Environment Protection Authority v Albiston

Solicitors: Environment Protection Authority (Prosecutor) CVC Law (Defendant) File Number(s): 2019/00260132

Mr Albiston Pleads Guilty to Operating a Waste Facility without Lawful Authority

1. Mr Shaun Albiston has pleaded guilty to an offence against s 144(1) of the Protection of the Environment Operations Act 1997 ("POEOA"). His liability arises by operation of s 169(1) of the POEOA, insofar as he was a person concerned in the management of 3R-Systems Pty Ltd ("3R"), and that company caused a place to be used as a waste facility without lawful authority: The Prosecutor claims: 1. An order that the Defendant, Shaun Albiston (date of birth 13 June 1970) of Unit 48 4-8 Wallumatta Road, Caringbah, in the State of New South Wales, appear before a Judge of the Court to answer the charge that, between about 29 June 2016 and about 28 September 2016 inclusive, at or near Port Kembla in the State of New South Wales, he committed an offence against section 144(1) of the Protection of the Environment Operations Act 1997 (POEO Act), by virtue of section 169(1) of that Act, in that he was a person concerned in the management of 3R-Systems Pty Ltd (ACN 602 389 971), and 3R-Systems Pty Ltd being the occupier of a place, caused the place to be used as a waste facility without lawful authority. Particulars (a) Place At or near Lot 2 Foreshore Road, Port Kembla being Lot 2, DP 1079726 (Place). (b) Waste Material including lead acid battery polyethylene, empty paint containers and other plastic (Waste). (c) Manner of breach The Defendant caused the Place to be used for the storage of the Waste. (d) Date on which evidence of the alleged offence first came to the attention of a relevant authorised officer Evidence of the alleged offence first came to the attention of authorised officer Greg Newman on 23 August 2016.
2. At the time of the offence, s 144(1) of the POEOA provided as follows: 144 Use of place as waste facility without lawful authority (1) A person who is the owner or occupier of any place and who uses the place, or causes or permits the place to be used, as a waste facility without lawful authority is guilty of an offence. Maximum penalty: … (b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
3. Section 169(1) and (1A) of the POEOA relevantly state: 169 Liability of directors etc for offences by corporation - offences attracting special executive liability (1) If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that: (a) (Repealed) (b) the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (c) the person, if in such a position, used all due diligence to prevent the contravention by the corporation. … (1A) For the purposes of this section, each of the following provisions attract special executive liability: … (p) section 144 (1)…
4. 3R has not been charged with, or convicted of, an offence in relation to the storage of waste at the premises. Section 169(2) of the POEOA allows a person to be convicted under s 144(1) whether or not the corporation has been convicted under that provision: … (2) A person may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision.
5. Section 48 of the POEOA provides that: 48 Licensing requirement - scheduled activities (premises-based) (1) Application of section This section applies to scheduled activities where Schedule 1 indicates that a licence is required for premises at which the activity is carried on.
6. Clause 42 of Sch 1 of the POEOA is in the following relevant terms: 42 Waste storage (1) This clause applies to waste storage, meaning the receiving from off site and storing (including storage for transfer) of waste. … (3) The activity to which this clause applies is declared to be a scheduled activity if: … (c) more than the following amounts of waste (other than waste referred to in paragraph (a) or (b)) are stored on the premises at any time: (i) in the case of premises in the regulated area - more than 1,000 tonnes or 1,000 cubic metres, (ii) in the case of premises outside the regulated area - more than 2,500 tonnes or 2,500 cubic metres, or…
7. The offence was committed at Lot 2 Foreshore Road, Port Kembla (Lot 2 DP 1079726) ("premises"). This was within the Wollongong City local government area which was a "regulated area" under the definition of that term provided in Sch 1 of the POEOA.
8. The term "waste facility" is defined by the POEOA as: waste facility means any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations).
9. And the term "waste" is defined to mean: waste includes: (a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or (b) any discarded, rejected, unwanted, surplus or abandoned substance, or (c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, processing, recovery or purification by a separate operation from that which produced the substance, or (d) any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations, or (e) any substance prescribed by the regulations to be waste. A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered.

3R is a Waste Recycling Company

1. Much of the factual background giving rise to the commission of the offence was not in dispute and was contained in a comprehensive statement of agreed facts. 3R was a waste recycling company. From 17 October 2014 to 8 June 2016, Mr Albiston was the sole director of 3R. He ceased being a director of the company on 8 June 2016. On that date, Mr Keith Albiston, Mr Albiston's father, was appointed as director and secretary of 3R.
2. On 28 September 2016 Mr Albiston placed 3R into voluntary external administration. On 2 November 2016 3R was placed into liquidation and the company was voluntarily wound-up later that month.
3. Between 29 June to 28 September 2016, 3R stored waste at the premises comprising an estimated volume of between 1,548 m3 (by 29 June 2016) and 8,000 m3 to 10,000 m3 (by 28 September 2016). The estimated weight of the waste present on the premises by 28 September 2016 was between approximately 1,500 tonnes to 2,312 tonnes.
4. An environment protection licence ("EPL") was required to store the waste at the premises because it exceeded the 1000 m3 threshold in cl 42(3)(c)(i) of Sch 1 of the POEOA. At no point in time did the Environment Protection Authority ("EPA") issue an EPL for the premises.
5. Although Mr Albiston removed himself as a director of 3R on 8 June 2016, he nevertheless continued to be involved in the management of the company until he placed it into voluntary administration on 28 September 2016. For example, he continued managing the staff of 3R, he represented himself to third parties as the person managing 3R, he signed off on correspondence as 3R's managing director, and he executed paperwork to place 3R into voluntary administration.

HydroMet's Business

1. HydroMet Corporation Pty Ltd ("HydroMet") holds EPL 5874 issued by the EPA in respect of premises at 201 Five Islands Road, Unanderra ("HydroMet's premises").
2. Part of HydroMet's core business is "battery recycling". As part of this process the battery casings, comprising of polyethylene, are separated from the "lead acid" part of the battery. According to HydroMet's material safety data sheet ("MSDS"), the polyethylene casings are "lead acid battery polyethylene". The MSDS describes the physical appearance as "grey solid (in ribbon form)" ("waste"). The main contaminant of the waste was lead, which HydroMet said was in concentrations of up to 2%.
3. In the MSDS the waste was stated to be classified as "Xn, Harmful, Hazardous", and a "cumulative poison". Section 11 of the MSDS warned that "lead exposure has been associated with increased risk of lung, stomach, and bladder cancer in diverse human populations".
4. HydroMet's EPL permitted the scheduled activities of "Resource Recovery" and "Waste Storage" at HydroMet's premises. Its EPL included the following conditions: 1. condition L2.1 provided that "the quantity of hazardous, restricted solid and liquid waste stored on the premises must not exceed 2500 tonnes at any one time"; 2. condition L2.2 provided that "the quantity of hazardous, restricted solid and liquid waste generated at the premises must not exceed 50000 tonnes per year"; and 3. condition L2.3 provided that "the quantity of lead acid batteries processed at the premises must not exceed 36000 tonnes per year".
5. On 11 March 2015 HydroMet requested a quote from Murrell's Freight Services Pty Ltd ("Murrell's") to store "a product called polypropylene which is produced from our battery breaking operation. It is washed of lead residue and stored in bulk bags with each bag weighing approx. 550kg".
6. From late March 2015 to 1 March 2016, HydroMet paid to store up to 3,010 bags each weighing approximately 500-550 kg of waste at Murrell's warehouse at 231-235 Berkeley Road, Unanderra ("Murrell's premises").
7. On 16 February 2016 HydroMet informed Murrell's that from 1 March 2016, 3R would "take ownership of the PE waste currently stored at your premises". HydroMet informed Murrell's that the change in ownership necessitated a change in billing arrangements and that "Shaun Albiston, Managing Director of 3R Systems will contact you directly to discuss the new arrangements".
8. In March, April, May and June 2016, Murrell's invoiced HydroMet for "PE bulk bags" weekly storage. The cost was at the rate of $1.428 per bag per week and varied depending on how many bags were stored at the Murrell's premises at any one time. For example, in the week of 4 March 2016, Murrell's charged HydroMet $4,169 for storing 2,920 bags at Murrell's premises and in the week of 1 April 2016, Murrell's charged HydroMet $4,210 for storing 2,950 bags at Murrell's premises.
9. Between 4 April and 27 June 2016, HydroMet paid 3R $168,824 for the storage and disposal of the waste.
10. In June 2016 HydroMet passed on the storage costs for storing the waste at the Murrell's premises to 3R. This is consistent with the proposal 3R put to HydroMet on 1 February 2016 and the agreement between 3R and HydroMet (see immediately below).

3R Enters into a Contract with HydroMet

1. On 1 February 2016 3R sent a proposal to HydroMet to "assist HydroMet in managing waste products produced on site." The price structure included the following clause: 2. PE lead based plastic: approximately 1400t of lead based PE is currently stored at Murrells and on site at Hydromet. The approximate 1400 T may alter based upon production. Hydromet produce approximately additional 150 T of PE lead based plastic per month. 3Rsystem and Hydromet agree a set charge rate of $80 per T to be paid by Hydromet to 3Rsystems for removal and dispose of the lead based PE product.
2. On 18 February 2016 3R entered into a contractual arrangement with HydroMet ("3R-Hydromet Contract"). Under the 3R-Hydromet Contract 3R would charge HydroMet a fee of $80 per tonne to "take ownership" of the waste from 1 March 2016 and transport it from Murrell's premises.
3. The 3R-Hydromet Contract included the following relevant terms: 1. 3R Systems ("3R") unconditionally agree to take ownership of the approx. 1,400 tonne PE stockpile currently stored at Murrells with effect from 1 March 2016. 2. Consequently, 3R assume all expenses and liabilities associated with storage of the PE waste currently at Murrells." … 4. Upon collection of the PE waste from Murrells, HydroMet agree to pay a gate fee of $80/t inclusive of transport for the PE waste stockpile at Murrells and ongoing arising estimated at up to 150 tonnes per month… 5. Plastic battery casing: all plastic casings are to be packed secured onto pallets. 3Rsystems [sic] will collect any items prepacked on pallets every week…
4. Appendix 3 to the 3R-Hydromet Contract identified HydroMet's contacts at 3R as Mr Albiston (General Manager), Mr Allan Jones (Operations and Logistics Manager), Mr Peter Holz (Accounts Manager), and Ms Kim Towell (Accounts Financial Controller).
5. The "PE waste" that 3R was taking "ownership" of from HydroMet was polyethylene material generated from the recycling of used lead acid batteries. The main contaminant was lead, in concentrations of up to 2%.
6. In March 2017 HydroMet informed the EPA that it was forced to write off approximately $200,000 in outstanding debts owed to it by 3R after the company was placed into liquidation.

3R Enters into a Lease for the Premises

1. Substantia Nominees Pty Ltd ("Substantia") owned the premises. In 2016, Substantia engaged a real estate agent, WHK Commercial, to act as its leasing agent for the premises.
2. On 13 April 2016, through WHK Commercial, 3R executed a lease for a hardstand area of approximately 5,000 m2 of the premises.
3. The lease permitted "storage" and was for "one month periodically with one-month renewal option". Mr Albiston signed the lease on behalf of 3R and was also guarantor of the lease.
4. At all relevant times: 1. the perimeter of the premises was fenced by a chain link fence approximately 1.8 m high; 2. access to the premises was secured by a locked gate; and 3. 3R, WHK Commercial, and Substantia, held keys to the gate.
5. 3R's occupation of, and access to, the premises ceased on 30 September 2016 when the voluntary administrator, DV Recovery Management, served a "Notice of Administrator's Intention Not to Exercise Property Rights" on Substantia.
6. At the time of its liquidation 3R owed WHK Commercial $17,600.

3R's Dealings with Freight and Transport Services

1. During May 2016 Mr Albiston exchanged numerous emails with Murrell's regarding transportation of the waste from Murrell's premises. Murrell's requested that 3R remove the waste from Murrell's premises as soon as possible. Murrell's has since informed the EPA that it "did not wish to deal with 3R Systems for any scope of work that related to our dealings with Hydromet and their PE product".
2. At the time of its liquidation 3R owed Murrell's $3,248.
3. R & A Ross Transport Pty Ltd ("Ross Transport") is a haulage company based in Port Kembla with a fleet of trucks available for hire.
4. At various times between February 2015 to August 2016, 3R hired Ross Transport to transport "bulk recyclable material". Ross Transport's main contacts at 3R were Mr Allan Jones, Ms Kim Towell and Mr Fahad Alizai.
5. At the time of its liquidation 3R owed Ross Transport $35,524.

3R Stores Waste on the Premises

1. Shortly after the lease for the premises was executed, 3R began to accept waste at the premises.
2. A 3R "delivery/pick up docket" dated 21 April 2016, provided the following details: Customer: HydroMet Driver name: Dick Pick up goods Description of goods: "load PE bags transport to Foreshore Road Pt Kembla 1 load of PE bags" Quantity/weight: 10 [bags] / 4970 [kilograms]
3. Other 3R delivery dockets with the same driver and customer details provided similar but varying descriptions of goods on dates in April, May, June, July, August and September 2016.
4. Throughout April, May, June, July and August 2016, 3R issued numerous invoices to HydroMet for services including: "PE Disposal"; "PE to store"; "PE removed from Murrells Site"; "PE removal from Hydromet"; "PE Removal"; and other descriptions relating to the waste. The invoices were for varying tonnages but consistent with cl 4 of 3R-HydroMet Contract charged $80 per tonne.
5. Between 29 June and 4 August 2016, 3R engaged Ross Transport to take at least 280 tonnes of the waste from Murrell's premises to the premises.

The EPA's Investigation

1. On 23 August 2016 EPA authorised officer Mr Greg Newman was attending an adjoining licensed premise and noticed numerous large white bags on the premises. He estimated that there were at least 2,500 bags on the premises. Officer Newman described the content of the bags as appearing to be "grey foam", which is a description generally consistent with that in the HydroMet MSDS.
2. By 24 August 2016 Officer Newman had identified 3R as the lessee of the premises and the presumed owner of the bags at the premises.
3. Between 24 August 2016 and 21 September 2016, Officer Newman exchanged several emails with Mr Albiston regarding the waste stored at the premises. In an email sent on 13 September 2016, Officer Newman informed Mr Albiston that: Based on our discussion and the quantities of material stored on site, you may be legally required to hold an EPA licence to store the material at the Foreshore Road site. The waste storage clause (below) specifies that if more than 1,000 tonnes or 1,000 cubic metres of material is stored on site at any one time, a licence is required. … Can you please advise of the current quantities of waste material stored on site.
4. Mr Albiston replied on 16 September 2016, stating that he was "hoping to have the stock take finalised by Wednesday next week." On 21 September 2016 Mr Albiston advised by email to Officer Newman that "my team have not completed the stock take as yet again due to staff shortages."
5. That same day, Officer Newman served a notice for information and records on 3R and Mr Albiston by email. Although 3R did not formally respond to the notice, a letter addressed to Officer Newman on 3R letterhead dated 22 September 2016 provided a list of "the product currently positioned at Port Kembla foreshore" "as requested". The letter noted that "previous to us collecting the product it was going to land fill." The letter provided the following estimated quantities of each "product" being "stored" at the premises: Polyurethane off cuts currently holding 2T. Collected from Campthane Soft LDPE. Currently holding 3T in various forms. Collected from PMP printing/Flint, Veolia, Hyrdomet [sic] and various other customers as listed above. Polyurethane in the form of bulka bags. Currently holding 5T Collected from CIC, Hyrock, Shinagowa PMP printing/Flint, Vesuvius and various other customers as listed above. HDPE. Australian Kayaks, Cammthane, Auto plus PP. of cuts sheets currently holding 4T. Australian Kayaks, Cammthane ABS. off cuts sheets currently holding 3T. Australian Kayaks; Cammthane PE. Shredded PE of cuts currently holding 1700T. Removed from Murrells and positioned at Port Kembla the product has been accumulated from Murrells/Hydromet. All products are to be reused and processed as virgin material.
6. On 28 September 2016 Mr Albiston provided similar quantity estimates by email to Mr Daniel O'Brien at DV Recovery.
7. Based on 3R's estimate, the total "product" at the premises on 22 and 28 September 2016 was approximately 1,717 tonnes.
8. On 7 October 2016 Officer Newman and EPA authorised officer Mr Greg Frost attended one of Mr Albiston's business premises in Unanderra and had the following conversation with him: Mr Newman said: We have just been around the corner at Prince of Wales Avenue and seen waste stored there. Can you talk us through how waste came to be at that site as well as the site on Foreshore Road, Port Kembla? Mr Albiston said: The waste at Foreshore Road is plastic supplied by Hydromet. I was engaged by Hydromet to be the middle man and take the plastic to various places for processing. One company in Queensland wanted to extract the lead from the plastic. Mr Frost said: What is the lead content? Mr Albiston said: Less than 1 percent. Mr Newman said: What is your plan for removing the waste? Mr Albiston said: I don't have a plan for the removal of the waste. I have handed everything over to the administrators. As far as I am aware I do not have access to the site.
9. On 11 October 2016 Officer Frost and EPA authorised officer Mr Marc Cooper inspected the premises. They observed a large quantity of bulker bags stored on pallets containing what appeared to be plastic waste. Officer Cooper estimated that the bulker bags occupied an area of approximately 50 m by 100 m.
10. On 20 March 2017 Officer Frost and EPA authorised officer Mr Matthew Corradin attended the premises. Officer Corradin estimated that at least 1,500 "bulker bags" were being stored on the western half of the premises. Officer Frost collected four samples from the "bulker bags".
11. On 16 June 2017 Officers Frost and Corradin inspected the premises in the company of the landowners, Mr Louis Misfud and Mr Paul Magagnino. Officer Corradin noticed that up to 25% of the bags had been moved to the eastern portion of the premises since his inspection in March 2017. The bags were moved at Mr Magagnino's request to make the premises available for lease.
12. On 9 August 2017 Officers Frost and Corradin inspected the premises with Mr Misfud. Officer Corradin noticed that since the June 2017 inspection the balance of the bags had been moved to the eastern portion of the premises. He was informed by Mr Misfud that this was to allow the premises to be leased. Officer Frost collected two samples of the waste.
13. On 27 September 2017 Officer Frost attended the premises and collected two further samples of the waste.
14. The samples were submitted for laboratory analysis. The analysis indicated that the samples contained varying levels of lead. Two of the samples contained lead concentrations of 20% and 10% lead.

Waste Removal

1. In August and September 2018, Substantia arranged for the waste to be removed from the premises and disposed of at the SUEZ Kemps Creek Resource Recovery Park. Based on the weighbridge records approximately 2,312 tonnes of waste was disposed of between 31 August and 19 September 2018.
2. It cost Substantia approximately $755,867 to arrange for the coordination, removal, and lawful disposal of the waste.
3. The waste was completely removed from the premises by late 2018.

The Purposes of Sentencing

1. The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 ("CSPA"): 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender 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.

Statutory Matters Required to be Taken into Account in Sentencing

1. The POEOA sets out the matters which are to be taken into account in sentencing for offences committed under that Act. Section 241 of the POEOA provides that: 241 Matters 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, (f) the presence of asbestos in the environment. (2) The court may take into consideration other matters that it considers relevant.
2. Subsections 21A(2) and (3) of the CSPA set out aggravating and mitigating factors that the Court must take into account. Having regard to the facts of this case, these are as follows: 21A Aggravating, mitigating and other factors in sentencing (2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows: … (g) the injury, emotional harm, loss or damage caused by the offence was substantial, … (o) the offence was committed for financial gain, … (3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, (b) the offence was not part of a planned or organised criminal activity, … (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, … (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), … (k) a plea of guilty by the offender (as provided by section 22 or Division 1A), … (m) assistance by the offender to law enforcement authorities (as provided by section 23)…
3. A sentencing court may not take facts into account in a way that is adverse to the interests of the defendant unless those facts have been established beyond reasonable doubt. If there are circumstances that the court proposes to take into account in favour of the defendant, it is sufficient if those circumstances are established on the balance of probabilities (R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at 281).
4. The appropriate sentence is to be determined by an instinctive synthesis of all the relevant objective and subjective circumstances of the commission of the offence (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).
5. Importantly, the sentence to be imposed on Mr Albiston for the commission of the offence must be proportionate to both the objective seriousness or gravity of the offence and Mr Albiston's subjective circumstances (Environment Protection Authority v Rands [2019] NSWLEC 23 at [98]).

Objective Circumstances of the Offence

1. In determining the objective seriousness or gravity of the offence, the relevant objective circumstances include: the nature of the offence; the maximum penalty under the legislation establishing the offence; the reasons for committing the offence; the environmental harm caused by the commission of the offence; the foreseeability of the risk of environmental harm caused by the commission of the offence; the practical measures available to prevent environmental harm; Mr Albiston's control over the causes giving rise to the offence; and Mr Albiston's state of mind in committing the offence.

The Nature of the Offence

1. The nature and purpose of the statutory provision that has been contravened, and its place in the statutory scheme, is illustrative of the objective seriousness of an environmental offence (Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234 at [51]-[71]; Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [49]; Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [59]; and Rands at [100]).
2. The relevant objects of the POEOA identify the purpose of creating the offence as follows: 3 Objects of Act The objects of this Act are as follows: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, … (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, (iii) the reduction in the use of materials and the re-use, recovery or recycling of materials, (iv) the making of progressive environmental improvements, including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, (e) to rationalise, simplify and strengthen the regulatory framework for environment protection…
3. The EPA submitted that ss 48(1) and 144(1) and cl 42(3)(c)(i) of Sch 1 of the POEOA establish a highly regulated scheme with respect to the storage of waste. The scheme required licences to be obtained for waste facilities to store specified types of waste above certain thresholds and subject to specific controls.
4. The EPA contended, and Mr Albiston accepted, that his conduct undermined the legislative objectives of the POEOA, in particular those set out in s 3(a), (d)(i)-(v), and (e).
5. The primary objective of the POEOA is to protect, restore and enhance the quality of the environment of New South Wales by, amongst other things, reducing risks to human health and preventing the degradation of the environment through mechanisms that reduce the discharge of substances likely to cause harm to the environment (s 3 of the POEOA) (Environment Protection Authority v Geoff Robinson Pty Ltd, Environment Protection Authority v Robinson [2011] NSWLEC 14 at [67]).
6. Mr Albiston's actions in permitting waste to be deposited on the premises without first applying for, and obtaining, the necessary approval, namely, an EPL, undermine the legislative objectives not only of the protective regulatory scheme contained in the POEOA, but also the legislative objectives of the Act itself (Environment Protection Authority v Hanna [2010] NSWLEC 98 at [38]-[39]).
7. In Environment Protection Authority v Edward Gilder [2018] NSWLEC 119 Robson J considered the nature of the offence in relation to the storage of waste without an EPL. His Honour opined as follows (at [103]-[105]): 103 In Environment Protection Authority v Hanna [2010] NSWLEC 98, Craig J said, in relation to the nature of the offence in that case which was the unlawful transporting or depositing of waste, at [38]: The objective seriousness of the offence is illuminated by the nature of the statutory scheme. Relevant to the offences charged, 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. By reference to the definitions of both "pollution" and "harm" found in the POEOA, disposal of waste other than at a licensed facility is taken, for the purposes of the POEOA, to have caused environmental harm. 104 The EPA submits that this comment is equally apposite to the storage of waste without a licence, particularly in the circumstances of this case. Therefore, the EPA submits that, having regard to the fact that cl 42 of the Waste Regulation makes detailed provision for the dealing of asbestos, the offence undermines the legislative objectives of the POEOA, in particular ss 3(a), (d)(i), (d)(ii), and (d)(iia), as well as the objectives of s 144(1) of the POEOA. 105 I find that, as submitted by the EPA, and as I consider in relation to environmental harm and the regulatory scheme at [125] below, the offence does undermine the legislative objectives and integrity of the POEOA.
8. I respectfully endorse and apply his Honour's observations.
9. I find, for the reasons given above, that Mr Albiston's conduct undermined the legislative objectives and integrity of the POEOA.

Maximum Penalty

1. The maximum penalty provided for an offence indicates Parliament's view as to the seriousness of that offence (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and Rawson at [57]). Mr Albiston's offending must be examined in this light (Gilder at [106]).
2. The maximum penalty for an individual at the time of the commission of the offence was $250,000.

The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offence

1. As stated above, s 241(1)(a) of the POEOA requires the Court to take into account the extent of the harm caused, or likely to be caused, to the environment by the commission of the offence. The term "harm" is defined in the dictionary to the POEOA as: harm to the environment includes 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.
2. In Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299, Preston J stated that harm includes both actual harm and potential harm (at [145]-[149]). His Honour identified the following principles in establishing harm, namely, that: 1. harm is not limited to measurable harm such as actual harm to human health, and can include a broader notion of quality of life; 2. harm can include harm to the environment and its ecology resulting from that caused to a particular animal or plant; 3. harm can be direct or indirect, individual or cumulative; 4. the culpability of the defendant depends in part on the seriousness of the environmental harm; and 5. the fact that the environment that is harmed by the defendant's conduct was already disturbed or modified is not a mitigating factor.
3. The meaning of the words "likely to be caused to the environment" was considered by Lloyd J in Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66 (at [44]): 44 In considering the harm likely to be caused to the environment, it is to be noted that the word "likely" in this context has been held to mean "a real or not remote chance or possibility regardless of whether it is less or more than a fifty per cent chance" (Mathews v Goulburn Wool Processors, NSWSC, Smart J, 6 November 1986, unreported); "only a real chance or possibility, and not more probably than not" (State Pollution Control Commission v Blayney Abattoirs Pty Ltd (1991) 72 LGERA 221 at 224); and "does not mean 'probable'. It means 'a real possibility'" (New South Wales Sugar Milling Co-operative Ltd v State Pollution Control Commission (1991) 73 LGRA 86 at 100, affirmed by the Court of Criminal Appeal on other grounds, (1992) 75 LGRA 320).
4. Harm can result from conduct which undermines a regulatory scheme that seeks to prevent environmental damage. In Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29 Craig J said, albeit in a different factual context (at [23]): 23 There is no evidence that this offence caused any actual harm to the environment. However, that is not the end of the matter. There was certainly the risk of harm occasioned by an output from the quarry that more than doubled the limit imposed both by the Development Consent and by the condition of the EPL. That risk or potential arises from the possibility of increased levels of dust, noise and impact upon existing water management facilities. There is undoubtedly harm occasioned by the undermining of the regulatory scheme imposed by the POEO Act as well as the lost opportunity for prior environmental assessment before production from the quarry was increased to the level that, in fact, occurred (Minister for Planning v Coalpac Pty Ltd [2008] NSWLEC 271 at [37]).
5. The EPA agreed that there was no evidence that the offence gave rise to actual harm to the environment because the waste was contained within large bulker bags and there was nothing to indicate that any of the waste had escaped. It submitted, however, that there was a real potential for environmental harm, albeit low, if leachate from the waste had drained into Port Kembla.
6. In this regard the EPA relied upon an expert report of Dr Kate Langdon dated 9 January 2018 ("first report"), and a supplementary report by the same expert dated 24 January 2020 ("second report"). Dr Langdon is an environmental scientist in the Contaminants and Risk Team of the Environment Protection Science Branch of the NSW Office of Environment and Heritage.
7. An analysis of two samples of the waste collected by EPA officers on 27 September 2017 contained concentrations of 20% and 10% lead. The waste was classified in the MSDS as "Xn, Harmful, Hazardous", and a "cumulative poison". According to the MSDS, the waste should have also been stored "in a cool place" in "tightly closed" containers. 3R stored the waste in bulker bags outside where they were exposed to the elements.
8. Dr Langdon stated that experiments conducted on samples of the waste indicated that the concentration of lead in the deionised water following the toxicity characteristic leaching procedure was "approximately 40mg/L, which is about 9000-times higher than the recommended marine guideline value for lead of 4.4mp/L".
9. Dr Langdon concluded in her first report that there was nothing to suggest in January 2018 that the storage of the waste on the premises was causing or was likely to cause a pollution incident, or that it was causing any harm to the environment. In her second report, she opined that the potential for harm to the environment from the storage of the waste at the premises was low.
10. Nevertheless, Dr Langdon noted that if aquatic ecological receptors were directly exposed to leachate from the waste, the concentration of lead in the leachate meant that adverse effects would be highly likely. Adverse effects include any negative impacts on aquatic organisms which may have lethal or sub-lethal consequences.
11. However, Dr Langdon did not think direct exposure would occur "as any leachate from the bags would need to be transported from the site into Port Kembla before ecological receptors would be exposed". Moreover, she noted that if it rained, "any leachate generated from the material in the bags would be significantly diluted with non-impacted stormwater run-off from the site" and it would be further diluted "within the canal adjacent to the site and upon discharge into Port Kembla". The extent of dilution would reduce the concentration of lead to "a concentration where impacts are unlikely". The fact that the bulker bags were mostly intact "would further reduce the concentrations of lead leaving the site".
12. Mr Albiston accepted that the commission of the offence had the potential to cause environmental harm but submitted that the potential for environmental harm was low. I agree.
13. Having regard to the evidence I find that there was no actual environmental harm caused by the commission of the offence, but that there was potential for environmental harm, although the risk of this eventuating was low.
14. I also take into account the very real harm caused by the undermining of the legislative scheme regulating the storage of waste.

Mr Albiston's State of Mind at the Time of the Commission of the Offence

1. The offence under s 144(1) of the POEOA is one of strict liability and therefore intention is not an element of the offence. But the state of mind of Mr Albiston in the commission of the offence is nonetheless relevant to the question of penalty. A strict liability offence committed intentionally, recklessly or negligently "exacerbates the objective culpability of the defendant" (Mouawad v The Hills Shire Council [2013] NSWLEC 165; (2013) 199 LGERA 28 at [171]; Camilleri's Stock Feeds at 700; Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [123]; Robinson at [83]; Environment Protection Authority v Rands [2019] NSWLEC 23 and Environment Protection Authority v Whitehaven Coal Mining Limited [2019] NSWLEC 27 at [201]).
2. The EPA initially submitted that Mr Albiston committed the offence either recklessly or negligently. However, the allegation of criminal negligence was abandoned by the EPA during the course of the hearing on the basis that it could not be established to the requisite degree on the evidence.
3. In Plath v Vaccount Pty t/as Tableland Timbers [2011] NSWLEC 202 the Court considered the test for recklessness (at [98]): 98 The term recklessness describes the state of mind of an offender who, while performing or failing to perform an act, is aware of the risk that a particular consequence is likely, in the sense of probable or possible, to result from that act or omission (Pemble v R (1971) 124 CLR 107, La Fontaine v R (1976) 136 CLR 62 and R v Crabbe (1985) 156 CLR 464). Recently in Blackwell v R [2011] NSWCCA 93, the Court of Criminal Appeal described the mental element of "reckless" as (at [76]): 76 The effect of this line of authority is that where the mental element of an offence is recklessness, the Crown must establish foresight of the possibility of the relevant consequence.
4. An offender's conduct will be found to be reckless if he, she or they are put on notice, in the sense that he, she or they believe or suspects, that an act or omission may be unlawful but nevertheless proceeds to engage in it without making further enquiries (Director-General, Department of Environment and Climate Change v Hudson (No 2) [2015] NSWLEC 110 at [136], citing Chief Executive, Office of Environment and Heritage v Rummery [2012] NSWLEC 271; (2012) 192 LGERA 314 at [126] and Chief Executive of the Office of Environment and Heritage, Department of Premier and Cabinet v Turnbull [2014] NSWLEC 150 at [141]).
5. The Court described the difference between recklessness and negligence as follows in Environment Protection Authority v Ridley AgriProducts Pty Limited [2019] NSWLEC 119 (at [71]-[72]): 71 In Chief Executive, Office of Environment and Heritage v Brummell [2019] NSWLEC 114 ('Brummell') at [51], Preston J noted that: A critical difference between [recklessness and negligence] is that recklessness is measured on a subjective standard (the referent being the offender) while negligence is measured on an objective standard (the referent is a hypothetical reasonable person). 72 For an offender to be reckless in the commission of an offence, they need to have "knowledge or foresight of the likelihood of the consequence or circumstance occurring" in the sense of a "real and not remote" chance: Brummell at [52]. While pertaining to different factual circumstances to those in the present matter, in Chief Executive, Office of Environment and Heritage v Rummery [2012] NSWLEC 271; (2012) 192 LGERA 314 at [126], Pepper J considered recklessness in the context of clearing native vegetation as follows: An offender's conduct will be classified as reckless where he or she is put on notice, in the sense that he or she believes or suspects, that the clearing of native vegetation may be unlawful but nevertheless proceeds to undertake the clearing without making further enquiries (Director-General, Department of Environment, Climate Change and Water v Linklater [2011] NSWLEC 30 at [50] and Director-General, Department of the Environment and Climate Change v Olmwood (No 2) [2010] NSWLEC 100 at [50]).
6. Mr Albiston accepted that by pleading guilty he recognised that he had failed to exercise due diligence but argued that this did not equate to recklessness.
7. Mr Albiston submitted that he was not reckless in the commission of the offence because he believed that at all times his actions were lawful. In an affidavit affirmed on 22 June 2020 ("first affidavit"), Mr Albiston stated that: 9 In about March/April 2016, I contacted Harry Stefanou of [WHK Commercial]. I told Harry that I was looking for a site to store waste products, and the PE waste in particular. Harry and I spoke at length about the PE product, the makeup of the PE and that the PE came from HydroMet. 10 Harry took me to a number of sites that he thought would be appropriate for the storage of the PE. 11 In early April 2016, we met at the Foreshore Road property and walked around the property. We discussed the possibility of 3R Systems leasing some of the land to store the PE and other waste. 12 We inspected and discussed the large sealed area that 3R ended up leasing, and how it could be used to support the PE product for storage. 13 Harry asked me to provide him with the data sheets for the waste so that the owner could provide approval to commence with a monthly lease arrangement. I was told that the lease could not commence until the owner had seen the data sheet and agreed for the lease to commence. 14 Based upon my discussions with Harry, what I had seen on site, and my explanation of the product type and where it had come from, I believed that the property met the requirements to store the PE including having the relevant licences in place.
8. Mr Albiston contended that he was led to believe by the owner of the premises that the waste could lawfully be stored at those premises.
9. The EPA elected not to cross-examine Mr Albiston, and therefore, his evidence is unchallenged.
10. By contrast, the EPA submitted that the offence was committed recklessly because Mr Albiston: 1. was aware that there was a legislative regime controlling the storage of waste and did not enquire whether he needed to obtain an EPL to store the waste. This was evidenced by the fact that: 1. when he signed the contract between 3R and HydroMet on 18 February 2016, he agreed that 3R would collect the waste from HydroMet and recycle and/or reuse it "when possible" or otherwise dispose of it "according to governing body standards and regulations"; 2. the MSDS that HydroMet gave 3R about the waste and which Mr Albiston provided to WHK Commercial stated under "Section 13 - Disposal Considerations" that "there are many pieces of legislation covering waste disposal and they differ in each state and territory, so each user, must refer to laws operating in their area"; and 3. he arranged the lease of the premises from Substantia and was the guarantor on the lease. Therefore, he could be taken to be aware of its terms including cl 6.2 which required 3R to "obtain all the necessary approvals from any statutory, public or other competent authorities regarding the use of the premises"; 1. he stored the waste at the premises without obtaining development consent permitting the premises to be used as a waste or resource management facility; 2. he was the person responsible at 3R for all major decisions regarding the waste, including its purchase from HydroMet, its transport to the premises, its storage at the premises and the potential sale of the waste to third parties. Accordingly, but for his involvement, 3R would not have stored the waste at the premises; 3. at least by the time the 3R-Hyrdomet contract was signed on 18 February 2016, he was aware that 3R would be responsible for in excess of 1,000 tonnes of waste because he agreed "to take ownership of the approx. 1,400 tonnes PE stockpile currently stored at Murrells with effect from 1 March 2016" and "ongoing arising" waste in the 3R-HydroMet contract. The company also kept detailed records of the amount of waste being transported to the premises; 4. there was a personal advantage obtained by Mr Albiston by 3R operating outside the regulatory framework insofar as it saved the cost (and time) of applying for an EPL, avoided the risk of 3R being denied a licence, and avoided having to comply with the conditions of any EPL granted; and 5. even after Officer Newman informed Mr Albiston on 13 September 2016 that he may be legally required to hold an EPL to store the waste at the premises, Mr Albiston did not enquire about, or apply for, an EPL.
11. The EPA submitted that neither Substantia nor WHK Commercial told Mr Albiston that the waste could be lawfully stored on the premises because the data sheet for the PE waste was not provided to the landowner before the lease was signed. In addition, neither Substantia nor WHK Commercial were informed of the volume of waste that would be stored at the site. Accordingly, Mr Albiston had foresight of the possibility that 3R was storing the waste at the premises without lawful authority, and therefore, he had committed the offence recklessly.
12. The test for recklessness is a subjective one (Chief Executive, Office of Environment and Heritage v Brummell [2019] NSWLEC 114 at [51]). The evidence relied upon by the EPA does not establish beyond reasonable that prior to 13 September 2016 Mr Albiston was aware of the likely risk "in the sense of probable or possible" that the storage of the waste at the premises was unlawful (Plath at [98]). This is because his unchallenged affidavit evidence is that he "believed that the property met the requirements to store the PE including having the relevant licences in place".
13. It follows that the EPA has not established that the offence was committed recklessly for the period from 29 June to 13 September 2016.
14. However, after receipt of the email from Officer Newman on 13 September 2016, Mr Albiston was "put on notice", in the sense referred to in Hudson (No 2) (at [136]), that his conduct in storing the waste on the premises might be unlawful. He was warned that an EPL was required to store waste over 1000 tonnes (or 1000 m3) at the premises, yet there is no evidence that he made any enquiries to confirm that such a licence was in place. Therefore, I find that from 13 September to 28 September 2016, Mr Albiston's conduct in the commission of the offence was reckless.

Mr Albiston's Reasons for Committing the Offence

1. The criminality involved in the commission of an offence is measured not only by the seriousness of what actually occurred but also by reference to the reasons for its occurrence (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366; Bentley at [237], cited in Rands at [137]).
2. In his first affidavit, Mr Albiston stated that 3R agreed to take the waste from Murrell's and store it because "HydroMet threatened [3R] that if they did not move the PE within less than four weeks, then [3R] would lose the sale of the PP product". The PP product was polypropylene scrap also generated by HydroMet and was a more valuable waste product than the waste (or "PE waste"). Mr Albiston stated that "to ensure [3R] could financially function as an organisation, the PE produce was moved from Murrells site to [the Premises]…This decision made [sic] as we believed at the time that this was only a short-term arrangement and that the agreement between Loumbos and [3R] would allow [3R] to quickly remove and dispose of all the PE product to be stored on site".
3. The administrator appointed to 3R, Mr Danny Vrkic, stated in a letter to the EPA dated 5 June 2017, that upon his appointment he had made inquiries with customers of 3R about purchasing the materials, "however these inquiries were unsuccessful and no commercial offers were made. Customers were aware that the materials…were contaminated with lead and could not be recycled."
4. The EPA submitted that it was clear that Mr Albiston contracted for 3R to take ownership of the waste in the hope of making a profit by on-selling the waste and by avoiding the financial loss the company would sustain if it lost the sale of the PP product.
5. However, the evidence established that there was never any realistic chance that 3R could have found a buyer for the waste. There was no evidence before the Court to support the claim that 3R had struck a deal with Loumbos Pty Ltd ("Loumbos") to buy the waste, or that 3R had ever been in negotiations with Loumbos or any other potential buyers for the waste.
6. The EPA argued that by Mr Albiston's commission of the offence, 3R avoided incurring the costs of obtaining and complying with an EPL. Mr Albiston also obtained a financial advantage by avoiding the substantial cost of removing the waste from the premises and lawfully disposing of it.
7. In response, Mr Albiston noted that there was no evidence that he deliberately avoided the cost of obtaining and implementing the necessary licenses and approvals. He contended that the reason for the lack of documentary evidence of negotiations with potential buyers for the waste was that they were more "verbal and face to face meetings than written".
8. Although Mr Albiston accepted that he stored the waste on the premises with the intention of finding a recycler for it, he argued that the waste accumulated over a relatively short period of time and that there was financial pressure on 3R to accept the waste. Furthermore, there was no evidence that he personally enjoyed any monetary benefit or profit as a result of the offence.
9. I accept that part of Mr Albiston's reason for agreeing to take ownership of the waste was his genuine desire to recycle the material and to minimise waste. However, Mr Albiston was also motivated by financial gain insofar as he wanted to avoid the financial detriment that would be caused to 3R by the loss of the PP product supply from HydroMet. I therefore find that the offence was committed for financial gain.
10. That a decision was ultimately unprofitable is not relevant to the question of whether an offence was committed for financial gain (Environment Protection Authority v Hughes [2019] NSWLEC 108 at [98]).

Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offence

1. Section 241(c) of the POEOA requires the Court to have regard to 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.
2. The EPA submitted that Mr Albiston could reasonably have foreseen that the offence was likely to cause harm to the environment because he was aware that the waste was contaminated with at least 2% lead. In his first affidavit, Mr Albiston stated that he had sent samples of the waste to recycling businesses for testing and found that "the lead content was greater than 2-3% as stated in the product data sheets supplied by HydroMet". Mr Albiston in fact admitted that he thought that the concentration of lead in the waste was higher than this.
3. Mr Albiston accepted that the harm caused or likely to be caused to the environment in the event of the pollutant escaping from the bags was foreseeable. I agree. Given his experience in the waste industry and his knowledge in relation to the lead content of the waste, Mr Albiston should reasonably have been aware that a failure to ensure that the applicable waste storage limit was not breached had the potential to cause environmental harm.

Control Over the Causes of the Commission of the Offence

1. As the sole director and the person who was concerned with the management of 3R, Mr Albiston had total control over the causes of the offence.

Practical Measures Which Could Have Been Taken to Prevent or Mitigate the Environmental Harm

1. Section 241(1)(b) of the POEO Act requires the Court to take into consideration any practical measures which may have been taken to prevent, control, abate, or mitigate the environmental harm. The EPA submitted that the following practical measures could have been taken by Mr Albiston to prevent, control, abate or mitigate the harm that was caused by the commission of the offence: 1. 3R could have arranged for the waste to be tested before contracting to buy it from HydroMet; 2. 3R could have refused to store the waste; 3. 3R could have stored the waste at a licensed facility; 4. 3R could have maintained the volume of waste below the 1000 m3 threshold; and 5. 3R could have made enquiries with the EPA to determine what it was required to do in order to lawfully store the waste at the premises and applied for an EPL once the waste exceeded 1000 tonnes or 1000 m3.
2. Mr Albiston also failed to mitigate the potential harm caused by the offence by abandoning the waste at the premises after he put 3R into voluntary administration on 28 September 2016, and by making no subsequent attempts to remove and lawfully dispose of the waste.
3. Mr Albiston accepted that he could have undertaken practical measures to avoid the harm caused or likely to be caused to the environment. He was right to do so.

Conclusion on the Objective Seriousness of the Offence

1. Mr Albiston contended that the objective seriousness of the offence was low.
2. By contrast, the EPA submitted that the offence was in the moderate, or at the least at the upper end of the lower range of seriousness for offences against s 144(1) of the POEOA. This was because it was committed recklessly and also because: 1. the volume of waste stored at the premises, being 8,000-10,000 m3, was well in excess of the volume permitted to be stored without an EPL; 2. the offence was committed for financial gain; 3. there was a real potential for environmental harm, albeit the risk of that harm was low; 4. there were simple practical measures that Mr Albiston could have taken to avoid the potential harm to the environment; 5. the likely harm to the environment was foreseeable; and 6. Mr Albiston had complete control over the causes of the offence.
3. With the exception of its submission as to Mr Albiston's state of mind during the entirety of the commission of the offence, I agree with the EPA. I find that the offence was in the middle of the lower range of seriousness for breaches of s 144(1) of the POEOA.

Subjective Circumstances of Mr Albiston

1. Within the limits set by the objective seriousness of the offence, the Court must take into consideration the subjective circumstances of Mr Albiston when determining the appropriate penalty (Environment Protection Authority v GrainCorp Operations Limited [2019] NSWLEC 143 at [116] and [190])
2. Section 21A of the CSPA (quoted above) sets out the aggravating and mitigating factors to be taken into account in this exercise. The aggravating and mitigating factors relied upon by the parties are examined below.

Substantial Injury, Emotional Harm, Loss or Damage was Caused

1. The EPA submitted that s 21A(2)(g) of the CSPA applied as an aggravating factor: (g) the injury, emotional harm, loss or damage caused by the offence was substantial…
2. In was not in dispute that 3R left the waste at the premises after Mr Albiston put 3R into voluntary administration on 28 September 2016, and that it cost Substantia, the owner of the premises, $755,867 to remove and lawfully dispose of the waste. Mr Albiston has not compensated Substantia for this expense. At the time of 3R's liquidation, it also owed Substantia $17,600 in unpaid rent. Accordingly, the EPA submitted that, as a direct result of his offending, Mr Albiston caused Substantia substantial financial losses.
3. The EPA argued that various other third parties also incurred financial losses as a result of Mr Albiston's conduct. For example, at the time of 3R's liquidation it owed Murrell's $3,248 for unpaid storage costs and Ross Transport $35,524 in unpaid freight costs for transporting the waste from Murrell's premises to the premises.
4. The fact that 3R could not pay its debts is not relevant to the determination of an appropriate penalty. Thus the losses of Murrell's and Ross Transport and the rental arrears owed to Substantia cannot properly be said to have been caused by the commission of the offence.
5. However, I find that the commission of the offence did cause substantial losses to Substantia insofar as it incurred costs to remove and lawfully dispose of the waste. I have taken this into account as an aggravating factor.

No Prior Convictions

1. Mr Albiston does not have any prior convictions for environmental offences.

Early Guilty Plea

1. Section 21A(3)(k) of the CSPA permits the Court to have regard, as a mitigating factor, to the entry of a plea of guilty in accordance with s 22 of that Act.
2. Mr Albiston entered his guilty plea at the third directions hearing on 6 December 2019. It was not in dispute that this was the first available opportunity for him to do so and that he is entitled to the maximum discount of 25% (R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [160]).

Contrition and Remorse

1. Pursuant to s 21A(3)(i) of the CSPA, remorse will only be a mitigating factor if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both),
2. In Waste Recycling and Processing Corporation Preston J stated (at [203]): 203 Contrition and remorse will be more readily shown by the offender taking actions, rather than offering smooth apologies through their legal representatives. The actions underlying genuine contrition and remorse may take at least four forms.
3. In his first affidavit, Mr Albiston stated the following: Regret and remorse 46 If I had been in a financial position to assist with disposal of the PE product held at Foreshore Road, I would have. To this day I still struggle mentally with not being able to remove this product or find an effective way to have it recycled. I set out from the onset honestly believing that the PE product could be recycled but as time went on and customers came back indicating that the contaminants were greater than I was led to believe, I blamed myself for entering into the agreement with HydroMet… 47 I honestly believed that I could make a difference and recycle plastics correctly…I believed that I could reduce the impact on the environment and help reduce our carbon footprint. But I was very naïve, on reflection, in my business dealings with HydroMet. 3R-Systems should have insisted on testing the product that HydroMet had placed at Murrells, and not trusted the samples that HydroMet gave to 3R. 48 I am ashamed that 3R- Systems failed and was unable to dispose of the PE waste left behind at Foreshore Road, and that others were left to deal with the waste product.
4. However, as the EPA submitted, there is no evidence that Mr Albiston made any attempt to rectify the harm that was caused by the offence. That is, Mr Albiston abandoned the waste at the premises after he placed 3R into voluntary administration on 28 September 2016. He told EPA officers on 7 October 2016 that he did not have a plan for removing the waste and that he had "handed everything over to the administrators".
5. There is also no evidence that Mr Albiston made any attempt to contact Substantia to offer to help remove the waste at any stage.
6. Further, Mr Albiston did not voluntarily report the offence to the EPA. It was only by chance that an EPA officer noticed the waste being stored at the premises while attending a neighbouring property on 23 August 2016.
7. In addition, Mr Albiston sought to deflect blame onto HydroMet for misleading him as to the lead content of the waste.
8. In these circumstances, the EPA submitted, and which I accept, that Mr Albiston has not fully accepted responsibility for his offending. Therefore, s 21A(3)(i) of the CSPA operates to a limited degree as a mitigating factor.

Mr Albiston's Cooperation with the EPA

1. Mr Albiston cooperated with the EPA's investigation insofar as he responded to the EPA's various notices to provide information and/or records, and cooperated in the preparation of the statement of agreed facts and the bundle of agreed facts in these proceedings.
2. However, Mr Albiston told Officers Newman and Frost on 7 October 2016 that the lead content of the waste was "less than 1 percent" notwithstanding that he was aware at the time that the data sheets said that its lead content was 2-3%. Mr Albiston then told the EPA on 6 September 2018 that he thought the lead content was "greater than 5%". In his first affidavit Mr Albiston stated that "after a number of companies had received those samples, 3R- Systems became aware that the PE product did not appear to be of the same quality compared to the initial samples provided to 3R by HydroMet, and it has a higher lead content".
3. The above evidence suggests that Mr Albiston initially sought to mislead EPA officers in the course of their investigation. However, his subsequent conduct demonstrated cooperation with the EPA. I have therefore taken this cooperation into account as a mitigating factor.

Good Character

1. Mr Albiston filed three character references in these proceedings from the following people: Mr Wayne D'Souza; Mr Micro Main, director of Rotech Australia; and Mr James Gan.
2. Each referee stated they had known Mr Albiston for 15 or 20 years. Each attested to the fact that they had been made aware of the charge that Mr Albiston has pleaded guilty to, and referred to his positive involvement in the local community.
3. In his first affidavit, Mr Albiston deposed that he provides food to the homeless through his new business Vicolo Café and that he recently gave free coffees to people queuing for Centrelink as a result of the COVID-19 crisis.
4. The EPA submits that this evidence carries little weight as these instances occurred after the offending the subject of these proceedings. I disagree.
5. In any event, there is no evidence before the Court that Mr Albiston is not of good character but for the commission of the offence. I accept the evidence provided in the character references and find that Mr Albiston is of good character. I have taken this factor into account in determining the imposition of an appropriate sentence.

Likelihood of Reoffending

1. In his first affidavit Mr Albiston stated that he became anxious and depressed after 3R was put into liquidation and that "not long after dealing with the impacts of losing 3R- Systems, my mental ability to deal with circumstances and the guilt of letting so many people down overwhelmed me." Annexed to Mr Albiston's first affidavit is a discharge summary from Wollongong Hospital dated 12 October 2016, which states that Mr Albiston had been admitted because of "financial, social and marital stress".
2. Also annexed to that affidavit is a report dated 8 May 2020 from Mr Rodney Ward, a clinical psychologist who treated Mr Albiston immediately after his hospital admission. Mr Ward stated that following an assessment, Mr Albiston met the criteria for depression.
3. Having noted this, for approximately five months during 2017 Mr Albiston was the National Sales Manager for MRI E-cycle Solutions ("MRI"), a recycling company headquartered in Victoria that processes used electronic and electrical equipment and batteries. In his second affidavit, Mr Albiston stated that he left that business because he felt that recycling was not a priority for the company and that this was inconsistent with his ethics and values. As a result of his experiences with both 3R and MRI he stated that he has no desire to return to the waste industry.
4. Notwithstanding this subsequent employment in the waste recycling industry, given the devastating effect that the collapse of his business has had on his physical and mental health, I am of the view that it is highly unlikely that Mr Albiston will return to work in that industry. I therefore find that Mr Albiston is unlikely to re-offend.

The Offence Could Have Been Prosecuted in the Local Court

1. In Harris v Harrison [2014] NSWCCA 84; (2014) 86 NSWLR 422 the Court of Criminal Appeal stated that this Court must take into account whether an offence could have been prosecuted in the Local Court where the maximum applicable monetary penalty is lower (at [92]). This offence could have been brought in the Local Court. I have taken this matter into account.

General and Specific Deterrence

1. One of the purposes of the Court in imposing a sentence is to prevent crime by deterring the offender and other persons from committing similar offences. This purpose is enshrined in s 3A(b) of the CSPA (Gittany Constructions at [188]-[190] and [192] and Rands at [161]).
2. General deterrence is vital "to ensure that the penalty imposed acts to deter those who might engage in similar activities from committing like offences" (Mouawad at [188] and Axer at 359).
3. As was stated by Pain J in Environment Protection Authority v Smart Skip (NSW) Pty Ltd [2009] NSWLEC 204 in relation to an offence committed under s 144(1) of the POEOA (at [35]): 35 Given the importance of enforcing the regulatory regime for the management of waste by those operating waste facilities for profit, general deterrence is an important consideration. A nominal fine will not be sufficient. I consider that the imposition of an appropriate sentence must contain an element of general deterrence in all the circumstances.
4. A sentence must be imposed that makes it economically irrational for persons to disobey the law in storage of waste (Axer at 359-360 and Waste Recycling and Processing Corporation at [229]-[232]). Any monetary penalty imposed must be more than the cost of doing business.
5. Specific deterrence relates to the need to deter the individual offender from reoffending. Although Mr Albiston is not employed in the waste recycling industry at present, the EPA submitted that an element of specific deterrence was nonetheless warranted because he had been employed in that industry since the commission of the offence, and it was possible that he would return to it at some point in the future.
6. Mr Albiston submitted that specific deterrence should not play a significant role in the sentence imposed because: 1. there was no deliberate pattern of pre-existing offending conduct by him; 2. in committing the offence he was endeavouring to recycle the waste and was well intentioned, although ultimately he was naive in his business dealings and decisions; and 3. there was no likelihood of him re-offending.
7. I accept Mr Albiston's submission in this regard. I find that specific deterrence is not an element of the penalty to be imposed in this case.

Retribution and Denunciation

1. Finally, it should be noted that the purposes of retribution and denunciation are also relevant. In particular, the Court must impose a sentence that achieves the purposes of denouncing the conduct the subject of the offence and making Mr Albiston accountable for his actions.

Consistency in Sentencing

1. The Court must have regard to comparable cases from which guidance can be obtained to ensure that the penalty imposed is consistent with a pattern of sentencing for like offences. Of course care must be taken when comparing cases as there may be many divergent facts and circumstances, and a sentence in one case does not demonstrate the limits of a sentencing judge's discretion (Axer at 365 and Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at [35)].
2. The EPA referred to Smart Skip, Gilder and Robinson as comparable cases, but noted that the volume of waste that Mr Albiston stored was much higher than that stored in Gilder and Robinson.
3. In Smart Skip the corporate defendant was convicted of storing more than 55,000 tonnes of construction waste at a premises. Waste in excess of 30,000 tonnes required an EPL. There was no evidence of actual environmental harm, although there was a likelihood of potential harm to the environment and this likelihood was foreseeable. The offence was committed in order to obtain a commercial advantage and to save the defendant from the expense of complying with the development control legislation and the requirements of the POEOA. The defendant pleaded guilty at an early opportunity and expressed remorse. The defendant cooperated with the prosecuting authority and demonstrated that it had taken reasonable measures to prevent any further breaches of the waste tonnage limits under the POEOA and was unlikely to re-offend. The defendant was fined the sum of $50,000 and ordered to pay the prosecutor's costs of $20,000. A publication order was also made.
4. Robinson concerned a corporate defendant and an individual defendant who were convicted of offences under s 144(1) of the POEOA for storing 2,230 m3 of waste, which was contaminated with asbestos, in an environmentally sensitive area without a licence. The offences resulted in both actual harm and potential harm to the environment. The offences were found to have been committed negligently and for commercial purposes, but the Court held that the defendants' reasons for committing the offences increased the objective seriousness of the offences to only a "very limited degree" (at [96]). The offences were characterised as being of low to medium objective seriousness. Mr Robinson was found to have expressed genuine contrition and remorse. The Court noted that the subjective circumstances of both defendants mitigated the sentence imposed to a significant degree. It considered the extra-curial punishment that Mr Robinson had suffered due to his standing in the community, and the fact that Mr Robinson had incurred great financial detriment as a consequence of the offending. The totality principle also applied. The Court imposed a fine of $13,400 against the company and $10,050 on Mr Robinson. Mr Robinson was ordered to pay the prosecutor's professional costs in the amount of $20,500 and investigation costs of $3,500. Publication orders were also made.
5. The defendant in Gilder was charged with an offence under s 144(1) of the POEOA for being a person concerned in the management of a company that stored in excess of 2,500 m3 of waste at a site without an EPL. Mr Gilder was the site manager of Newcastle Waste Recycling Pty Ltd ("NWR") which stored 20,000 m3 of construction waste, including asbestos waste, on leased premises. NWR intended to recycle some of the waste and dispose of the remainder in landfill. The storage of waste caused actual harm including by asbestos contamination, the emission of impurities when the waste caught on fire, and by impacting upon the surface of the site and visual amenity. The parties agreed that there was the potential for future harm consisting of adverse health impacts on the staff onsite and other persons. Mr Gilder was found to be criminally negligent in the commission of the offence. The offence was committed for financial gain, although none eventuated. Practical measures could have been taken by the defendant to prevent and mitigate the harm caused, and the actual and potential harm were foreseeable. Mr Gilder was found to have had primary responsibility for the day-to-day operations on the site, and therefore, had control over the causes of the offence. Justice Robson found that the offence was in the lower range of objective seriousness. Mr Gilder cooperated with authorities, expressed genuine contrition and remorse and received the full 25% discount for his early guilty plea. The defendant was fined $37,000 and was ordered to pay the prosecutor's costs, which were estimated to be in the order of $25,000 to $30,000.
6. The case of Rands arose out of the same factual matrix as Gilder. Mr Rands was a co-director of NWR. Again, actual and potential harm was found to have been caused by the commission of the s 144(1) offence, and the harm was foreseeable. Mr Rands was found to have committed the offence negligently and for commercial gain. He had control over the causes of the offence and could have taken practical measures to prevent or mitigate the environmental harm. The offence was characterised as being at the upper end of the lower range of seriousness. Mr Rands pleaded guilty at the earliest available opportunity and cooperated with the authorities in the investigation of the offence. It was held that specific deterrence was not required as Mr Rands no longer worked in the waste industry and did not intend to do so in the future. However, the defendant did not directly demonstrate any contrition or remorse for the offending. The Court found that the appropriate penalty was a fine of $45,000 which was discounted by 25% for Mr Rands's early guilty plea to $33,750. Mr Rands agreed to pay the prosecutor's costs of $24,500.
7. I have considered each of the cases above and I have compared them with the facts and circumstances of the present case. I note that the above cases dealing with individual defendants contained findings of criminal negligence and actual and greater potential environmental harm than the present case.

Financial Means of the Offender

1. Section 6 of the Fines Act 1966 provides that: 6 Consideration of accused's means to pay In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider: (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount.
2. In Rahme v R (1989) 43 A Crim R 81 Finlay J said (at 86-7): That case [Jamieson (1975) 60 Cr App R 318] is authority for the broad proposition that once determination has been made that a fine should be imposed the correct procedure in assessing the appropriate amount of the fine is to determine it by reference to the gravity of the offence for which it is imposed. If the court is satisfied that the offender would be unable to pay the amount determined it may reduce it to take account of the offender's means and impecuniosity. For my part, I do not think that his Honour erred in fixing $22,000 by reference to the gravity of the offence for which it was imposed, but on the material available, as it appears on the face of it that the appellant would be unable to pay that amount, the fine in my opinion is required to be reduced.
3. In Environment Protection Authority v Hanna [2018] NSWLEC 80, Preston J stated (at [267]): 267 However, whilst the means of an offender to pay any fine is a mandatory consideration, it may not be decisive. Other sentencing considerations, such as achieving general deterrence, may justify imposing a fine in a certain amount, even if the offender is unlikely to be able to pay the fine: Smith v The Queen at 23, 24; Darter v Diden (2006) 94 SASR 505; [2006] SASC 152 at [29]-[32]; Mahdi Jahandideh v R [2014] NSWCA 178 at [15]-[17]. This may particularly be the case in sentencing for offences where general deterrence is needed and where the offender is a corporation rather than a natural person: see Environment Protection Authority v Capdate Pty Ltd (1993) 78 LGERA 349 at 353; Environment Protection Authority v Emerald Peat Pty Ltd (in liq) [1999] NSWLEC 147; Environment Protection Authority v Douglass (No 2) [2002] NSWLEC 94 at [16]; Bentley v BGP Properties Pty Ltd at [270]-[275].
4. Mr Albiston submitted that he has limited means and a modest income, and therefore, "has limited capacity to pay a significant fine, noting that the prosecutor's costs are likely to be in the order of $60,000". It is not clear what would constitute a "significant fine" for Mr Albiston.
5. Mr Albiston bears the onus of establishing that he is unable to pay the monetary penalty likely to be imposed by the Court.
6. Attached to Mr Albiston's first affidavit was various financial information, including a summary of his finances which indicated that he has a personal income of $2,014 a week with an additional income of $150 per fortnight from his superannuation fund, and expenses of $1,873 per week. He owns a car worth $19,500. He also runs a café which generates income. Mr Albiston deposed that he has $87,772 in cash and superannuation and $78,500 worth of assets.
7. The following evidence was also annexed to Mr Albiston's first affidavit: 1. the results of a NSWLPI search that indicates that there is no record of Mr Albiston owning any property in his own name; 2. a bank statement in the name of "SA Engineering Solutions Pty Ltd ATF Albiston Financial Investments Trust" indicating that it had $4,913 in cash as at 20 April 2020. ASIC records obtained by the EPA during its investigation indicate that Mr Albiston was appointed as the director of SA Engineering Solutions Pty Ltd on 19 October 2007; 3. a bank statement for Vicolo Aust Pty Ltd indicating that it had $8,527 in cash as at 1 May 2020. Mr Albiston stated in his first affidavit that he runs Vicolo Café with his partner and that it is "financially viable"; 4. a statement in the name of "SA Engineering Solutions Pty Ltd ATF Albiston Superannuation Fund" indicating that there was $77,278 in the account as at 31 December 2019; and 5. two statements in his name for two different accounts held with Credit Corp Group, indicating that as at 5 May 2020, Mr Albiston owed it $14,630.
8. Mr Albiston did not provide any of his recent individual income tax returns or any recent tax returns for Vicolo Aust Pty Ltd or SA Engineering Pty Ltd. Mr Albiston also appears to receive approximately $2,000 per week from QBE insurance.
9. The evidence adduced by Mr Albiston is incomplete and does not give a comprehensive picture of his financial position. I do not consider that Mr Albiston has discharged his onus of proving that he is unable to pay whatever monetary penalty that the Court is likely to impose.

Mr Albiston Agrees to Pay the EPA's Costs

1. Mr Albiston agreed to pay the following costs of the EPA: 1. investigation costs in the amount of $2,670; and 2. legal costs in the amount of $37,198.
2. While it is legitimate to take into account any associated costs order in determining the appropriate penalty to be imposed (Harris at [100], Environment Protection Authority v Barnes [2006] NSWCCA 246 (at [78]) and Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58 at [123]), an order for costs does not result in a reduction in any monetary penalty imposed to an amount lower than that suggested by the general pattern of sentencing for the relevant offence (Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170 at [50]).
3. As was noted in Gilder (at [189]): 189 It is now well accepted that a fine and a costs order serve different purposes in that a fine serves the purposes of sentencing for the offence committed by the defendant including punishment whereas a costs order serves to compensate the prosecutor, and whilst it forms part of the punishment of the defendant, it is not of itself a reason to reduce the fine otherwise considered appropriate: Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170 at [50].

Appropriate Sentence

1. Having regard to the objective seriousness of the offence and the applicable subjective factors, together with the penalties imposed in the relevant comparable cases, I consider that the appropriate penalty to be imposed for Mr Albiston's contravention is a fine of $30,000. This figure must be discounted by 25% for the utilitarian value of his plea of guilty.
2. This results in a fine of $22,500.

Any Monetary Penalty to be Paid to the Environmental Trust

1. The EPA sought an order that any monetary penalty imposed by the Court be paid to the Environmental Trust pursuant to s 250(1)(e) of the POEOA. Such an order is appropriate in all the circumstances of this case.

Orders

1. The Court therefore makes the following orders: 1. the defendant is convicted as charged; 2. the defendant is fined the sum of $22,500; 3. pursuant to s 250(1)(e) of the Protection of the Environment Operations Act 1997, the financial penalty imposed under order 2 is to be paid to the Environmental Trust established under the Environmental Trust Act 1998 for general environmental purposes; 4. pursuant to s 257B of the Criminal Procedure Act 1986, the defendant is to pay the prosecutor's legal costs agreed in the sum of $37,198; 5. pursuant to s 248(1) of the Protection of the Environment Operations Act 1997, the defendant is to pay the prosecutor's investigation costs agreed in the sum of $2,670; and 6. the exhibits are to be returned.

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: 10 July 2020