(1993) 82 LGERA 21
Chief Executive, Office of Environment & Heritage v Orica Pty Ltd
Source
Original judgment source is linked above.
Catchwords
(2006) 145 LGERA 234
Burwood Council v Erector Group Pty LtdBurwood Council v Liverpool Developing Pty Ltd [2017] NSWLEC 20
Cameron v Eurobodalla Shire Council [2006] NSWLEC 47(2006) 146 LGERA 349
Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683(1993) 82 LGERA 21
Chief Executive, Office of Environment & Heritage v Orica Pty Ltd(2009) 168 LGERA 121
Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280(2008) 163 LGERA 71
Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289(2006) 148 LGERA 299
Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242(2006) 145 LGERA 189
Hili v The QueenJones v The Queen (2010) 242 CLR 520[2010] HCA 45
Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66
Pearce v The Queen (1998) 194 CLR 610[1998] HCA 57
R v HolderR v Johnston [1983] 3 NSWLR 245
R v ThomsonR v Houlton (2000) 49 NSWLR 383[2000] NSWCCA 309
Waldron v Hensler (1987) 163 CLR 561
Judgment (33 paragraphs)
[1]
Background facts
The majority of the facts in the case are agreed and were presented to the Court as the Statement of Agreed Facts ('SOAF'). The Prosecutor filed some additional asserted facts in a Statement of Asserted (Not Agreed) Facts ('SONAF').
I adopt the SOAF as well as paragraphs 8, 10 and 11 of the SONAF which were conceded by Ardent. Accordingly, I summarise the agreed background facts as follows.
Ardent was formed on 28 April 2003 and has been part of the Ardent Leisure Group since 2009. From about 1 July 2003 until 15 August 2017, Ardent was the operator of the d'Albora Marina business which operated seven marinas in New South Wales and Victoria including the Marina the subject of these proceedings.
The Marina is located approximately three kilometres from the Sydney central business district. It contains 106 wet berths and facilities for diesel and unleaded fuel sales.
The Licence was granted to Omni Leisure Operations Ltd on 30 January 2001. It was transferred to Macquarie Leisure Operations Ltd (later Ardent) on 21 July 2003. Ardent held the Licence from that date until its divestment of the Marina in 2017, including at the date of the Incident.
[2]
The UPSS
The Incident involved the Marina's underground petroleum storage system ('UPSS') which included three key underground storage tanks: a fuel tank with a capacity of 27,000 litres which was used to store unleaded petrol ('ULP1'), a fuel tank with a capacity of 27,000 litres which was used to store diesel ('D1') and D2 which had a capacity of 1,000 litres and which was not in use. There were six other underground fuel tanks at the Marina which are not relevant to the present proceedings. ULP1, D1, and D2 were located under the promenade hardstand which runs between the two main buildings at the Marina.
The parties agreed that when in use, underground fuel storage tanks typically have fill points (for filling by fuel suppliers), delivery lines (for delivering fuel to a bowser) and vents (to regulate pressure). At the time of the Incident, the following system of pipes, valves and other equipment associated with ULP1, D1 and D2 was in-situ:
1. each tank had a dedicated submersible turbine pump that was connected to electrical services;
2. the electrical services for each pump were connected to separate contactors/breakers on a power board located on a building near the tanks;
3. the D2 turbine pump was connected to a flexible steel delivery pipe;
4. the D2 tank had an isolation valve between the flexible steel pipe and a delivery line consisting of HDPE pipe;
5. ULP1 had a separate HDPE delivery line that ran from the turbine pump out to a sump at the seawall and then to a bowser on a pontoon;
6. D1 had a HDPE delivery line that ran from the D1 turbine pump out to a sump at the sea wall and then to a bowser on a pontoon;
7. the delivery line from D2 was T-sectioned into the D1 delivery line by a short section of HDPE pipe;
8. the T-section connection of the D2 delivery line into the D1 delivery line was at a point beneath the concrete promenade, and behind the brick wall of the Work Pit;
9. both ULP1 and D1 had fill points, fill lines and vent lines. ULP1 also had vapour recovery equipment; and
10. the D2 tank fill point, fill line, and vent line had been removed.
A laminated sign in the Work Pit indicated that the D2 tank and pump were not in use.
At the time of the Incident, fuel sales at the Marina operated on a 24 hour basis. The fuel bowsers were located on a floating pontoon over the waters of Rushcutters Bay. A customer would operate a bowser by inserting the nozzle into the fuel tank of the vessel and pressing the nozzle handle. This would activate the electric turbine pumps on the relevant tank which would in turn cause fuel to be pumped from that tank via the underground pipes to the vessel.
[3]
Environmental Protection Plan
On 10 May 2012, Cardno Lane Piper Pty Ltd ('Cardno Lane Piper') produced an Environmental Protection Plan pursuant to Ardent's statutory requirements ('2012 EPP').
In 2015, the 2012 EPP was updated, but only by updating the staff and contact details of relevant persons to which the 2012 EPP referred ('2015 EPP').
Neither the 2012 EPP nor the 2015 EPP contained accurate "as-built" drawings, as required by the UPSS Regulation.
[4]
Contract work undertaken on the UPSS
Work was conducted in respect of fuel line replacements for D1, D2, and ULP1 by a contractor named Lofty's Installations in 2002. Lofty's Installations prepared a memorandum in respect of this work. At around this period, a fuel line which had originally run from D2 to the bowsers at the wharf was removed.
In early June 2005, MassTech Australia Pty Ltd provided Ardent with a report entitled "UPSS Precision Test Report" and dated 2 June 2005 ('Precision Test Report'). The Precision Test Report contained a diagram which showed the D2 delivery line was connected to D1.
As early as March 2006, Petrolink Pty Ltd ('Petrolink'), a company specialising in the design, installation, and management of industrial petro-chemical storage and delivery systems, undertook inspections of the UPSS. In 2009, Petrolink engaged Leighton O'Brien Pty Ltd ('Leighton O'Brien'), a specialist tanks and fuel line management services company, to produce a document entitled "Petrolink's Underground Petroleum Storage System - Integrity Test" ('Integrity Test Report').
In May 2012, decommission works were carried out on D2 by Enviropacific Services ('Enviropacific'). However, it was agreed that in the course of its work, Enviropacific failed to: cut or remove the delivery line from the D2 tank; remove the tank's turbine/pump and electricity supply cables; and excavate beyond a point where the delivery line from D2 passed through the wall of the Work Pit.
Petrolink had tendered unsuccessfully for the decommission works that were carried out by Enviropacific.
[5]
The Incident
Notwithstanding the fact that Enviropacific had purportedly decommissioned D2, Ardent engaged Petrolink to decommission D2, amongst other works, on 22 April 2016. At the time Petrolink was engaged, Ardent was not aware of the existence of a "Certificate of Abandonment" which had been issued by Enviropacific in respect of D2.
Prior to undertaking the relevant works, Ardent did not advise Petrolink of the possibility that D2 was connected to an active fuel tank. Petrolink was in possession of the Integrity Test Report which did not show the connection between the D1 and D2 delivery lines.
Martin Silk, who was, at the time of the Incident, Ardent's Safety and Environment Officer for the Marina, was aware that Craig Boné of Petrolink, who was responsible for overseeing Petrolink's works, believed that the D2 delivery line had been cut off years before.
Ardent did not provide Petrolink or Mr Boné with the Precision Test Report and the diagram contained therein which showed that D1 and D2 were connected. Nor did it provide Petrolink or Mr Boné with a copy of the memorandum prepared by Lofty's Installation in respect of the work it conducted at the Marina.
Petrolink conducted a site inspection on 16 May 2016 and commenced decommission work on D2 the following day, 17 May 2016.
As part of that work, Petrolink cut through the concrete hardstand directly above tank D2, exposing the top of the tank and the Work Pit. The following equipment was visible within the Work Pit:
1. a turbine pump connected to the top of the tank;
2. electrical services connected to the turbine pump;
3. a delivery line from D2 which comprised a portion of flexible steel pipe which led from the turbine pump on top of the tank to one side of a ball valve which was in a closed position and a portion of HDPE pipe which led from the other side of the ball valve and through the wall of the Work Pit; and
4. a laminated sign indicating that the D2 tank had been decommissioned.
In order to inspect the contents of the tank and pump in foam as part of the decommissioning work, it was necessary for Petrolink to remove the turbine pump. The workers were constrained by the size of the Work Pit, and decided to remove the delivery line from D2 so as to access the bolts which attached the turbine pump to the top of the tank.
[6]
Response to the Incident
Ardent and Petrolink became aware of the Incident at approximately 7.40pm. Mr Bergamin initially believed the news was a hoax. Ardent immediately notified New South Wales Port Authority ('NSWPA'), the EPA, SafeWork NSW, District Health Service, Roads and Maritime Services, and NSWFRS.
Ardent's Marina Manager was at the Marina within one hour of the Incident and implemented an immediate and extensive response. In concert with Petrolink employees, NSWFRS, and the NSWPA, Ardent deployed additional staff to use spill equipment including absorbent pads, booms to encapsulate the spill area, skimming equipment, and a suction tanker.
Approximately 14,000 litres of "spill kit" and 12,000 litres of contaminated water were recovered.
At 6.30am on 18 May 2016, Petrolink workers capped the severed HDPE pipe with a NUPI termination fitting.
Officers from the EPA attended the site at approximately 11.45am on 18 May 2016. They took photographs and collected samples from D1, the waters adjacent to Rushcutters Bay, and the shoreline. Samples taken from adjacent waters showed traces of diesel from D1.
The clean-up operations lasted several days. The majority of the diesel was cleaned up within three days, but the booms were left in place for a week, and removed only after Ardent consulted with the EPA.
[7]
Relevant legislation
Section 120 of the POEO Act provides:
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.
It is agreed between the parties that the UPSS at the Marina meets the definition of "storage system" in cl 3 of the UPSS Regulation which provides:
storage system means a system of tanks, pipes, valves and other equipment that is designed:
(a) to contain petroleum, or
(b) to control the passage of petroleum into, out of, through or within the system,
and includes any structure through which petroleum routinely passes from one part of the system to another.
Clause 19(1) of the UPSS Regulation provides:
(1) A storage system must not be used:
(a) unless an environment protection plan is in place in relation to the system, and
(b) otherwise than in accordance with that plan.
Clauses 19(2) and (3) set out things which must be included in an environment protection plan ('EPP') for such a document to satisfy the requirement set out in cl 19(1). They provide:
(2) A storage system's environment protection plan must include:
(a) a loss monitoring procedure, and
(b) an incident management procedure, and
(c) a maintenance schedule, and
(d) the current "as-built" drawings for the system, and
(e) a plan of the storage site that includes the locations of each of the following:
(i) the storage system,
(ii) all buildings and associated infrastructure,
(iii) all fences and gates,
(iv) all groundwater monitoring wells (including any codes or symbols by which they are designated),
(v) any unsealed ground surfaces,
(vi) all drainage and services, and
(f) a copy of each list of industry standards referred to in clauses 5 (1) (b) (i), 6 (1) (b) (i), 9 (1) (b) (i), 10 (1) (b) (i), 17 (1) (b) and 18 (1) (b) (iii), and
(g) a copy of all specifications referred to in clauses 5 (1) (b) (ii), 6 (1) (b) (ii), 9 (1) (b) (ii) and 10 (1) (b) (ii), and
(h) the information required by subclause (3).
(3) The information to be included in the environmental protection plan for a storage system is as follows:
(a) the name of the person responsible for the system and an address for service and a 24 hour contact phone number for that person,
(b) if the person responsible for the system is a corporation:
(i) the name of a natural person who is authorised to act on behalf of the corporation in relation to the control of the system, and
(ii) a 24 hour contact phone number for that person,
(c) the street address of the storage site,
(d) the land title particulars (such as the lot and DP numbers) of the land on which the system is situated,
(e) if the person responsible for the system is not the owner of the storage site, the name of the owner,
(f) details of access to, and the security of, the system, including details of any locks, gates, fences and the like and the means of opening them,
(g) the location of all records kept in accordance with Part 5 (including secondary leak detection system reports).
[8]
The evidence
In addition to the SOAF and SONAF, the Prosecutor's evidence included three folders of appended documents to those statements, an affidavit of Mr Boné with an attached exhibit, and a record of interview in relation to the offences.
Ardent relied upon affidavits of Mr Silk, Ardent's Safety and Environment Officer for the Marina; Bronwyn Anne Weir, Ardent's Company Secretary; Brett Alfred Bolton, the former Chief Executive Officer of the Marina business; and David Alfred Moore, a qualified engineer.
[9]
Principles relating to sentencing
The POEO Act sets out the matters which are to be taken into account when sentencing for offences committed under that Act.
Section 241 provides:
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.
(2) The court may take into consideration other matters that it considers relevant.
Also of relevance are the principles set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act').
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.
Subsections 21A(2) and (3) of the Sentencing Act also set out numerous aggravating and mitigating factors that the Court must take into account, where they arise in the circumstances.
Importantly, the sentences to be imposed on Ardent for the offences must be proportionate to both: the objective seriousness or gravity of the offences; and the personal or subjective circumstances of Ardent.
[10]
Objective circumstances
In determining the objective seriousness or gravity of the offences, the relevant objective circumstances are: the nature of the offence; the maximum penalties under the relevant acts; the environmental harm; the foreseeability of the risk of environmental harm; the practical measures to prevent environmental harm; the control over the causes giving rise to the offences; and whether the offences were committed with any state of mind or for financial gain. I will consider each in turn.
The Prosecutor submitted that the offences are objectively serious. With respect to the UPSS Regulation Offence, the Prosecutor submitted it falls within the "high range" of objective seriousness. It submitted that the Water Pollution Offence falls within the "moderate to high range" of objective seriousness for offences of that kind.
Ardent submitted that the UPSS Regulation Offence falls within the "higher range" of objective seriousness for offences of that kind, and that the Water Pollution Offence is within the "moderate range" of objective seriousness.
[11]
Nature of the offences
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, see Environment Protection Authority v Coe Drilling Australia Pty Ltd [2005] NSWLEC 719 at [128]-[129], [133]; Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234 at 242-246, 259; Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289; (2006) 148 LGERA 278 at 290-291; Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 ('EPA v Orica') at [59].
Considering the objects of an Act can assist in identifying the purpose of creating an offence, see Environment Protection Authority v Le Dome Pty Ltd [2002] NSWLEC 167; (2002) 125 LGERA 121 at 132; Environment Protection Authority v Coe Drilling Australia Pty Ltd [2005] NSWLEC 719 at [132]. Accordingly, in determining the appropriate sentence to be imposed on Ardent, it is instructive to have regard to the objects of the POEO Act and the UPSS Regulation.
The relevant objects of the POEO Act are 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,
…
The Prosecutor submitted that the object of the UPSS Regulation is reflected in the Explanatory Note to its predecessor, the Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2008 (NSW). The Prosecutor observed that cl 19(2) was relevantly identical in its earlier iteration. The Explanatory Note provided:
The object of this Regulation is to regulate the storage systems so as to minimise the risk of the discharge of systems that cause significant damage to the environment.
[12]
Maximum penalty
The maximum penalties for offences are relevant in determining the objective gravity of the offence. As the Prosecutor submitted, the maximum penalty in each case is an expression of the seriousness with which Parliament views these offences (see Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683; (1993) 82 LGERA 21 ('Camilleri's Stock Feeds') at 698), and Ardent's offending should be considered in this light.
The maximum penalty for an offence against s 120(1) of the POEO Act is $1,000,000. As such, it is clear that Parliament attaches significant gravity to such an offence.
The maximum penalty for an offence against cl 19(2)(d) of the UPSS Regulation is $44,000. That maximum penalty relates to the specific failure to keep current "as-built" drawings.
[13]
Environmental harm
Section 241(1)(a) of the POEO Act 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 Dictionary to the POEO Act defines the term "harm" as follows:
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.
The Prosecutor relied upon Camilleri's Stock Feeds for the proposition that the Court should exercise its discretion in sentencing on the basis that the more serious the environmental harm, the more serious the offence, and therefore ordinarily the higher the penalty.
The Prosecutor submitted that the extent of actual environmental harm is rarely capable of precise calculation. The Prosecutor submitted that the word "likely" in s 241(1)(a) means that the Court is not limited to consideration of the actual harm which has been established to the requisite standard on the evidence. Further, the Court is required to consider the likely consequence of the offending on the environment. The Prosecutor submitted that likely means "a real or not remote chance or possibility regardless of whether it is less or more than a fifty percent chance" (Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66 at [44]).
The Prosecutor cited the following passage from Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 ('Waste Recycling') at [145]-[147]:
[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: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 and Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [175]. Harm should not be limited to measurable harm such as actual harm to human health. It can also include a broader notion of the quality of life.
[146] Harm can include harm to the environment and its ecology. Harm to an animal or plant not only adversely affects that animal or plant, it also affects other biota that have ecological relationships to that animal or plant: Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [174].
[147] Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernable direct harm to human interest, should also be treated seriously.
[14]
Practical measures which may have been taken to prevent or mitigate the environmental harm
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 Prosecutor submitted that two simple measures could have been taken by Ardent to prevent or mitigate the environmental harm: it could have prepared accurate "as-built" drawings; and it could have supplied them to Petrolink.
In response to Ardent's submission that it relied upon Petrolink's expertise, the Prosecutor submitted that the conduct of Petrolink needed to be viewed in light of its understanding that D2 had been decommissioned. Further, the Prosecutor submitted that Petrolink was restricted by Ardent's instructions to the extent that Ardent indicated it wished to minimise the extent of excavation and to preserve the cobblestone hardstand.
Ardent submitted with respect to the UPSS Regulation Offence that it could have and should have taken the practical step of ensuring that accurate "as-built" drawings of the UPSS were prepared. If it had done so, Ardent accepted that the UPSS Regulation Offence would not have been committed.
With respect to the Water Pollution Offence, Ardent conceded that the creation of "as-built" drawings and the provision of those drawings to Petrolink was a practical measure that should have been taken. It additionally submitted that it would be reasonable to infer that had that measure been taken the Water Pollution Offence would not have been committed.
However, and without derogating from their concession of responsibility, Ardent submitted that it did take some steps to prevent the environmental harm. In particular, Ardent pointed to the engagement of two specialist and qualified experts, Enviropacific and Petrolink, to carry out works on the site. Ardent further submitted that it was in the process of undertaking a review and update of its risk management systems at the time of the Incident and the decision to decommission D2 was made to comply with its regulatory requirements. Ardent also submitted it believed Petrolink was the best contractor for this purpose, especially having regard to the fact that it had carried out the majority of the works on the UPSS from March 2006 to the time of the Incident.
[15]
Foreseeability of the harm
Section 241(c) of the POEO Act requires the Court to have regard to the foreseeability of the harm.
The Prosecutor submitted that the harm was clearly foreseeable.
Ardent submitted that, with respect to the Water Pollution Offence, it was reasonably foreseeable that the harm of the type caused would eventuate in the circumstance that diesel entered Rushcutters Bay.
With respect to the UPSS Regulation Offence, Ardent accepted that it was reasonably foreseeable that its failure to have and provide "as-built" drawings of the UPSS had the potential to cause mistakes in the process of decommissioning D2 and thereby increased the risk of accidental discharge of diesel fuel into Sydney Harbour.
However, Ardent submitted that the Court should again take into account that Ardent reasonably relied upon Enviropacific and Petrolink to decommission D2 in accordance with accepted industry standards.
I do not accept Ardent's submission that the harm was rendered less foreseeable by its reliance upon Enviropacific and Petrolink to decommission D2 in accordance with accepted industry standards and I find that the harm was clearly foreseeable.
[16]
The extent to which the defendant had control over the causes
Section 241(1)(d) requires the Court to take into account the extent to which the defendant had control over the causes.
The Prosecutor submitted that Ardent had complete control over the causes giving rise to the offences.
Ardent accepted that it had full control over the circumstances that gave rise to the UPSS Regulation Offence. However, with respect to the Water Pollution Offence, Ardent again accepted that its failure to provide "as-built" drawings to Petrolink contributed to the Incident occurring, but that it was entitled to expect that the specialist contractors it engaged would perform their decommissioning tasks in accordance with accepted standard industry practice.
In the circumstances it is clear and I find that Ardent had control over the circumstances that gave rise to the UPSS Regulation Offence and, again, I find that Ardent's failure to provide the "as-built drawings" to Petrolink contributed to the Incident occurring. As I have found above in relation to practical measures and foreseeability, I find that Ardent had control over the circumstances that gave rise to the UPSS Regulation Offence. Whilst some reliance on contractors is understandable, I also find that Ardent had control over the circumstances that gave rise to the Water Pollution Offence.
[17]
Heightened state of mind
The Prosecutor submitted that Ardent was aware that it was obliged to keep "as-built" drawings and that operating the Marina without them was unlawful. The Prosecutor noted that it was not until 2012 that the requirement to have an EPP was met when the 2012 EPP was produced, and that it was clear that the diagrams in the 2012 EPP were not compliant.
Further, the Prosecutor observed that Cardno Lane Piper recommended to Ardent updated "as-built" drawings of the UPSS be prepared, but submitted that this advice was ignored. The Prosecutor submitted that the Court should infer in the circumstances that this was deliberate.
The Prosecutor submitted that such an inference is supported by the facts that: the Plan prepared by Mr Silk in November 2014 was not an "as-built" drawing; that the 2015 EPP also stressed the need for updated "as-built" plans; and that in November 2015 a further EPP prepared by Mr Silk recognised the need for "current 'as-built' drawings for the system" but that none were produced.
Further, the Prosecutor submitted that, whilst it is not a criticism of Mr Silk, the fact that he was in charge of workplace and environmental safety at all of Ardent's marinas at the time of the Incident whilst only working two days a week was indicative of the fact that Ardent did not take its environmental obligations seriously. The Prosecutor submitted that it was in those circumstances that the recommendation to produce updated "as-built" drawings was "put on the backburner" for 18 months until the time of the Incident.
In those circumstances, the Prosecutor submitted that the Court should infer that the UPSS Regulation Offence was committed with a "heightened state of mind", and that it was committed deliberately.
Ardent submitted that the Court should not make a finding that the UPSS Regulation Offence was committed deliberately. Ardent submitted that any such finding would have to meet the requisite threshold of being beyond reasonable doubt.
Ardent submitted that in order to satisfy that threshold, it would be necessary to show that Ardent knew the drawings were inaccurate. Whilst it acknowledged that the Precision Test Report showed that there was a link between D1 and D2, Ardent submitted that it did properly pay attention to this. Ardent submitted that this was only a pressure test, and whilst it conceded on the evidence that it should have known the drawings contained in the EPPs were not accurate, it did not know, and that knowledge cannot be imputed beyond a reasonable doubt.
[18]
Conclusion on objective seriousness
Whilst there was some agreement between the Prosecutor and Ardent in relation to a number of the objective circumstances, there was, as noted above, disagreement as to where the offences fall in the range of objective seriousness. In light of my findings above, at [64], [79]-[81], [91]-[92], [98], [102] and [112]-[113], considering all the objective circumstances, I find that both offences are objectively serious.
I find that the Water Pollution Offence falls within the moderate range of objective seriousness for offences of this kind and that the UPSS Regulation Offence falls within the higher range of objective seriousness for offences of this kind.
[19]
Subjective circumstances
Consideration of the subjective circumstances requires consideration of those matters that relate to Ardent itself, rather than to the offences that give rise to the charges to which it has pleaded guilty. The matters I take into account include lack of prior convictions; the assistance given by Ardent to the authorities; the early pleas of guilty; Ardent's remorse; the measures taken to prevent recurrence; and the need for specific and general deterrence. These matters are reflected in s 21A of the Sentencing Act which provides for mitigating factors which are to be taken into account as follows:
(3) Mitigating factors
The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows:
…
(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),
(l) the degree of pre-trial disclosure by the defence (as provided by section 22A),
(m) assistance by the offender to law enforcement authorities (as provided by section 23).
[20]
Prior convictions
Ardent does not have any prior convictions for environmental offences. This is a mitigating factor pursuant to s 23A(3)(e) of the Sentencing Act.
[21]
Assistance to authorities
Ardent submitted and I accept that it provided a high level of assistance to the prosecuting authority and that it worked in cooperation with the EPA, among other organisations, in containing the effects of the Incident and cooperated with the EPA's investigation.
Whilst it acknowledged that any lesser penalty imposed by reason of a defendant's cooperation with a prosecuting authority must not be disproportionate to the objective seriousness of the offence, Ardent submitted that it would be appropriate for the defendant to receive a material discount for its assistance to the prosecuting authorities.
[22]
Early pleas of guilty
Ardent submitted, and the Prosecutor accepted, that it should be afforded a discount for its early plea of guilty in respect of both offences. I take into account the utilitarian value of this plea to the criminal justice system pursuant to ss 21A(3)(k) and 22(1)(a) of the Sentencing Act and R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309, and accordingly apply a discount of 25% for each of the offences on the sentence that would otherwise have been imposed.
[23]
Remorse for the offences and good character
Whilst it accepted that Ardent expressed contrition for its offences, the Prosecutor submitted that Ardent is not of good corporate character. It submitted that there was no evidence that Ardent took its environmental obligations seriously, but rather evidence that it did not take its obligations seriously.
The Prosecutor noted again in this regard that Cardno Lane Piper recommended in the 2012 EPP that updated "as-built" drawings of the UPSS be prepared, but that this was not done until after the Incident. It also pointed to the fact that Mr Silk, tasked with overseeing Ardent's compliance with its environmental responsibilities, only visited the site once every six months at a maximum. The Prosecutor reiterated that this is not a criticism of Mr Silk, but rather shows that Ardent did not take its environmental obligations seriously.
Ardent submitted that the fact that it has no previous convictions is indicative of its good corporate character. It relied upon Mr Bolton's affidavit to show that it was genuinely committed to observing and meeting its environmental responsibilities during the period that it operated the Marina.
Amongst other things, Ardent pointed to the fact that it invested approximately $2.4 million to ameliorate the pre-existing contamination issues at the Marina during the time it was responsible for operating it, notwithstanding the fact that these issues were caused by Ardent's predecessors in title.
Ardent further submitted that in the time since the Incident, it has invested approximately $1.2 million in updating and improving the UPSS at the Marina.
As per the affidavit of Ms Weir, Ardent submitted that it actively engages and gives back to the community. Specifically, Ardent submitted that it:
1. provides financial and non-financial support to a number of charities including Make-A-Wish Foundation and Starlight Children's Foundation;
2. offers Indigenous educational programs at some of its leisure assets; and
3. supports a range of wildlife conservation initiatives and projects both in Australia and overseas.
Ardent submitted that it has demonstrated its contrition and remorse at all times since the Incident both in its actions and words.
Ardent submitted that the Court should take the following into account as indicating the genuineness of Ardent's remorse:
1. its speed and efficiency in implanting clean-up measures to rectify the harm caused and likely to be caused by its offending;
2. its immediate and voluntary reporting of the offences to the EPA and its cooperation with the EPA's clean-up operations;
3. its action to address the cause of the offences; and
4. the appearance of corporate executives, including Ms Weir and Mr Bolton, in Court.
[24]
Measures taken to avoid a recurrence of an incident of this type
I accept and take into account that Ardent took the following measures in the aftermath of the Incident to ensure that it did not happen again:
1. ceasing the 24 hour sale of fuel, limiting sales to within office hours. This meant that any future incident could be identified and actioned quickly;
2. conducting safety meetings with all staff in relation to the operations, maintenance, and response to spills;
3. installing additional "emergency stop" buttons at all sites;
4. updating the pollution response plan at all sites;
5. updating the environmental protection plans at all sites;
6. updating the environmental management systems at all sites;
7. updating the UPSS "as-built" drawings;
8. implementing a new cloud-based document system allowing easy access of all environment related and emergency response documentation to all staff, including training modules;
9. preparing fuel spill response training videos;
10. implementing a BIA Contractor Management System at all sites; and
11. implementing an internal "high risk" works notification and a requirement that the site Manager or Assistant Manager conduct toolbox talk, review SWMS, and observe all high-risk tasks undertaken by contractors.
Further, I accept that Ardent excavated the immediate area above D2 where the spill occurred and removed all fill, to the extent this was practicably possible, in order to circumvent any contamination risks arising from the Incident and that the cost of these works was $40,000 and that Ardent invested approximately $1.2 million in 2016-17 to improve the UPSS at the Marina.
[25]
Specific deterrence
On 15 August 2017, Ardent divested the Marina and ceased its role as operator.
The Prosecutor noted that specific deterrence under s 3A(b) of the Sentencing Act has particular relevance where an offender continues to operate in the same area of operation in which the offence occurred (Environment Protection Authority v Ravensworth Operations Pty Ltd [2012] NSWLEC 222 at [48]). It accepted that specific deterrence has less part to play in the circumstances of Ardent's divestiture of the Marina.
Ardent submitted that having regard to the measures taken to avoid recurrence of the offence, Ardent's divestiture of the Marina, and its acceptance of responsibility for the offence, there is no need for specific deterrence in the present case.
I accept that Ardent has accepted responsibility and has, prior to its divestiture of the Marina, adopted measures to prevent reoccurrence of the conduct that led to the offences and find that specific deterrence has less part to play in the present circumstances.
[26]
General deterrence
The Prosecutor submitted that the sentence of the Court must serve to deter others who conduct activities similar to Ardent's from committing like offences (Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80 ('Sydney Water') at [99]; Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359). The Prosecutor submitted that the offences committed by Ardent highlight the importance of general deterrence in the context of all objectively significant environmental crime.
The Prosecutor further submitted that the penalty in each matter to be imposed on Ardent must serve as a real incentive to other operators to ensure that pollution does not occur, and that it should demonstrate the costs involved in the prevention of pollution will be less than the penalties imposed by the Court if an objectively serious offence is committed.
Ardent accepted that sentencing for offences of this nature must serve the object of general deterrence. However, Ardent submitted that this principle is subject to the qualification that a particular defendant does not shoulder an unfair burden of community education (Waldron v Hensler (1987) 163 CLR 561; [1987] HCA 54 at 570; Environment Protection Authority v Robinson [2004] NSWLEC 629 at [30]; Environment Protection Authority v Davis [2005] NSWLEC 643 at [27]).
Taking the above matters into account, I find there is a need for general deterrence. General deterrence is of primacy in relation to environmental offences and this has been stated in many cases including Cameron v Eurobodalla Shire Council [2006] NSWLEC 47; (2006) 146 LGERA 349 at [71]-[81]; Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [103]-[104]; Burwood Council v Erector Group Pty Ltd; Burwood Council v Liverpool Developing Pty Ltd [2017] NSWLEC 20 at [67]-[69].
It is also well accepted, and I find, that persons will not be deterred from committing environmental offences by only nominal fines (Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234 at [139]-[141], [150]-[151]). The purpose of general deterrence is particularly relevant in the industry in which Ardent operated.
[27]
Totality
Where two offences arise out of the same incident, the totality principle requires consideration. As Preston J stated in EPA v Orica at [142]:
The effect of the totality principle is to require the Court, which has passed a series of sentences, each properly calculated in relation to the offence for which it is imposed, to review the aggregate sentence and consider whether the aggregate is just and appropriate and reflects the total criminality before the Court. In the case of fines, adjustment may be made by reducing the amount of the fine for each offence. Care needs to be taken, however, to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the offender's conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence.
The Prosecutor submitted that there are limits to the totality principle. It noted that in Sydney Water, Preston J at [106]-[112] observed that the boundaries of offences against s 120(1) and s 64(1) of the POEO Act were not drawn so as to be coterminous. The Prosecutor submitted that this case is similar in that regard.
The Prosecutor submitted that both offences with which Ardent is charged are strict liability offences, but the external or physical elements of the offences are different. In the context of an offence against s 120(1), the external or physical element of the offence is the result, that is, the pollution of waters.
In contrast, the Prosecutor submitted that the external or physical element of the UPSS Regulation Offence is the conduct of the offender, namely, its failure to have a compliant EPP. The result of the conduct (for example, the pollution of waters) is not an element of that offence.
The Prosecutor submitted that double jeopardy arises where two or more offences of which an offender is convicted contain common elements. In this case, the Prosecutor submitted that there is no overlap of elements so Ardent will not be punished twice.
Notwithstanding these submissions, the Prosecutor accepted that the objective seriousness of the two offences have some overlapping characteristics, such as a likelihood of harm being caused to the environment. It also accepted that the other relevant matters in s 241(1) of the POEO Act overlap, and submitted that in these circumstances it would be inappropriate to punish Ardent twice for that conduct which overlaps in committing the two offences.
[28]
Appropriate sentence for the offences
In determining the appropriate penalty for the offences, I take into account the objective circumstances of the offences and the subjective circumstances of Ardent, as I have discussed above. Further, I take into account the purposes of sentencing in s 3A of the Sentencing Act. There is a need for the Court, through the sentences it imposes, to ensure that Ardent is adequately punished for offences committed, held accountable for its actions, and denounced for its conduct in a manner which is proportionate to the seriousness of the offences (Environment Protection Authority v Custom Chemicals Pty Ltd [2016] NSWLEC 146 at [110]).
In determining the appropriate penalty, the Court should be consistent with any pattern of sentencing for like offences. The parties referred me to various sentencing decisions of this Court including Waste Recycling, Environment Protection Authority v Nalco Australia Pty Ltd [2007] NSWLEC 831, Environment Protection Authority v Nowra Chemical Manufacturers Pty Ltd [2008] NSWLEC 187, Environment Protection Authority v CSR Building Products Ltd [2008] NSWLEC 224, Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273, Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280; (2008) 163 LGERA 71, Sydney Water, Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65, Environment Protection Authority v Moolarben Coal Operations Pty Ltd (No 2) [2012] NSWLEC 80, EPA v Orica, Environment Protection Authority v Borg Panels [2016] NSWLEC 71 ('Borg Panels'), and Environment Protection Authority v Hunter Water Corporation [2016] NSWLEC 76.
I have had regard to the matters considered and penalties imposed by this Court in those decisions including the analysis of a number of further decisions undertaken in Borg Panels by Pain J at [46] and [47]. Nevertheless, as the parties acknowledged, each case turns upon its particular facts and caution must be exercised in considering other cases because of the "…inevitable disparity between subjective and objective circumstances applicable to those cases, compared to the same circumstances found to exist in this case": Borg Panels per Pain J at [45].
In considering the cases to which I was referred, I am conscious of the statement of French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ in Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 at [54]:
…a history of sentencing can establish a range of sentences that have in fact been imposed. That history does not establish that the range is the correct range, or that the upper or lower limits to the range are the correct upper and lower limits… "Sentencing patterns are, of course, of considerable significance in that they result from the application of the accumulated experience and wisdom of first instance judges and of appellate courts." But the range of sentences that have been imposed in the past does not fix "the boundaries within which future judges must, or even ought, to sentence". Past sentences "are no more than historical statements of what has happened in the past. They can, and should, provide guidance to sentencing judges, and to appellate courts, and stand as a yardstick against which to examine a proposed sentence". When considering past sentences, "it is only by examination of the whole of the circumstances that have given rise to the sentence that 'unifying principles' may be discerned" (citations omitted).
[29]
Orders
The Court makes the following orders:
In proceedings 2017/00145792:
1. Ardent Leisure Ltd is convicted of the offence as charged.
2. Ardent Leisure Ltd is fined the sum of $135,000.
3. Ardent Leisure Ltd, pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 (NSW) ('POEO Act'), is, at its own expense, to place a notice in the form of 'Annexure A' in the following publications:
1. Sydney Morning Herald within the first 10 pages of the General News section at a minimum size of 9cm x 12cm, within 28 days of this order;
2. Australian Financial Review within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
3. Daily Telegraph within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
4. The Australian within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
5. 'Waterline' published by the Marina Industries Association within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
6. 'Logbook' published by the Boating Industry Association within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
1. Ardent Leisure Ltd, pursuant to s 250(1)(a) of the POEO Act, is to provide to the Environment Protection Authority a complete copy of the page of the publications in which the notice appears within 42 days of the date of publication of the notices set out in Order (3).
2. Pursuant to s 248(1) of the POEO Act, Ardent Leisure Ltd is to pay the Environment Protection Authority's investigation costs in the amount of $6,280; and
3. Ardent Leisure Ltd is to pay the Environment Protection Authority's legal costs as agreed or assessed.
In proceedings 2017/00145793:
1. Ardent Leisure Ltd is convicted of the offence as charged.
2. Ardent Leisure Ltd is fined the sum of $22,950.
3. Ardent Leisure Ltd, pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 (NSW) ('POEO Act'), is, at its own expense, to place a notice in the form of 'Annexure A' in the following publications:
1. Sydney Morning Herald within the first 10 pages of the General News section at a minimum size of 9cm x 12cm, within 28 days of this order;
2. Australian Financial Review within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
3. Daily Telegraph within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
4. The Australian within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
5. 'Waterline' published by the Marina Industries Association within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
6. 'Logbook' published by the Boating Industry Association within the first 10 pages at a minimum size of 9cm x 12cm, within 28 days of this order;
1. Ardent Leisure Ltd, pursuant to s 250(1)(a) of the POEO Act, is to provide to the Environment Protection Authority a complete copy of the page of the publications in which the notice appears within 42 days of the date of publication of the notices set out in Order (3); and
2. Ardent Leisure Ltd is to pay the Environment Protection Authority's legal costs as agreed or assessed.
[30]
Addendum made on 10 April 2018
As a result of a request by the defendant to vary the date for compliance with the publication orders relating to publication of notices in each of 'Waterline' and 'Logbook' (which are industry publications published periodically), on 10 April 2018, the above orders were varied by way of further orders made by consent as follows:
1. That in proceedings 00145792 of 2017, Order 3 (e) and (f) be amended to remove the words "within 28 days of this order" and replace with the words "by 30 June 2018".
2. That in proceedings 00145793 of 2017, Order 3 (e) and (f) be amended to remove words "within 28 days of this order" and replace with the words "by 30 June 2018".
[31]
Addendum made on 27 June 2018
As a result of a request by the defendant to vary the date for compliance with the publication orders relating to publication of notices in each of 'Waterline' and 'Logbook' (which are industry publications published periodically), on 27 June 2018, the above orders were varied by way of further orders made by consent as follows:
1. In proceedings 00145792 of 2017:
1. Order 3(e) (as varied by way of further orders made by consent on 10 April 2018) be amended to remove the words "by 30 June 2018" and replace with the words "by 31 July 2018"; and
2. Order 3(f) (as varied by way of further orders made by consent on 10 April 2018) be amended to remove the words "by 30 June 2018" and replace with the words "in the 2018 Winter Edition".
1. In proceedings 00145793 of 2017:
1. Order 3(e) (as varied by way of further orders made by consent on 10 April 2018) be amended to remove the words "by 30 June 2018" and replace with the words "by 31 July 2018"; and
2. Order 3(f) (as varied by way of further orders made by consent on 10 April 2018) be amended to remove the words "by 30 June 2018" and replace with the words "in the 2018 Winter Edition".
[32]
EPA v Ardent Leisure Limited (Annexure A) [2018] NSWLEC 36 (67.7 KB, pdf)
[33]
Amendments
10 April 2018 - Addendum added at par 168.
27 June 2018 - Addendum added at par 169.
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: 27 June 2018
Environment Protection Authority v Robinson [2004] NSWLEC 629
Environment Protection Authority v Snowy Hydro Ltd [2008] NSWLEC 264; (2008) 162 LGERA 273
Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80
Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299
Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189
Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45
Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66
Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57
R v Holder; R v Johnston [1983] 3 NSWLR 245
R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309
Waldron v Hensler (1987) 163 CLR 561; [1987] HCA 54
Category: Sentence
Parties: Environment Protection Authority (Prosecutor)
Ardent Leisure Ltd (ACN 104 529 106) (Defendant)
Representation: Counsel:
S Rushton SC (Prosecutor)
T Howard SC (Defendant)
Petrolink cut the HDPE pipe at a point between the wall of the Work Pit and the ball valve. One of the two Petrolink workers at the site on 17 May 2016, Anthony Bergamin, believed that there may have been residual fuel or water in D2; that it had been disused for several years; that each of ULP1, D1, and D2 had separate delivery lines; that the D2 turbine pump may have been operable because the pump remained attached to electrical services; and that cutting the HDPE pipe at the chosen location would ensure that the ball valve would operate to prevent any material escaping from D2 in the remote contingency that the turbine pump was activated.
After the HDPE pipe was cut, approximately 8 litres of diesel fuel flowed out of it. Petrolink believed this to be residual fuel from the period during which D2 was in use. No pressure was detected in the pipe immediately after it was cut.
During the afternoon of 17 May 2016, Petrolink workers left the Marina with the HDPE pipe severed and without capping or securing it.
At approximately 7.24pm, a member of the public purchased diesel fuel and activated the diesel bowser at the Marina. The use of the bowser activated the turbine pump on D1 causing diesel fuel to flow through the UPSS, including through the severed HDPE pipe.
Until approximately 8pm, diesel flowed out of the severed pipe into the Work Pit, which overflowed onto the promenade hardstand and into the water at Rushcutters Bay. The flow of diesel was stopped either by the completion of the fuel transaction and deactivation of the pump, or by the New South Wales Fire and Rescue Service ('NSWFRS') isolating the main electrical breakers and cutting the electricity supply to the D1 pump at approximately 8pm.
Approximately 6,845 litres of diesel fuel escaped from the cut HDPE pipe. Of this, up to 1,000 litres was captured by the Work Pit. The remainder spilled into Rushcutters Bay.
By virtue of cl 19(10), the person responsible for a storage system commits an offence if the person contravenes (or authorises or permits the contravention of) cl 19 in connection with that system. The maximum penalty prescribed by the legislature for that offence is 200 penalty units for an individual or 400 penalty units for a corporation.
Relying on Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [17]-[19], the Prosecutor submitted that offences which undermine these statutory schemes are objectively serious, and accordingly submitted that the sentence to be imposed must reflect the need to uphold the regulatory schemes established.
Ardent's conduct was contrary to s 3(a), (d)(i) and (ii) of the POEO Act, and what I accept is the purpose of the UPSS Regulation, in that it caused the escape of a significant quantity of diesel fuel into the environment.
I find that Ardent's conduct significantly undermined the legislative objectives and statutory schemes established under both the POEO Act and the UPSS Regulation, and in doing so thwarted the attainment of the objects of the POEO Act and the UPSS Regulation.
The Prosecutor submitted that having regard to all the circumstances and the fact that the pollution of waters by hydocarbons such as diesel fuel can contribute to the gradual deterioration of the environment, Ardent's offences should be "treated seriously".
Ardent accepted that the Water Pollution Offence caused actual harm to the environment. Ardent further accepted that the offence was likely to have caused consequential environmental harm in that it likely caused the death of invertebrates, microalgae, and planktonic and larval organisms. However, Ardent submitted that this effect of the Incident was likely to have been immediate and transient, and not to have caused any long term change in the populations or diversity of populations in respect of those organisms.
Ardent further submitted that there is no evidence of any actual harm or death to fish or seabird species, nor any evidence that the Incident caused actual or likely harm to the Little Penguins. Ardent accepted that the Incident had the potential to cause harm to the Little Penguins.
Ardent acknowledged that the Incident caused a number of yachts to have diesel deposited on their hulls which Ardent cleaned at its own cost.
Ardent submitted a fair reading of the environmental impacts of the Water Pollution Offence would indicate that the extent of harm caused or likely to be caused to the environment was minor, suggesting that the offence is at the "lower or moderate range" of objective seriousness for such offences.
With respect to the UPSS Regulation Offence, Ardent acknowledged that it was a contributing factor to the occurrence of the Water Pollution Offence, but not the only contributing factor. Ardent submitted that apart from this effect, it is not otherwise argued that the UPSS Regulation Offence caused or would have been likely to have caused any environmental harm.
In relation to the Water Pollution Offence, I find that Ardent's conduct caused actual harm and as accepted by Ardent, caused consequential environmental harm in that it likely caused the death of invertebrates, microalgae, and planktonic and larval organisms. It is now well accepted that harmfulness needs to not only be considered in terms of actual harm and that the potential or risk of harm is to be taken into account.
I also find that whilst there is no evidence of any actual harm or death to fish or seabird species, there was the potential to cause harm to the Little Penguins.
In relation to the UPSS Regulation Offence, I accept Ardent's submissions and find that it was a contributing factor to the occurrence of the Water Pollution Offence, but not the only contributing factor.
Ardent submitted that, without detracting from its acceptance of responsibility for the offence which it has maintained at all relevant times, it is proper for the Court to take into account the fact that had Enviropacific Services or Petrolink taken the practicable measures in accordance with industry practice that Mr Moore set out in his affidavits, the Water Pollution Offence would not have occurred.
Mr Moore was relevantly of the opinion that the fact that the D2 delivery pipe was constructed of HDPE (a material used only comparatively recently for that purpose) and the fact that it travelled in the direction of the D1 pipe instead of towards the bowsers should have put Petrolink on notice that work had been conducted on the D2 pipe relatively recently and that there was a chance it was connected to the D1 pipe. He noted that, in his opinion, Enviropacific had failed to properly decommission D2, and further that Petrolink had not acted reasonably in failing to investigate whether the D2 line was connected to the D1 line and in leaving the severed HDPE pipe uncapped overnight.
Ardent submitted that s 241(1)(b) calls for consideration of the steps taken to clean up the pollution, and the efficacy of the response. In this regard, Ardent submitted that the majority of the diesel was cleaned up within three days, that it cooperated effectively with the EPA and NSWPA, and that it incurred costs of approximately $168,000 in the course of carrying out the clean-up works.
Contrary to Ardent's position, I am of the view that s 241(1)(b) of the POEO Act, on its plain reading, relates to the circumstances before the commission of the offences. As such I am satisfied that there were clearly practical measures as submitted by the Prosecutor such that Ardent could have prepared accurate "as-built" drawings, and it could have supplied them to Petrolink. Despite this, I accept Ardent's position that it is appropriate to take into account, to a limited extent, the conduct of others, moreover Enviropacific Services and/or Petrolink, who, if they had undertaken practical measures in accordance with industry practice, may have prevented the Water Pollution Offence.
Further, I accept that Ardent has, since the commission of the offences, taken certain practical measures to prevent the offences from being repeated, some of which are considered below. However, I do not consider those matters relevant to s 241(b) of the POEO Act.
Ardent conceded that Cardno Lane Piper recommended updated "as-built" drawings of the UPSS be prepared.
While intention is not an element of strict liability offences such as the offences the subject of these proceedings, an offence that is committed intentionally, negligently or recklessly will be objectively more serious than one not so committed, see Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [42].
I find that Ardent was aware that it was unlawful to operate the Marina without "as-built" drawings as required in the EPP. Further, it was aware of this obligation for some period of time and even when the 2012 EPP was produced the diagrams were not compliant. Further advice was received from Cardno Lane Piper as submitted by the Prosecutor, and the further Plan produced by Mr Silk in November 2014 was not an "as-built" drawing.
Although there is some force in the Prosecutor's submissions that the employee in charge of workplace and environmental safety for all of Ardent's marinas apparently had insufficient time to attend to Ardent's environmental obligations at the site, I am not satisfied beyond a reasonable doubt that the UPSS Regulation Offence was committed deliberately. Despite this, it is clear that Ardent was aware that Cardno Lane Piper had recommended updated "as-built" drawings of the UPSS be prepared and there was scant evidence as to why this was not undertaken.
Ardent submitted that having regard to the above, the Court would be satisfied that it is of good character and is genuinely contrite for the commission of the offences. In those circumstances, Ardent submitted it should be accorded a significant discount.
I find the conduct of Ardent as demonstrated by the matters noted above are indicative of "taking actions" rather than offering "smooth apologies" in the sense considered by Preston CJ of LEC in Waste Recycling at [203]. I also accept that Ardent undertook clean up measures relatively quickly and it voluntarily reported the offences to the EPA and thereafter cooperated.
Despite this, I have a remaining concern as to Ardent's view of its environmental obligations particularly in regard to its inaction in relation to the Cardno Lane Piper recommendations (in the 2012 EPP) that "as-built" drawings of the UPSS be prepared. Further, I have concern in relation to the relatively infrequent attendances by Ardent's employee who was responsible for overseeing Ardent's compliance with its environmental responsibilities. However, I take into account Ardent's not insignificant investment in relation to attending to pre-existing contamination at the site and its conduct since the time of the Incident. I also take into account that Ardent does not have any prior offences and there has been expression of contrition for the commission of the offences and accept that Ardent has now taken responsibility for its actions and has acknowledged the harm caused.
Ardent submitted that the Court should carefully consider the application of the totality principle in this case to avoid the real possibility of double punishment being imposed.
Ardent accepted the UPSS Regulation Offence fell in the higher range of objective seriousness for that offence for the reason that it contributed to the Water Pollution Offence. That acceptance was on the basis that the failure to provide Petrolink with accurate "as-built" drawings was a contributing factor to the Water Pollution Offence occurring.
Ardent submitted that therein lay the risk of double punishment in that, insofar as the Court takes into account that the causal nexus with the Water Pollution Offence is an aggravating circumstance in the UPSS Regulation Offence, it should avoid duplicating that punishment in the imposition of a penalty for the Water Pollution Offence.
Apart from the comments of Preston J extracted at [143] above, the relevant principles relating to totality were considered by Street CJ in R v Holder; R v Johnston [1983] 3 NSWLR 245 at 260 as follows:
…The principle of totality is a convenient phrase, descriptive of the significant practical consideration confronting a sentencing judge when sentencing for two or more offences. Not infrequently a straight-forward arithmetical addition of sentences appropriate for each individual offence considered separately will arrive at an ultimate aggregate that exceeds what is called for in the whole of the circumstances. In such a situation the sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences. The effect of this practical consideration is always to produce an ultimate aggregate which is less than that which would be arrived at by a straightforward adding up of the terms appropriate for the offences if each were viewed alone. In carrying out this process of adjustment, it is both inevitable as well as proper that the ultimate decision be arrived at in the light of the totality of the criminality involved in all of the offences…
I accept, as submitted by the Prosecutor, that while both offences with which Ardent is charged are strict liability offences, the physical elements of the offences are different. Although there is little overlap of "elements", the objective seriousness of the two offences have some overlapping characteristics as noted above. In accordance with the principles discussed in Pearce v The Queen (1998) 194 CLR 610; [1998] HCA 57 at [40] and [120], Ardent should not be punished twice for commission of characteristics of the offences that are in common. Accordingly, although in the current case the offences only share common characteristics rather than "elements" in the strict sense, I am satisfied that it is appropriate to apply the totality principle to reduce the sentence otherwise applicable.
I am also conscious of the fact that the two offences with which Ardent is charged, although they have largely been dealt with together, are distinct and the Court must impose a separate penalty in each.
I note that Ardent submitted the total discount I apply to the penalties can exceed the 25% for the utilitarian value of the early plea. In this case, Ardent submitted it should receive a 35% discount for the early plea and all of the subjective circumstances. In Dyno Nobel Asia Pacific Pty Ltd v Environment Protection Authority [2017] NSWCCA 302, Simpson JA, with whom Hulme and Wilson JJ agreed at [35], cautioned against such an approach without deciding the matter:
…It may be that this approach discloses error of the kind described as a "two-stage approach" to sentencing: see Wong v The Queen; Leung v The Queen (2001) 207 CLR 584; [2001] HCA 64; Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [37], but no complaint to this effect was made by either party…
The approach I adopt is to take into account the subjective circumstances in the instinctive synthesis approach, and limit the discount percentage to the utilitarian value of the plea.
Adopting an instinctive synthesis approach, considering all the relevant objective and subjective circumstances, the purposes of sentencing, and the harm resulting from each offence, I find the appropriate starting points are $200,000 for the Water Pollution Offence and $34,000 for the UPSS Regulation Offence. Each amount should be reduced for the utilitarian value of the early pleas of guilty which I have assessed at 25%. This results in the monetary penalty of $150,000 for the Water Pollution Offence and $25,500 for the UPSS Regulation Offence.
However, I consider that the aggregate of the amount of the fines of $175,500 exceeds what is just and appropriate in the circumstances, and the total criminality involved for the offences. I consider the appropriate adjustment to remove the extent of the double punishment, is to reduce each penalty by 10%. Accordingly, the fine imposed for the Water Pollution Offence is $135,000 and the fine imposed for the UPSS Regulation Offence is $22,950.
The Prosecutor also seeks an order for costs as agreed or assessed, pursuant to s 257B of the Criminal Procedure Act 1996 (NSW). In the Water Pollution Offence, the Prosecutor also seeks an order pursuant to s 248(1) of the POEO Act for reimbursement of its investigative costs in the sum of $6,280.
Additionally, the Prosecutor seeks an order under s 250(1)(a) of the POEO Act that Ardent be required to place a notice of the offences, convictions and fines imposed in a number of publications and that the notice would have a minimum size of 9cm x 12cm and be printed in the first 5 pages of the following publications: the Sydney Morning Herald, the Australian Financial Review, the Daily Telegraph, the Australian, 'Waterline' a publication produced by the Marina Industries Association, and 'Logbook' published by the Boating Industries Association.
Whilst accepting that a publication notice was appropriate, Ardent suggested amended wording and contended that the publication should be within the first 10 pages of only the Sydney Morning Herald and 'Waterline'.
Publicising the prosecution and punishment of environmental offenders improves the effectiveness of general deterrence by bringing broader attention to the consequences of such conduct (Waste Recycling at [242]). Accordingly, I find that it is appropriate in the circumstances to make a publication order generally in the form that was sought, however I have made some minor changes to the terms of the notice proposed by each of the parties. I also find that in the circumstances of this case, the appropriate publications in which the notice is to appear are: the Sydney Morning Herald, the Australian Financial Review, the Daily Telegraph, the Australian, 'Waterline' and 'Logbook'.