge of effluent, sewage, septic waste, manure and/or animal matter ("effluent") from the Livestock Exchange in the form of surface runoff from an irrigation area to waters comprising an open stormwater drain that flows into an ephemeral creek, dams and downstream thereof. The offence was caused by Council staff pumping the effluent from an effluent dam (after having passed through two anaerobic ponds) through a layflat hose to an irrigation area (and to land outside/adjoining the irrigation area) to lower the level of the effluent dam. The manner of discharge (a single discharge involving strong flow through a lay flat hose) was such as to cause surface runoff of the effluent, which then flowed from the irrigation area to waters. 3. Offence 2 was committed by the Council on 9 July 2012 by reason of the fact that, upon becoming aware of the incident involving the pollution of waters the subject of Offence 1, the Council failed to immediately notify the EPA of the pollution incident and to provide all relevant information about the incident. Offence 1 was a "pollution incident" for the purposes of the reporting obligations under Part 5.7 of the PEO Act. 4. More detailed facts regarding each of the offences are set out below. The Livestock Exchange 5. The Council was at all relevant times the owner and occupier of the Livestock Exchange and had the management and control of the Livestock Exchange. 6. The Livestock Exchange is situated about 8 km north of the township of Forbes on the Back Yamma Road (the Site). It is located in the Lachlan River catchment. 7. The Livestock Exchange was developed to replace the pre-existing livestock saleyard facility known as the Forbes Mid-State Saleyards (the Old Saleyard Facility) located on the Newell Highway which previously operated near urban areas of the township of Forbes. That previous facility was known as the Forbes Mid-State Saleyards (the Old Saleyard Facility). Prior to and while building and commissioning the Livestock Exchange, the Council decommissioned the Old Saleyard Facility and relocated it in stages to the new site of the Livestock Exchange. 8. Council secured a major award for engineering excellence, for the construction of the Livestock Exchange. The award citation stated "Construction of the new Central West Livestock Exchange at Forbes has raised the bar significantly on the standard of stock selling centres, with its focus on animal welfare, environmental compliance, OH&S and functional design." 9. The Livestock Exchange is one of the world's state of the art saleyards and Australia's largest under cover cattle selling centre. It includes the following features: "Canteen, truck driver amenities, ample truck and car parking, separate cattle, sheep and pig selling facilities, 6 bay high pressure truck wash, toilets, soft flooring, automated drafting system, raised buyer walkways, water in all cattle pens, with water & feeding facilities available in holding yards for special livestock sales, stud sale facilities on site including wash bay, with the option of ring or pen selling, advanced security with AV data entry, 24 hour surveillance and good lighting at Livestock dumps". The development consents: Stages 1, 2 and 3 10. Pursuant to various development consents issued in, respectively, 2003, 2009 and 2011, the Livestock Exchange was constructed and commissioned in three (3) stages. The cattle selling facility (Stage 1) opened in January 2006, the sheep auction facility (Stage 2) opened in October 2010 and the pig selling facility (Stage 3) opened in April 2012. 11. The initial development application (the subject of the 2003 development consent) identified the development of the Livestock Exchange as both designated and integrated development and was accompanied by an Environmental Impact Statement (EIS) dated May 2003. The EPA Licence 12. One of the reasons why the development of the Livestock Exchange constituted integrated development for the purposes of the Environmental Planning and Assessment Act was that it required an environment protection licence under the PEO Act by reason of the fact that the Council carries on a scheduled activity at the premises, namely "Livestock Intensive Activities". 13. On 30 September 2005, the EPA granted to the Council Environment Protection Licence No.12375 (EPA Licence) for the Livestock Exchange. The Council continues to hold the EPA licence with respect to the Livestock Exchange. 14. The EPA licence contains conditions on the disposal of waste at the Site. Pursuant to condition P1.2, effluent was permitted to be discharged by pump to a discharge utilisation area, comprising the "Landscaped Area (Irrigated) and "Effluent Irrigation Area, as shown in Figure 3.2 of the EIS, as submitted to the EPA on 12 June 2003" A copy is attached as Annexure A. 15. Condition O4.1 of the EPA Licence relevantly provides that "[e]ffluent application must not occur in a manner which causes surface runoff". Generation and management of effluent 16. Effluent and waste water are produced in the course of the operation of the Livestock Exchange. There are a series of effluent ponds installed at the facility, which receive and treat effluent, including, but not limited to waste waters from the truckwash facility and washdown effluent from parts of the livestock holding areas. Effluent from the hosing down of the Pig yards and the Truck wash goes to the Effluent Dam. Effluent from washing down the Sheep yards goes to the Sheep yard Dam. Unlike the Sheep and Pig yards, the Cattle yard has a soft floor which does not need to be washed out. 17. In February 2006 when the Cattle Yard was opened the Effluent Management System (EMS) adjacent to the Truck Wash was commissioned. 18. All septic waste generated at the Livestock Exchange flows into the effluent dams. This has occurred since the commissioning of Stage 1 (cattle yards and administration building) of the Livestock Exchange in January 2006. 19. The facility was designed to minimise the generation of liquid effluent. 20. The Livestock Exchange, as approved by the development consents, was also proposed to include an effluent irrigation system to use and dispose of effluent by way of irrigation, utilising an Effluent Irrigation Area cropped with Lucerne with application rates having regard to hydraulic and nutrient loading. Under the initial 2003 development application, as reflected in the 2003 EIS, a minimum area of 15 hectares on a paddock or paddocks on the site located at the Effluent Irrigation Area to the west of the stockyards and sale facilities was required to be available to irrigate the effluent expected to be generated at the Livestock Exchange. It was proposed as part of the initial 2003 development application, as reflected in the 2003 EIS to irrigate effluent in the Effluent Irrigation Area. Council's failure to install an effluent irrigation system 21. Notwithstanding that the development proposal for the Livestock Exchange included a proposal to utilise an effluent irrigation system, and notwithstanding the conditions of the EPA Licence (as identified above), the Council, in the period prior to and including the offence period, failed to purchase or commission a spray irrigation system for the application of effluent to the designated effluent irrigation area. 22. In 2008, when the Council submitted a development application for Stage 2 of the Livestock Exchange (the sheep auction facility), the supporting Statement of Environmental Effects prepared by Geolyse, dated November 2008 (2008 SEE), made references to the absence of a commissioned effluent irrigation system. 23. Under the heading "Effluent Irrigation", the 2008 SEE identified under the column heading "As Approved" that the original proposal was to irrigate the main irrigation area using 3 hectares each year in a five year rotation and to irrigate the landscaped areas around the facilities, but noted under the column heading "As built" that "No irrigation required due to lack of water and truck wash not operating" and that "No landscape irrigation constructed". 24. Notwithstanding the identification in the 2008 SEE that the effluent irrigation system had not been installed, the Council did not install an irrigation system in the period up to and including the commission of the subject offences. 25. No detailed design was undertaken for the effluent irrigation system and no system was installed as part of Stages 1 and 2 as there was insufficient water being generated at the site during that period. Physical features of the Livestock Exchange and surrounding land 26. For the purpose of facilitating an understanding of the facts which follow, attached as Annexure B is a sketch map prepared by EPA investigator, Mark Clyne. Although not-to-scale, the sketch map identifies relevant features of the Livestock Exchange and surrounding land and roads and identifies the relevant flow path of the Effluent, relevant physical features and sample points in relation to the pollution of waters offence. The north point of the compass is approximately towards the top of the page. The features of the Livestock Exchange and surrounding land include the following: the sheep, cattle and pig sale facilities and yards (shown as "Sheep Yards", "Cattle Yards" and "Pig Yards"); the truck wash facility (shown as "Truck Wash"); the Effluent Dam (shown as "Effluent Dam" located in the centre of the Livestock Exchange) adjacent to the other effluent dams (marked as "ED1", "ED 2" and "Effluent Storage"); the open storm water drain (shown as "Open Storm Water Drain" and represented by a broken line with arrows running from north of the boundary fence, through the centre of the Livestock Exchange, to the southern boundary fence and beyond; Back Yamma Road (shown at the top (north) of the page); Forest Road (shown at the bottom (south) of the page; the Effluent Irrigation Area (as shown to the west of the saleyard facilities) and as outlined in condition P1.2 of the EPA Licence; the vegetated corridor and grassed area described as the "road verge", immediately to the north of the Effluent Irrigation Area; and the property adjoining the Livestock Exchange site to the south, is a rural property known as "Leaholme", owned and occupied by Michael Smith, including three dams located on that property. 27. It is to be noted, however, that the sketch map at Annexure A is inaccurate in its depiction of the boundary of the irrigation area designated under the EPA licence and the position of the boundary fence. The irrigation area as designated under the EPA licence includes the vegetated corridor shown on the Clyne sketch map north of the boundary fence. The surrounding land/land uses 28. The dominant surrounding land uses are primary production, including dry land farming as well as grazing enterprises. Rural farming properties are located to the north, east and south of the Livestock exchange. Surface drainage prior to the construction of the Livestock Exchange 29. The topography of the land on which the Livestock Exchange is situated and of the surrounding land is gently sloping to the south. Shallow drainage depressions collect surface runoff and direct it to farm dams. 30. Prior to the construction of the Livestock Exchange the site was a rural paddock with an ephemeral creek flowing south from above Back Yamma Road through the Livestock Exchange and onto the adjoining property Leaholme and then continuing in a southerly direction through the paddocks and through 3 dams on Leaholme. 31. South of Leaholme, the creek line enters a table drain on Forest Road and then flows over Forest Road onto another farm property before eventually flowing into Lake Forbes. Surface drainage after the construction of the Livestock Exchange 32. When the Livestock Exchange was constructed the creekline on the site of the Livestock Exchange was altered as part of the approved construction of the facility. Now, and at the time of the offences, the creek line through the Livestock Exchange site comprises an artificial drain or open stormwater drain, which runs through the centre of the site Livestock Exchange and through the associated stock holding paddock. It then flows into the creekline on Leaholme and downstream. The creekline upstream and downstream of the Livestock Exchange was not altered by the construction of the Livestock Exchange. Build up of effluent at the Livestock Exchange prior to the pollution incident 33. As at June 2012 the Effluent Dams at the Livestock Exchange had the following capacity: Dam Operating capacity Volume at 20 June 2012 Anaerobic Settling Ponds 850kL each 1,700kL Aerobic Pond 2,600kL 2,800kL Effluent Dam 6,500kL 9,000kL 34. By sometime around mid-June 2012, the Livestock Exchange effluent dams were nearing their total capacity and exceeding normal operational capacity, partly as a result of a high turnover of trucks using the truck wash facility on the site. 35. Effluent produced at the Site was increased prior to the pollution incident due to the following: (i) the closure of the Old Saleyard Facility truck wash which resulted in an increased usage of the Truck wash at the Livestock Exchange Site; and (ii) the relocation of the Old Saleyard Facility pig yards to the Livestock Exchange Site. Overflow of the Effluent Dam on 20 June 2012 36. Council officer, Michael Rath, was at all relevant times the Saleyard Supervisor of the Livestock Exchange. On Monday 18 June 2012, Mr Rath returned from a week's leave. 37. On Wednesday 20 June 2012, Mr Rath, while adding chemicals to SD1, noticed that the effluent dams were full and that there was an overflow from the Effluent Dam into the adjacent open stormwater drain. The effluent had flowed down part of the open stormwater drain, but remained on the site and had not flowed down as far as the boundary fence line. The spill was contained and did not advance at that time further down the open stormwater drain. Decision on 20 June 2012 to lower level of effluent dam by pumping it out 38. Upon discovering the overflow of the Effluent Dam Mr Rath immediately called Mr Graham to let him know that the Effluent Dam was overflowing and that a pump was needed to lower the level in the Effluent Dam. 39. A decision was made by Mr Graham and Mr Rath to pump effluent from the Effluent Dam to lower the level of the dams onto the Effluent Irrigation Area. It was considered by Mr Graham that this would be preferable to any further overflow from the Effluent Dam into the open stormwater drain. Mr Graham also informed Mr David Tinlin as he had to source and authorise the hiring of the pump from Parkes. 40. Michael Rath then started building a small bank at the point where the Effluent Dam was overflowing with a bob cat to try and stop the flow from the Effluent Dam. No clean up of the spill was made as when the flow was stemmed it seemed to dry up. 41. Council's response to the overflow from the Effluent Dam on 20 June 2012, after discussions between Ray Graham and David Tinlin, was to order a pump to lower the level in the Effluent Dam. Council decided that despite not having a travelling irrigator for the Effluent Dam that the Effluent Irrigation Area was still available for Council to use. Council decided that lowering the level in the Effluent Dam was the priority and using the Effluent Irrigation Area was better than allowing the effluent to run into the open stormwater drain. Council was concerned about the effluent entering the open stormwater drain as it was for clean water only. Council did not want anything further to go into the open stormwater drain and felt it was better to actually pump out the Effluent Dam. The pumping of the effluent in the period 23 June 2012 to 9 July 2012 42. On 23 June 2012, Mr Rath and Council staff commenced using the hired pump to pump out the effluent from the Effluent Dam. The pump was used to pump out effluent from 23 - 27 June 2012 inclusive. 43. On 27 June 2012, the pump broke down and pumping ceased. 44. Pumping resumed on 3 July 2012 and continued until 9 July 2012 when the Council ceased pumping at the request of the EPA. 45. At all relevant times, Mr Peter Kelly was employed by the Council as the Plant and Maintenance Operator at the Livestock Exchange. Mr Kelly's duties included operation and maintenance of plant and equipment including bobcats, tractors and pumps. 46. At all relevant times, Mr Kelly was instructed by Mr Rath on how to undertake his role. Verbal instructions were given to keep the pump going and to move the discharge hose if ponding occurred or if discharge was seen running into the open stormwater drains. 47. On the days on which the pump was operated, it was operated during daylight hours, not overnight. It was refueled every four hours or so. Pumping of effluent to the irrigation paddock 23-25 June 2012 48. Between 23-25 June 2012, the effluent was pumped out by Council staff to a point in the paddock in the Effluent Irrigation Area. The pumping out of the Effluent Dam caused some surface runoff, which started to flow towards the south east within the Effluent Irrigation Area, but it did not flow into the open stormwater drain at that time. Pumping of effluent to the vegetated corridor 25-27 June and 3-8 July 2012 49. On 25 June 2012, after utilising some additional lengths of pipe (lay flat hose), the end of the pipe was moved further to the north and the effluent was pumped out onto the vegetated corridor in the Effluent Irrigation Area. 50. On 27 June 2012, the pump broke down and was not operated again until 3 July 2012. 51. From 3 July 2012 to 5 July 2012, pumping of effluent from the Effluent Dam continued into the vegetated corridor in the Effluent Irrigation Area. During this period, the end of the pipe was moved to different locations within the vegetated corridor. Once the pipe had been moved to the vegetated corridor Mr Rath kept checking it and it seemed to be soaking into the ground well and he then moved the hose within the tree one to an crest amongst the trees as he was hoping that it was going to run back and into the dry on the western side back towards Parkes Road. 52. On 5 July 2012, Mr Rath moved the end of the hose to the road verge adjacent to Back Yamma Road, which is located just to the north of the vegetated corridor and is outside the Effluent Irrigation Area. 53. On the weekend of 7 and 8 July 2012, when there was no one else at the Livestock Exchange, Mr Rath went out and fuelled up the pump and returned in about 3 or 4 hours to refuel it. 54. Mr Rath states that on the weekend of 7 and 8 July 2012, he did not notice effluent flowing into the open stormwater drain. He was hoping the effluent would just soak into the ground. 55. He is not completely sure as there might have been a bit in the drain. It might have been wet but there was nothing running at the time in the drain. He only looked from where the pump was located. He did not walk down and get over the fence. 56. At the junction where the paddocks on the Livestock Exchange land join and where the fence lines intersect and the gates is a quantity of dirt and/or shale material had been deposited because the ground there was boggy and the deposition of the shale material was necessary to enable stock to be moved between the paddocks through the gates. 57. Mr Rath states that on the weekend of 7 and 8 July 2012 he observed the effluent starting to seep under the fence lines on the Livestock Exchange land towards the stormwater. However, at the time Mr Rath was not concerned as the water appeared to be a little bit stagnant and he did not think at the time that it was from the flow from the vegetated corridor. Pumping of effluent to road verge of Back Yamma Rd on Monday 9 July 2012 58. On Monday morning 9 July 2012, Mr Rath moved the end of the hose to another location on the road verge adjacent to Back Yamma Road, which is located just to the north of the vegetated corridor and is outside the Effluent Irrigation Area. The road verge on Back Yamma Road onto which Council pumped effluent on the morning of 9 July 2012 was publicly accessible. 59. The reason the pipe was moved so that it discharged onto the road verge on Back Yamma Road was because Mr Rath and Mr Graham felt that because they were not actually using an irrigator in a spray operation, but were discharging the effluent as a bulk discharge through the end of the pipe, this would ensure that it had the longest possible travel path from the discharge point to the drainage system. It was their intent to pump the effluent to the road verge and then let it flow back into the Effluent Irrigation Area. Volume of effluent pumped out from 23 June to 9 July 2012 60. The volume of effluent pumped on each of the relevant dates, as calculated by David Tinlin, Manager of Technical Services at Forbes Shire Council is set out in the following table. [table deleted] [the table identifies that 11, 260.8 kL total effluent was discharged to the Effluent Irrigation Paddock] Inspections carried out during the pumping 61. Council did not undertake any organised inspection program for the disposal of effluent to determine compliance with the EPA Licence during the period that the effluent was being pumped from the Effluent Dam. Informal inspections were undertaken when the pump was being refuelled. 62. Michael Rath was aware that Council had to be keeping an eye on whether any effluent left the Livestock Exchange site. Ray Graham spoke to Michael Rath on numerous occasions about keeping an eye on that. 63. No formal instructions were given. Only verbal instructions were given and assumptions were made that Michael Rath would pass on that information to the staff. Inspections were carried out, but only to refuel the pump and no instructions were given to report back to Ray Graham or to anybody else if they noticed anything going into the drains. The flow of effluent onto the adjoining property "Leaholme" on 8 and 9 July 2012 64. Michael Smith owns and lives at 'Leaholme', a sheep and cattle farm of approximately 360 acres in size, which shares a boundary with the Livestock Exchange (see Annexure A). Mr Smith has been employed by the Council for the past fifteen (15) years. For the last twelve he has been employed as a Grader Operator. 65. On Sunday, 8 July 2012 at about 4:30pm, Mr Smith went down to his paddocks to feed his cattle when he noticed a flow of what he thought was water flowing from the open stormwater drain on the Livestock Exchange site into his property. He walked onto the Livestock Exchange site and saw that the flow appeared to be coming through the Effluent Irrigation Area and flowing through into the open stormwater drain at the 4-way gate located on the fence line between the Effluent Irrigation Area and the stock holding paddock on the Livestock Exchange site. Upstream of this point, the open stormwater drain was dry. 66. Mr Smith saw a pump sitting alongside the Effluent Dam with a 5 or 6 inch pipe attached to it. It was not operating at this time. He followed the pipe and saw that it ran from the pump up through Effluent Irrigation Area up towards Back Yamma Road, where it finished about 20 metres short of the tree line marking the vegetated corridor. 67. Mr Smith saw that there was no irrigation equipment attached to the end of the pipe and that the ground around the end of the pipe was very wet. He followed a discernible flow line and saw that effluent had pooled near the 4-way gates at the boundary of the Effluent Irrigation Area and the stock holding paddock on the site. He could see that effluent was flowing from this pooled area into the open stormwater drain and then flowing down that drain towards his property. 68. Mr Smith followed the flow of effluent down the open stormwater drain onto his property. Where the effluent crossed his boundary he estimated it was approximately 2.5 metres wide and about 100mm deep in the ephemeral creek line on his property. 69. He followed the direction of flow and saw that 2 of his 3 dams (those marked "Dam 1" and "Dam 2" on the sketch map were full and overflowing, were dark in colour and were affected by a slight odour of livestock effluent. The flow had not reached the third (most southerly) of Mr Smith's three dams (that which is marked "Dam 3" on the sketch map in Annexure B). The flow was about 20 metres away from Dam 3 at this time, according to Mr Smith's estimate. 70. At about 8am on Monday 9 July 2012, Mr Smith left his home and drove down Forest Road along his southern boundary. As he drove along the road he saw that the southern-most of the three dams on his property (shown as "Dam 3" on the sketch map in Annexure A) had overflowed and was discharging through the spillway. It was then flowing off Mr Smith's property into the table drain on Forest Road. The table drain was full and there was a flow across Forest Road into the neighbouring property to the south. 71. Mr Smith drove back to the boundary between the Livestock Exchange and his property and could see that effluent was flowing from the Livestock Exchange onto his property. He also could see that there was a person working at or near the pump located next to the Effluent Dam. Discharge reported to the EPA pollution line on 9 July 2012 72. Mr Smith calls the EPA pollution line at about 9:06am to report the discharge and request that the EPA make the Council cease pumping. 73. At about 9:30am, EPA officer Ledger spoke with Mr Smith and then a second Environment Line caller, Ms Filmer, concerning the discharge from the Livestock Exchange. Ms Ledger then contacted the Council prior to leaving Bathurst at about 10:30am to drive to Forbes. Ms Ledger spoke with Ray Graham of the Council, and said she had received a call about effluent flowing from the Livestock Exchange site and into a neighbours dam and asked Mr Graham if he knew anything about that. Mr Graham said "We needed to pump out from one of our dams as it was nearly full. We have set up a pump and have been pumping water to stop it from overflowing." Ms Ledger then directed the Council to cease pumping. Cessation of pumping on 9 July 2012 74. Following his conversation with Ms Ledger at 10:30am, Mr Graham contacted Mr Rath and requested that the pumping cease. The pumping ceased at about 12:30pm. 75. During the morning of Monday 9 July 2012, before receiving the EPA direction to cease pumping, Mr Rath had seen that the effluent was entering the open stormwater drain and was "going down there pretty well". He did not immediately cease pumping and did not notify anyone. Council's failure to immediately report on 9 July 2012 76. Upon Mr Rath observing the effluent entering the open stormwater drain channel on the morning of 9 July 2012, the Council had an obligation under section 148(2) of the PEO Act to immediately report the pollution incident to, inter alia, the EPA and to provide all relevant information about the incident. The Council failed to do so. 77. The EPA became aware of the incident upon it being reported to the Environment Line on the morning of 9 July 2012. There was no communication about the pollution incident between the Council and the EPA until EPA officer Ledger, phoned Mr Graham before 10:30am on 9 July 2012. EPA Inspection of Livestock Exchange on 9 July 2012 78. At about 10:30am on the 9 July 2012, EPA Officers Ledger and Clyne left from Bathurst to travel to the Livestock Exchange at Forbes. At about 12:30pm the EPA arrived in the area of the Livestock Exchange. Prior to going to the Livestock Exchange the EPA Officers drove down Forest Road. EPA officers saw the entry road into Mr Smith's property and a further 100 to 200 metres along they observed water flowing from a table drain across Forest Road and continuing on through a paddock in the direction of Lake Forbes. 79. At about 1pm, on 9 July 2012, EPA officers arrived at the Livestock Exchange and inspected the site. During this time they made observations and took photographs contained in Annexure C from Exhibit MJC 1 at Tabs 4 and 9. 80. The EPA officers saw that on the edge of the Effluent Dam there was a large pump with Coates Hire written on it and a pipe leading from the pump into the Effluent Dam. They also saw that there was a pipe leading from the pump and running along the ground, across a stormwater drain and into the irrigation paddock. Annexure C contains photographs 1 and 2 and photographs 61 to 70 of the dam and pump. 81. The level of the Effluent Dam was low. The pump was not in operation at that time. It appeared that the Effluent Dam had recently been pumped out as the walls of the dam were still wet. 82. EPA officers followed the pipe through the Effluent Irrigation Area to the border of the vegetated corridor. The pipe ran at approximately a 45 degree angle through the paddock from the pump in the direction of Back Yamma Road. The ground was very wet under foot and areas where observed that had what appeared to be deposits of sludge material on the ground between the vegetation. 83. Access through the fence into the vegetated corridor was difficult, so the EPA officers drove to a point near the entrance to the Livestock Exchange where access to the vegetated corridor was possible. They then entered the vegetated corridor. The ground was initially dry underfoot and got progressively wetter. Ms Ledger could see a large pool of water in the area which was flowing in a southerly direction through the vegetated corridor. Ms Ledger noticed that the flooded area had a distinct odour that smelt like effluent to her. 84. At around this time the EPA officers were approached by Ray Graham. Mr Graham informed the EPA that he was aware that the road verge was not part of the EPA Licence and that irrigation equipment was required on the Effluent Irrigation Area under the EPA Licence. He said that there was no irrigation equipment at the Livestock Exchange as Council "were working towards that and getting quotes." 85. When asked what stage this was at Ray Graham said, "Council decided not to go ahead with that because it is too expensive" and that "the Mayor had made that decision last week, I think it was Wednesday evening I got a call from the Mayor and was told not to proceed with it any further." 86. The EPA officers could see that the pipe extended past the vegetated corridor under the fence onto the road verge on Back Yamma Road. At the point where the pipe entered the road verge it passed under a fence. A car jack had been placed under the fence and the fence jacked up to allow the pipe to fit underneath. The jack and fence can be seen in photographs 12 to 14 in Annexure C. 87. At the end of the pipe, Ms Ledger saw a large quantity of dark sludge material which had come from the pipe. There was a strong odour of cattle effluent in the area around the dark sludge. The sludge had flowed down from the road verge towards the vegetated corridor. 88. Ms Ledger saw another dark patch on the ground, walked up to that area and saw that it was also wet and contained some sludge material and had the same odour (which Ms Ledger associated with effluent ponds and sludge from saleyards and feedlots). 89. The EPA officers were then approached by Mr Smith. They spoke with Mr Smith and then in his company drove to the point on Forest Road where the water was flowing over Forest Road. At this point, they could see a large quantity of water flowing from a farm dam on Michael Smith's property. The flow was following an ephemeral creekline and entering into a table drain along Forest Road, before flowing over the road and continuing down the ephemeral creek line in the direction of Lake Forbes. The water in the table drain can be seen in photographs 25 to 26 in Annexure C. 90. The EPA officers then inspected Mr Smith's property. They could see a flow of water along the ephemeral creek line through each of the three dams. 91. They then drove to the boundary fence between the Livestock Exchange and Mr Smith's property. At this point they could see the flow of water entering Mr Smith's property. On a closer examination of the quality of the discharge at this point, Ms Ledger could see that it contained what appeared to be a sludge type material floating on the surface. She noticed a slight odour she would associate with stock effluent. The sludge material on the water can be seen in photographs 55 and 56 in Annexure C. 92. The EPA officers could see that the open stormwater drain on the Livestock Exchange site was dry until the point of the 4-way gates at the internal boundary fence between the irrigation paddock and the stock holding paddock. At this point there was a large quantity of liquid flowing from the Effluent Irrigation Area into the open stormwater drain: photographs 129 to 131. 93. On the ground in the area of the gates there was what appeared to be a load of soil and rock that had been dumped there. It appeared to have been dumped in an attempt to bund the liquid flow. This area can be seen in photographs 71 to 75. Photographs 76 to 93 show the liquid and the flow in various points along the open stormwater drain. Photographs 78, 79 and 80 show the flow at the point where it enters Mr Smith's Property. The fence line shown in the photographs is the boundary of the Livestock Exchange and Mr Smith's property. The photographs are taken on the Livestock Exchange site. Photographs 91, 92 and 93 show the open stormwater drain looking back towards the T intersection of the fence line where the soil and rock had been dumped. 94. Rainfall date measured at T. C. Morrison's property approximately 1.4km north-west of the Livestock Exchange recorded the following: Saturday, 2 June 2012 (11mm); Tuesday, 5 June 2012 (8mm); Saturday, 16 June 2012 (25mm); Friday, 22 June 2012 (5.5mm); Sunday, 1 July 2012 (1.5mm); Tuesday, 10 July 2012 (19mm); Thursday, 12 July 2012 (17.5mm). 95. Rainfall measured at the Forbes Airport located south-west of the Livestock Exchange recorded the following rainfall: Saturday, 2 June 2012 (0.8mm); Sunday, 3 June 2012 (10.6mm); Tuesday, 5 June (2.0mm); Wednesday, 6 June 201 (3.6mm); Saturday, 16 June 2012 (8.6mm); Sunday, 17 June 2012 (15.6mm); Monday, 18 June 2012 (0.2mm); Thursday, 21 June 2012 (0.2mm); Friday, 22 June 2012 (3.0mm); Saturday, 23 June 2012 (1.8mm); Tuesday, 26 June 2012 (0.2mm); Monday, 2 July 2012 (0.8mm); Tuesday, 3 July 2012 (0.2mm); Thursday, 5 July 2012 (0.2mm); Sunday, 8 July 2012 (0.2mm); Tuesday, 10 July 2012 (0.8mm); Wednesday, 11 July 12 (25.2mm); Friday, 13 July 2012 (10.4mm); Sunday, 15 July 2012 (0.2mm); Tuesday, 19 July 2012 (0.2mm). After the pollution incident 96. After the Pollution Incident the Council installed earthen wall bunding around ED1, ED 2 and the Effluent Dam to reduce the likelihood of overflow entering the open stormwater drain. 97. The construction of the bunding was undertaken between 14 and 25 March 2013 and 25 April and 6 May 2013 at a cost of $10,201.51 (excluding GST). 98. A Council's meeting on 19 July 2012, a resolution (minute number 737/2012) was made to convene a meeting with two Councillors to find a suitable consultancy to discuss the irrigation at the Livestock Exchange. A progress meeting was to be held 30 July 2013 to discuss information received. The Report prepared by Council is titled: Director of Engineering & Technical Services Supplementary Report to Council - Part II Clause 1 - Forbes Central Livestock Exchange - Effluent Irrigation dated. Annexure D is a copy of this document. 99. By 6 February 2013 Council installed a pump at the Effluent Dam, but it was not operational as the pipe work had not been installed at that time. 100. In August 2013 Council prepared a Pollution Incident Response Management Plan or PIRMP for the Livestock Exchange. Annexure E is copy of Council's PIRMP. 4Annexures to the SOAF were before the Court. A bundle of documents was also tendered (exhibit B) which included a joint statement of Mr Julli and Mr Robertson addressing their agreement as to the potential environmental harm caused by the offence. They agreed no actual environmental harm was caused. 5The Defendant read an affidavit dated 5 December 2013 of its General Manager Mr Steffen. He candidly attested to the extensive failures of the Council which lead to the offences in par 6. He identifies the substantial steps taken by the Defendant since the offence to prevent a recurrence with the preparation of a Pollution Incident Response Management Plan (PIRMP) and a Wastewater System Action Plan in 2013. He details the irrigation system that was implemented from soon after the offences in 2012. The Council has passed a resolution expressing its contrition and remorse for the incident and this is attached to his affidavit. Purposes of Sentencing 6Section 3A of the Crimes (Sentencing Procedure) Act 1999 (CSP Act) states the purposes for which the Court may impose a sentence on a defendant are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. 7The objective and subjective circumstances of the offence must be weighed up in the context of the legislative framework under the PEO Act. 8The Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a "value judgment as to what is the appropriate sentence given all the factors of the case": Muldrock v R [2011] HCA 39; (2011) 244 CLR 120 at [26] unanimously following Markarian v R [2005] HCA 25; (2005) 228 CLR 357 at [51] per McHugh J. The sentence must reflect all the relevant objective circumstances of the offence and subjective circumstances of the defendant: see Veen v R [1979] HCA 7; (1979) 143 CLR 458 at 490; Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472 - 473, 490 - 491. The sentence should not exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances": Veen v The Queen (No 2) at 472, 485 - 486, 490 - 491, 496; Hoare v R [1989] HCA 33; (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ). Statutory scheme - Protection of the Environment Operations Act 9The objects of the PEO Act include the protection and enhancement of the environment of New South Wales and prevention of degradation of the environment by the use of pollution prevention and cleaner production. Chapter 5 identifies a range of offences including s 120(1). That offence has an important role in achieving the objects of the PEO Act, as the Prosecutor submitted. The PEO Act in s 241(1) identifies particular factors to be considered where relevant in sentencing for offences under that Act. The Defendant largely accepted the Prosecutor's submissions set out below in relation to s 241(1) considerations. Section 241(1)(a) - The extent of the harm caused or likely to be caused to the environment by the commission of the offence 10"Harm to the environment" is defined in the Dictionary to the PEO Act 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. 11Pollution is defined in the Dictionary of the PEO Act to include water pollution. 12A joint expert report has been prepared by Mr Moreno Julli, for the Prosecutor, and Mr David Robertson, for the Defendant, tendered to the Court. Those experts agree that: (a)there was a real risk of harm to public health, as a result of the discharge of effluent containing septic waste with possible presence of human pathogens in a public area outside the licensed premises (albeit a low risk); (b)there was a real potential for blue green algal blooms in Mr Smith's farm dams as a result of the high nutrient concentrations of the effluent; (c)there was real potential for cattle on adjacent land to become infected because the effluent was found to contain the bacteria Mycobacterium paratuberculosis, which causes bovine paratuberculosis (Johne's Disease). Council did accept cattle with the bovine Johne's disease at the saleyards. 13The parties accepted the experts' conclusion that there was no evidence to indicate that the pollution incident had caused actual harm to the environment. The Prosecutor submitted that there was potential for harm, as identified in the experts' joint report. 14As was held by Preston J in Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 at 325 [145]: Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account. 15In the present case, risks identified by the experts are relevant when considering the factors contemplated by s 241(1)(b)-(d) of the PEO Act. The Prosecutor accepted that the risk or potentiality identified by the experts did not eventuate. Section 241(1)(b) - Practical measures that may have been taken to prevent, control, abate or mitigate that harm 16The Prosecutor submitted that around mid-June 2012 the Livestock Exchange effluent dams were nearing their total capacity and exceeded normal operational capacity. On 20 June 2012, the Defendant's staff noticed that the effluent dams were full and that there was an overflow from the effluent dam into the adjacent open stormwater drain. A decision was made by Council staff, Mr Graham and Mr Rath, to pump effluent from the effluent dam onto the effluent irrigation area so as to lower the level of the dam and prevent further discharge to the stormwater drain. The Defendant decided that despite not having a travelling irrigator for the effluent dam that the effluent irrigation area was still available for use. 17Effluent was pumped from the dam to the effluent irrigation area for a total of twelve days. The pump was operated during daylight hours and was refuelled every four or so hours. 18For the first two days, the effluent was pumped onto a paddock in the effluent irrigation area. The pipe was then moved and effluent was pumped into different locations within a vegetated corridor in the area for five days. The pipe was then moved to the road verge of Back Yamma Road, outside the effluent irrigation area, where it pumped effluent for five days. By 8 July 2012 the effluent had flowed onto the neighbouring property of Mr Smith, a sheep and cattle farm. Mr Smith saw water flowing from the effluent irrigation area, into an open stormwater drain (at the four way gate shown on Annexure 2 to the SOAF). It then flowed down that drain into an ephemeral creek line on his property, and on into his dams. By the morning of 9 July the flow had caused an overflow of his third dam and had travelled south, beyond Mr Smith's property. 19At a direct level, the risk of harm presented by the offence could have been avoided had the Defendant ceased pumping the effluent. Over twelve days, officers of the Defendant had numerous occasions to revisit their decision to pump effluent: (a)they refuelled the pump every four hours; (b)when the pump broke down and was repaired, a decision was made to recommence pumping; (c)the pipe was moved on a number of occasions to different locations, first the paddock, then vegetated corridor, and then the road verge. 20Moreover, the effects of these pumping operations were obvious. For example, dirt and/or shale material was deposited at the gates between paddocks on the Livestock Exchange because the ground was boggy, to enable stock to be moved. It should have been obvious to officers of the Defendant that the ground was not able to absorb the large volume of liquid being applied to it. 21More generally, as the occupier and holder of the environment protection licence (EPL), the Defendant was responsible to ensure that it complied with its licence and with the law including the PEO Act. This Court has frequently commented on the heightened responsibility that the holder of an EPL has to comply with the licence and thereby protect the environment. 22At this more general level, there are a number of actions that the Defendant could have taken to prevent the risk of harm including: (a)purchased and used an appropriate irrigation system, such as the system that was put in place in October 2012; (b)undertaken an organised inspection program to determine compliance with the EPL; (c)provided staff training to ensure that they understood the EPL requirements and wastewater management, as has since been done; (d)considered alternative options such as using a tanker to remove the effluent as the Defendant had done at its previous saleyards premises; (e)ceased pumping as soon as the dam level was reduced to within operating capacity, rather than continuing to pump to further reduce the level of the dam. 23However, the Court would be mindful of R v De Simoni [1981] HCA 31; (1981) 147 CLR 383 at 389 and must not take into account a factor which would constitute an element of a more serious offence, here the "Tier 1" offence under s 116 of the PEO Act of wilfully or negligently causing any substance to leak, spill or otherwise escape in a manner that harms or is likely to harm the environment: applied in Environment Protection Authority v Queanbeyan City Council (No 3) [2012] NSWLEC 220; (2012) 192 LGERA 415 at [171], [178]. 24In Queanbeyan Pepper J held that the operation of De Simoni precluded consideration of whether that Council acted wilfully, negligently or recklessly in committing an offence under s 120 (at [178] and [179]). 25These submissions are accepted by the Court. 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 by the offence 26There is an absolute prohibition on water pollution which is reflected in condition L.1 of the Defendant's EPL. 27The Defendant was under a positive obligation to take proper precautions to ensure that pollution did not occur. In Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357, Mahoney JA stated at 359 that: The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur. 28In any event, the potential for harm to the environment was clearly foreseeable. A large volume of effluent was pumped out of the dam onto land over the period of twelve days of the first offence. Given the topography of the land and the volume of effluent pumped onto it, it should have been obvious that that effluent would not all soak into the ground, but would instead flow to drainage channels, south onto neighbouring properties and into dams and creeks. Section 241(1)(d) - The extent to which the person who committed the offence had control over the causes that gave rise to the offence 29The Defendant was the holder of an EPL in relation to the premises and was the occupier in both a practical sense and by virtue of s 258(2) of the PEO Act. 30The Defendant also managed the operations at the premises and, therefore, had complete control over the premises. 31As the occupier the Defendant had control over the establishment and implementation of effluent management on the premises. 32Had there been better supervision of employees, training as to the requirements of the EPL, prioritisation of environmental regulatory requirements, and a risk-management approach taken to address the increasing level of the effluent dams to capacity levels and beyond, it seems likely that the incident would have been prevented. Objective seriousness of water pollution offence (offence 1) Maximum penalty 33The maximum penalty prescribed by the NSW Parliament for a breach of s 120(1) of the PEO Act is $1,000,000 for a corporation (s 123(a) PEO Act). Maximum penalties are reserved for the worst cases. While the Prosecutor did not say that this is such a case, nonetheless the gravity of any particular offence should be measured by reference to the maximum penalty for the offence. A maximum penalty is a public expression by Parliament (and, by extension, the general community) of the gravity of the offence: Kirby P in Camilleri's Stock Feeds Pty Limited v Environment Protection Authority (1993) 32 NSWLR 683 at 698. 34The Defendant submitted the offences are at the lower end of the mid-range of objective seriousness. I agree with the Prosecutor that this offence is firmly in the medium range of objective seriousness given its duration and the complete absence of appropriate decision-making capacity and knowledge in the Defendant which lead to the commission of the offence. This occurred through the failure to implement the requirements of a development consent and to comply with an EPL together with the events giving rise to the offence over twelve days. That included the discharge of effluent on a public road verge which was outside the approved effluent disposal area from 5 to 9 July 2012. The amount of effluent discharged was large at over 11,000kL. There was potential for environmental harm as identified by the Prosecutor's submissions, including the escape of pathogens harmful to cattle, as such in cattle were sold at the yards as a result of the incident. As discussed above there were practical measures which could have been taken by the Defendant to prevent, control or mitigate the potential for harm, the potential harm was clearly foreseeable and the Defendant had control over the causes that gave rise to the offence. Failure to notify offence (offence 2) 35The SOAF identifies the agreed facts relevant to this offence at [72]-[77]. At [75] it states that during the morning of 9 July 2012 Mr Rath saw the effluent was entering the open stormwater drain but did not cease pumping or notify anyone. The particulars in the summons for this offence identify the period of the offence as being early on 9 July 2012. 36Relevant sections of the PEO Act follow: 147 Meaning of material harm to the environment (1) For the purposes of this Part: (a) harm to the environment is material if: (i) it involves actual or potential harm to the health or safety of human beings or to ecosystems that is not trivial, or (ii) it results in actual or potential loss or property damage of an amount, or amounts in aggregate, exceeding $10,000 (or such other amount as is prescribed by the regulations), and (b) loss includes the reasonable costs and expenses that would be incurred in taking all reasonable and practicable measures to prevent, mitigate or make good harm to the environment. (2) For the purposes of this Part, it does not matter that harm to the environment is caused only in the premises where the pollution incident occurs. 148 Pollution incidents causing or threatening material harm to be notified (1) Kinds of incidents to be notified This Part applies where a pollution incident occurs in the course of an activity so that material harm to the environment is caused or threatened. (2) Duty of person carrying on activity to notify A person carrying on the activity must, immediately after the person becomes aware of the incident, notify each relevant authority of the incident and all relevant information about it. (3) Duty of employee engaged in carrying on activity to notify A person engaged as an employee in carrying on an activity must, immediately after the person becomes aware of the incident, notify the employer of the incident and all relevant information about it. If the employer cannot be contacted, the person is required to notify each relevant authority. (3A) Duty of employer to notify Without limiting subsection (2), an employer who is notified of an incident under subsection (3) or who otherwise becomes aware of a pollution incident which is related to an activity of the employer, must, immediately after being notified or otherwise becoming aware of the incident, notify each relevant authority of the incident and all relevant information about it. (4) Duty of occupier of premises to notify The occupier of the premises on which the incident occurs must, immediately after the occupier becomes aware of the incident, notify each relevant authority of the incident and all relevant information about it. (5) Duty on employer and occupier to ensure notification An employer or an occupier of premises must take all reasonable steps to ensure that, if a pollution incident occurs in carrying on the activity of the employer or occurs on the premises, as the case may be, the persons engaged by the employer or occupier will, immediately, notify the employer or occupier of the incident and all relevant information about it. (6) Extension of duty to agents and principals This section extends to a person engaged in carrying on an activity as an agent for another. In that case, a reference in this section to an employee extends to such an agent and a reference to an employer extends to the principal. (7) Odour not required to be reported This section does not extend to a pollution incident involving only the emission of an odour. (8) Meaning of "relevant authority" In this section: relevant authority means any of the following: (a) the appropriate regulatory authority, (b) if the EPA is not the appropriate regulatory authority-the EPA, (c) if the EPA is the appropriate regulatory authority-the local authority for the area in which the pollution incident occurs, (d) the Ministry of Health, (e) the WorkCover Authority, (f) Fire and Rescue NSW. 150 Relevant information to be given (1) The relevant information about a pollution incident required under section 148 consists of the following: (a) the time, date, nature, duration and location of the incident, (b) the location of the place where pollution is occurring or is likely to occur, (c) the nature, the estimated quantity or volume and the concentration of any pollutants involved, if known, (d) the circumstances in which the incident occurred (including the cause of the incident, if known), (e) the action taken or proposed to be taken to deal with the incident and any resulting pollution or threatened pollution, if known, (f) other information prescribed by the regulations. (2) The information required by this section is the information known to the person notifying the incident when the notification is required to be given. (3) If the information required to be included in a notice of a pollution incident by subsection (1) (c), (d) or (e) is not known to that person when the initial notification is made but becomes known afterwards, that information must be notified in accordance with section 148 immediately after it becomes known. 151 Incidents not required to be reported (1) A person is not required to notify a pollution incident under section 148 if the person is aware that the incident has already come to the notice of each person or authority required to be notified. (2) A person is not required to notify a pollution incident under section 148 if the incident is an ordinary result of action required to be taken to comply with an environment protection licence, an environment protection notice or other requirement of or made under this Act. 152 Offence A person who contravenes this Part is guilty of an offence. Maximum penalty: (a) in the case of a corporation-$2,000,000 and, in the case of a continuing offence, a further penalty of $240,000 for each day the offence continues, or (b) in the case of an individual-$500,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues. 37I am informed that this is the first prosecution following amendments to the notification regime in Pt 5.7 which came into force on 6 February 2012 as a result of the Protection of the Environment Legislation Amendment Act 2011. Immediate notification is now required of a pollution incident to several authorities, identified in s 148(8). The maximum penalty has been doubled to $2 million and there is provision for a daily penalty of $240,000. The elements of this offence include (broadly), firstly, that a pollution incident occurred, secondly, awareness that the pollution incident caused or might cause material harm to the environment as defined in s 147 (a subjective awareness as found in Environment Protection Authority v Bulga Coal Management Pty Ltd [2014] NSWLEC 5 at [81]-[95]), and thirdly, failure to immediately notify certain authorities with relevant information defined in s 150. The Defendant's plea of guilty means that all the essential elements of the offence have been accepted and need not be proved by the Prosecutor. Prosecutor's submissions 38The Defendant became aware of the incident on 9 July 2012. However, the Defendant did not immediately report the incident to the Environment Protection Authority (EPA) as was required by s 148(2) of the PEO Act. Rather, the Defendant's neighbour, Mr Smith, reported the discharge upon discovering the overflow of his dams and tracing that overflow back to the premises, at 9:06 am on 9 July 2012. 39At approximately 10:30 am an EPA officer informed Mr Graham of the Defendant about the effluent flowing from the Livestock Exchange onto neighbouring property, and directed the Defendant to cease pumping. Mr Graham then contacted Mr Rath and requested that pumping cease. The Defendant ceased pumping the effluent two hours later at about 12:30pm. At no time did the Defendant report the effluent discharge to the EPA or any other authority. 40The function of s 148 of the PEO Act is protective of the environment and the community. Therefore, general deterrence is an important factor in sentencing because those carrying out such activities must understand the need to take measures to prevent environmental harm and to have adequate systems in place to ensure compliance with reporting requirements: Environment Protection Authority v Caltex Australia Petroleum Pty Limited [2007] NSWLEC 647 at [25]. 41The Defendant could have taken practical measures to ensure its officers were aware of the reporting requirements; it has done so since the offences. It has established training for employees on compliance with the EPL, and a PIRMP is now in place. In this respect, the Defendant had control over the causes of offence 2. 42Although the Defendant did not notify the EPA of the incident immediately upon Mr Rath becoming aware of the incident, or at all, these omissions need to be understood in the context of the following circumstances: (a)The EPA was made aware of the pollution incident that same morning (9 July 2012) at 9:06am when the owner of the neighbouring property notified the EPA of the incident. Accordingly, the EPA was aware of the pollution incident within a very short time of the Defendant becoming aware of it. (b)By about 10:30am that same morning (9 July 2012), the Defendant knew that the EPA was aware of the pollution incident, because the EPA contacted the Defendant about the incident at that time and told the Defendant that the incident had been reported to the EPA. (c)The EPA had its officers on site by 12:30pm on that same day (9 July 2012), commencing inspections and sampling and the Defendant was aware of that circumstance at that time. 43In these circumstances the Defendant's failure to notify the pollution incident and all relevant information about it to the EPA immediately upon becoming aware of the incident cannot be suggested to have: (a)resulted in any actual or likely harm to the environment; or (b)materially prejudiced the capacity of the EPA to investigate the incident; or (c)materially prejudiced the capacity for appropriate clean-up actions to be directed and undertaken to address the discharge. 44The level of objective seriousness is at the lower end of the range. Defendant's submissions 45The circumstances of this offence suggest a low level of objective seriousness as the time between awareness of the pollution incident by the Defendant's employee Mr Rath sometime after 7 am on 9 July 2012, notification of the EPA's pollution line by Mr Smith at 9.06 am and the EPA telephoning Mr Graham at the Defendant at 10.30 am was a short period of a few hours at most. Once the EPA was notified regardless of by whom then s 151(1) meant the obligation to notify that body no longer applied. The Defendant accepted that the obligation to notify the other regulatory bodies identified in s 148(8) being the Ministry of Health, Workcover Authority and Fire and Rescue NSW continued. 46No greater potential for harm arose because of the delay in notification by the Defendant's officers as there was no prejudice to the clean-up operations and the EPA was able to attend and make decisions about what the appropriate response should be. It was also accepted that the totality principle of sentencing should not apply as the culpability for the failure to notify exists separately from the strict liability water pollution offence (offence 1). Maximum penalty doubled in 2012 47The effect of an increase in maximum penalty was discussed by the Court of Criminal Appeal in R v Slattery (1996) 90 A Crim R 519. In that case, the Court considered the effect of an increase of the maximum sentence for a particular type of offence. Hunt CJ at CL (with whom Studdert and Simpson JJ agreed), stated at 524 that: The action of the legislature in almost tripling the maximum sentence for a particular type of offence must be taken by the courts as reflecting community standards in relation to the seriousness of that offence, and the courts are required to give effect to the obvious intention of the legislature that the existing sentencing patterns are to move in a sharply upward manner. 48The Defendant agreed that the observation made by Hunt CJ at CL in Slattery at 524 above, correctly states a principle which applies when the legislature has sharply increased the prescribed maximum penalty for a particular offence. However, the Defendant submitted that this does not mean that the Court should impose a relatively high quantum of fine upon the Defendant for the failure to notify offence or that the Court should impose any higher a quantum of fine on the Defendant for that offence than the Court would have been inclined to impose had the maximum penalty remained at its previous quantum of $1 million. 49In Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 in which Giles JA (with whom Hulme and Adams JJ agreed) said, at [37]: The courts must, of course, recognise the maximum penalty provided for an offence, and with an increase in the maximum penalty there will come the imposition in some cases of higher penalties (see R v Slattery (1996) 90 A Crim R 519 at 524). It does not follow, as the respondent's submissions appeared to suggest, that every offence for which a fine of $X would have been imposed under s 16 of the Clean Waters Act should result in a fine of $2X under s 120 of the Act. Offences of low criminality remain offences of low criminality even if the maximum penalty is increased, and the increase can readily be recognised as operating as a deterrent to wilful disregard of statutory obligations. It remains necessary to address the facts of the particular case, with due regard to the current maximum penalty and the seriousness of the offence and to the need for deterrence thereby indicated together with all other relevant matters. 50The principle stated in Slattery (namely, that in the face of a steep increase in the maximum penalty for an offence, the courts must give effect to the obvious intention of the legislature that the existing sentencing patterns are to move in a sharply upward manner) can only be applied sensibly where there is a discernible, existing sentencing pattern. There are simply too few cases involving the imposition of penalties for offences against s 152 of the PEO Act to have established any discernible sentencing pattern. It follows that the principle in Slattery cannot sensibly apply. I am inclined to agree with the Defendant's submissions. I refer to the two cases relating to the same offence of which the Prosecutor is aware below. That number of cases is insufficient to give rise to any sentencing pattern. Objective seriousness of offence 2 51Under s 148 a duty to notify several government entities as in s 148(8) arose on 9 July 2012. None were notified by the Defendant. That failure gave rise to a breach of the PEO Act under s 152. The reporting of a pollution incident to the government entities specified enables them to make decisions about the appropriate response to a pollution incident, as identified in Bulga at [88]. 52The Prosecutor did not submit that the offence was more serious because, while the EPA was notified in a relatively short time by a neighbour so the obligation to the notify the EPA under s 151(1) was removed, none of the other specified entities were notified. The Defendant submitted that there was no material consequence in the circumstances of this case in the failure to notify immediately the Workcover Authority, the Ministry of Health and Fire and Rescue NSW and that submission can be accepted. 53These offences are not strict liability as a subjective awareness is part of one of the elements of the offence, suggesting culpability can be more serious than for a strict liability offence such as water pollution. The seriousness of such offences is underscored by the recent increase in the maximum penalty. That no greater environmental harm was caused on 9 July 2012 arose fortuitously from the notification to the EPA by Mr Smith, the downstream neighbour. 54In relation to the application of s 241(1) of the PEO Act factors, the potential for environmental harm was limited given the short period of the offence (subsection (a)), there were practical measures that could and should have been taken to ensure that the Defendant's officers were aware of their reporting responsibilities under the PEO Act (subsection (b)), the harm to the extent this occurred was foreseeable (subsection (c)) and the Defendant had control of the circumstances giving rise to the offence (subsection (d)). 55I consider the objective seriousness of offence 2 is at the lower end of the range given the relatively short period of the offence on the morning of 9 July 2012. It is not at the lowest end of the possible range of seriousness as there was a systemic failure of the Defendant to make sure its officers were aware of their environmental obligations, including the need to report a pollution incident. As identified in Cabonne a low level of culpability remains low where there is a substantial increase in penalty. Subjective factors for offences 1 and 2 56There are several mitigating factors which suggest that any penalties imposed for both offences should be reduced. Early guilty plea 57An early plea of guilty is a mitigating circumstance (s 21A(3)(k), s 22 of the CSP Act). Both proceedings were commenced by summons on 4 July 2013. The Council entered a plea of guilty to both charges, at the first mention, on 16 August 2013. Application of the full discount of 25 per cent for the utilitarian value of an early plea of guilty as stated in R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152] is warranted. The Defendant's co-operation with the Environment Protection Authority investigation 58The Court is also required to take into account the assistance provided by the Defendant to law enforcement authorities (s 21A(3)(m), s 23 of the CSP Act). The Defendant assisted by: (a)substantially agreeing on the facts in issue and working with the Prosecutor to file the SOAF; and (b)complying with statutory notices to provide information and records. 59The Defendant has at all times co-operated with the EPA in its investigation of the incident. Relevant officers of the Defendant spoke openly with the EPA investigators from the outset of the investigation on 9 July 2012. Mr Graham and Mr Rath attended interviews voluntarily. No prior convictions 60The Defendant has no prior convictions for any environmental offence in NSW: s 21A(3)(e) of the CSP Act. Unlikely to reoffend 61I consider the Defendant is unlikely to reoffend, which is a relevant matter under s 21A(3)(g) of the CSP Act. Contrition 62Mr Steffen's affidavit contains an expression of remorse on behalf of the Defendant, a relevant matter under s 21A(3)(i). Also important to consider are the extensive measures implemented by the Defendant as detailed in the SOAF at par 96-100 and Mr Steffen's affidavit at par 8-26, including the implementation of the correct irrigation techniques and training for officers in their environmental reporting obligations. Further sentencing considerations for offences 1 and 2 General deterrence 63The Prosecutor submitted that the need for general deterrence is one of the main purposes of punishment. The offences should be seen in the broader context of pollution control; in that context general deterrence is important. Any penalty ultimately imposed on the Defendant must incorporate an element of general deterrence because: (a)the objects of pollution control legislation require a substantial sentence to punish the Defendant, to deter others and to encourage full compliance with the relevant Act by the Defendant and others; (b)the object of the legislation is to prevent pollution and to do this, inter alia, by the deterrent effect of a substantial fine and by, in consequence, persuading the industries concerned to adopt preventative measures; (c)offenders will not be deterred from committing environmental offences by the imposition of nominal fines; (d)a penalty for a breach must be sufficient to compel attention to the environmental issues to ensure that the Defendant, and others, are encouraged to comply with the law and that the environment is not exposed to risk of harm. 64A clear message needs to be sent to other companies engaging in similar operations that positive steps must be taken to ensure water pollution does not occur. Specific deterrence 65The Prosecutor submitted that specific deterrence is a matter to which the Court should give weight. Specific deterrence is a purpose of sentencing under s 3A(b) of the CSP Act and has been considered relevant where a defendant continues in the same area of operation in which an incident has occurred. The Defendant accepted that some allowance for specific deterrence was warranted for the water pollution offence. I agree. Retribution and denunciation under the CSP Act 66Subsections 3A(a) and (e) of the CSP Act set out retribution and denunciation as part of the purposes of sentencing and as such the Court needs to take them into account. This applies equally to strict liability offences, however I note the Defendant's submission that such offences have no mental element. The Prosecutor submitted that environmental values rate highly in the community and the community should be assured that any departure from those values will be properly dealt with. Evenhandedness 67The principle of evenhandedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty (R v Visconti [1982] 2 NSWLR 104). This principle must always be applied subject to the particular circumstances of the case before the Court (Hoare v R). Section 120 water pollution cases 68The Prosecutor referred to the following cases. Environment Protection Authority v Ravensworth Pty Limited [2012] NSWLEC 222 concerned sediment laden water (approximately 1.64ML) being discharged into Bowman's Creek, a tributary of the Hunter River. The pollutant load on the day of the offence was total suspended particulates (TSS) at the discharge point 4,540 mg/pl, TSS in Bowman's Creek upstream was 23 mg/pl, TSS in Bowman's Creek downstream was 1,690 mg/pl. The Court found the actual harm was minimal ([30] and [43]), and the environmental harm was low ([33]). The Court found there were practical measures that could have been taken to prevent the harm ([34] -[35]), and that the harm was foreseeable ([37]). The defendant was found to have had a low level of culpability as the breach of the erosion and sediment control plan which led to the offence would have been adequate if it had been properly complied with by a contractor ([43]). This case was considered to be at the lower end of the low to moderate range of seriousness ([43]). The Court imposed a fine of $50,000 ([72]). The defendant was ordered to pay the prosecutor's costs of $26,500 and investigation costs of $2,000 ([73]). The Court also made a publication order. 69Environment Protection Authority v Coal and Allied Operations Pty Ltd [2013] NSWLEC 134 concerned sediment laden waters (6.8ML over five days) flowing from premises into a drainage channel which flows to Salt Pan Creek and Newport Farm Lagoon ([98]). The Court found there was no actual harm but there was short-term potential harm for two or three weeks following the incident ([103]). The environmental harm was assessed as low [103]. The Court found practical measures could have been taken to prevent the incident ([104]) and the harm was foreseeable ([105]). The defendant's remorse was considered as a subjective factor and the Court found that it showed remorse by implementing measures to improve sediment controls and having a proactive approach to the incident ([113]). The offence was found to be at the upper end of the spectrum of low objective seriousness ([108]). The Court imposed a fine of $45,000 ([131]). The defendant was ordered to pay the prosecutor's legal costs of $51,000 and a publication order was made. 70Environment Protection Authority v Austar Coal Mine Pty Ltd [2011] NSWLEC 252 concerned water containing two pollutants, detergent and effluent, from a bathhouse at a coal plant escaping into a creek and travelling 2km downstream because an aged septic system failed. Low actual environmental harm was caused and pollutants were likely to have adversely impacted aquatic biota. Mitigating factors were an early plea of guilty, expression of contrition and remorse, clean up, and the defendant agreed to pay the prosecutor's costs. A penalty of $75,000 was imposed. 71In Environment Protection Authority v Baiada Poultry Pty Limited [2008] NSWLEC 280; (2008) 163 LGERA 71 1 million litres of effluent from a poultry rendering plant escaped from a defective weld in an underground pipeline into a watercourse in a paddock for 1.1km. There was a small amount of environmental harm caused to the watercourse and no likely harm to the downstream creek or river. Mitigating factors were an early plea of guilty, cooperation with the EPA, expression of contrition and remorse, and the defendant agreed to pay the prosecutor's costs. A penalty of $120,000 was imposed. 72In Environment Protection Authority v Peak Gold Mines Pty Limited [2013] NSWLEC 158 water contaminated with tailings from the defendant's gold mining processing plant discharged from the tailings dam during rainfall events into a clean water drain and remained onsite. The tailings were contaminated with cyanide and heavy metals. There was no evidence of actual harm to the environment. There was a low level of likely harm to wildlife that might come into contact with the contaminated water. Mitigating factors were an early plea of guilty, expression of remorse. The discharge was cleaned up, the defendant cooperated with the prosecutor and the defendant was unlikely to re-offend. A penalty of $50,000 was imposed. 73Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114; (2010) 174 LGERA 314 concerned a defendant which undertook gold and antimony mining activities. Some 1,000 to 3,000 tonnes of toxic slime were released which spread 300m along a road, 200m over a grassed area and along a dry creek bed. No environmental harm apart from the presence of the toxic slimes was caused, and potential harm to the receiving waters was low (if it had reached the waters). A penalty of $50,000 was imposed. 74In Environment Protection Authority v Queanbeyan City Council (No 3) the defendant council operated a sewage treatment system, including treatment plant, serving the Queanbeyan Local Government area. The sewage pumping failed, resulting in discharge of sewage from an overflow outlet into the Queanbeyan River and on to the Molonglo River and Lake Burley Griffin. Despite the discharge of sewage, actual environmental harm was not significant and the offence did not involve a serious risk to public health. There was potential or likely risk to public health by the exposure of public areas to contamination. Objective gravity was held to be moderate, noting the high volume of sewage, measures that were available to the council to avoid harm and the fact the council did not notify the Department of Health or the EPA. A penalty of $80,000 was imposed. 75The objective circumstances of this matter are arguably more serious than all of these cases including Baiada. They are markedly more serious than in Queanbeyan. Failure to notify cases 76Only two judgments in relation to s 148(2) were identified in the Prosecutor's submissions in attachment B. These are Environment Protection Authority v Caltex Australia Petroleum Pty Limited [2007] NSWLEC 647 and Environment Protection Authority v Ramsey Food Processing Pty Ltd [2010] NSWLEC 23, both of which predate the 2013 amendments. That means they were considering the obligation to notify in its previous form of requiring notification "as soon as practicable". The change to immediate notification is a significant change in my view. In addition to the recent change in the maximum penalty, that is another reason why these cases are of less assistance. 77In Caltex pipework at a bulk fuel depot failed, causing an unknown quantity of hydrocarbons consistent with diesel fuel to leak from the pipework, such that they descended or were likely to descend into groundwater. Caltex did not notify the EPA. Caltex entered pleas of guilty to offences under s 120(1) and s 148(2) of the PEO Act. Caltex could have taken practical measures to prevent both offences. Both offences involved a reasonable foreseeability of the likely harm to the environment. Caltex had control over the causes of both offences: at [23]. Biscoe J at [24] held that the failure to report was not deliberate, but was the product of an unintentional and regretted oversight, and failure to have adequate reporting systems in place. Both offences were of low objective seriousness. The principle of totality applied in sentencing for the two offences. Mitigating factors were the entering of an early guilty plea and the good character of the defendant. A penalty of $27,000 for the two offences (s 120 and s 148) was imposed. 78In Ramsey Food Processing the defendant pleaded guilty to two offences of pollute waters and one offence of failing to notify a pollution incident. The circumstances of the case were that untreated effluent from the defendant's abattoir escaped for four days into a creek as a result of a split pipe and a valve being open. The defendant failed to notify the appropriate regulatory authority as soon as practicable after becoming aware of the incident. There was serious short term environmental harm, including dead fish and other aquatic life. The objective seriousness of the pollution offences was low to medium. The objective seriousness of the failure to notify offence was found to be medium. The failure to notify offence was committed without regard for public safety was held to be an aggravating factor. There was a prior conviction for a pollution offence. Mitigating factors were an early plea of guilty and expression of remorse. A penalty of $80,00 for the s 148 offence was imposed. 79The circumstances of Ramsey Food were far more serious than this matter as the circumstances giving rise to the failure to notify was found to be an aggravating factor, unlike here. The circumstances in Caltex are arguably more similar except that, as already identified above in par 76, the obligation to report is now markedly more onerous than when these cases were decided. Further, to the extent these could be considered to be comparable (given very limited comparability) there is no sentencing pattern to be discerned from this small number of decided cases by which to weigh the doubling of maximum penalty consideration before me in relation to offence 2. Costs 80The Defendant agreed to pay the Prosecutor's professional costs pursuant to s 215(1)(a) of the Criminal Procedure Act 1986. These have been agreed at $47,000. Conclusion on penalty 81Taking account of the objective and subjective factors relevant to this sentencing exercise I consider the penalty for the first offence should be $180,000 reduced to $130,00 in view of the subjective circumstances identified above. The penalty for offence 2 is $50,000 reduced to $35,000 in light of the subjective circumstances identified above. Orders 82The Court makes the following orders: In matter no 50495 of 2013 (1)The Defendant is convicted of the offence as charged. (2)The Defendant is fined the sum of $130,000. In matter no 50496 of 2013 (1)The Defendant is convicted of the offence as charged. (2)The Defendant is fined the sum of $35,000. (3)The Defendant is to pay within 28 days of this order the Prosecutor's costs as agreed in the amount of $47,000. ********** 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: 31 March 2014