Environment Protection Authority v Australand Holdings Ltd

ENVIRONMENT PROTECTION AUTHORITY Prosecutor v AUSTRALAND HOLDINGS LTD Defendant

The defendant, Australand Holdings Ltd, has pleaded guilty to two offences against the Environmental Offences and Penalties Act 1989 ("the EOP Act"). The charges allege that, on or about 8 May 1998 and on or about 18 May 1998, the defendant polluted waters contrary to s 16(1) of the Clean Waters Act 1970. The waters are particularised as Tarban Creek.

The pleas of guilty carry with them admission of the essential legal ingredients of the offences ( R v O'Neill (1979) 2 NSWLR 582 at 588) and consequently the Court is concerned only with the determination of penalties and costs.

By leave, both prosecutions were heard together, and, in the presentation of the case to the Court, the parties filed an agreed statement of facts and attachments, from which I have derived the findings that I have made.

The defendant is the owner of part of the former Gladesville Hospital site at Huntley's Cove, Victoria Road, Gladesville ("the site"). The site is on a rise and slopes down towards public open space, which is a large grassed playing field. The playing field is approximately 100 m wide and is situated between the site and Tarban Creek.

Pursuant to a development consent granted to it on 17 March 1997, the defendant has been engaged in the construction of a large residential development upon the site. To that end, it entered into a contract with Daracon Engineering Pty Ltd ("Daracon") to carry out civil infrastructure works, comprising generally roadways, earthworks, stormwater drainage and sediment control ("the civil works"). It was the responsibility of Daracon to ensure that sediment and erosion control devices were in place and maintained throughout construction. The defendant also engaged Gutteridge Haskins & Davey Pty Ltd ("GHD") through Dr I Joliffe to provide specialist expertise on soil and water management on the site, and, as well, to supervise and give instructions in relation to the carrying out of the civil works. In particular, GHD undertook responsibility for the design of stormwater drainage and erosion control measures.

Part of the water quality management procedures which were approved was the construction of a permanent sediment pond on the playing field where water run-off would be treated to remove suspended solids and other pollutants prior to its discharge into Tarban Creek. However, Hunters Hill Council ("the council") informed the defendant that the permanent pond could not be approved until the land which comprised the playing field was rezoned. Accordingly, the defendant agreed that it would, in consultation with the council, design and construct a temporary sediment pond on the site, which it would operate until the permanent pond was constructed.

The civil works commenced on the site about 23 June 1997, and the temporary pond was completed in August 1997. On 30 March 1998, approval to construct the permanent pond was granted, and on 2 April 1998, Daracon commenced construction under the supervision of GHD. Although it was intended that the construction of the permanent pond would be completed within three weeks, its construction was delayed by rain, and it was not actually completed until late June 1998.

The permanent pond is a large basin, with an embankment on the Tarban Creek side. At the base of the permanent pond, near to the embankment, is a pit with a grate covering it (grate A) leading to an underground pipeline. The underground pipeline travels underneath the embankment and continues until it reaches Tarban Creek. On the Tarban Creek side of the embankment, there is another pit with a grate (grate B). It was intended that a riser would be constructed where grate A is situated, so that it would collect water from the top of the permanent pond once the water had reached a certain level. The intention was that, during the construction phase of the development, water would be collected in the permanent pond. Sediment would settle out of the water and sink to the base of the permanent pond, with the result that water near the surface of the pond would be clearer and its sediment and matter load would be reduced. The clearer water could be discharged into Tarban Creek. During the construction period, and after significant rain periods, the water contained in the permanent pond was to be flocculated to settle fine sediments. After construction of the development was complete, it was intended to convert the permanent pond to a gross pollutant trap with the same function of treating sediment before water was discharged via the riser and through the underground pipeline to Tarban Creek.

The temporary pond is constructed at a higher level than the permanent pond. It was also smaller, given the limited amount of land available on the site.

On 5 May 1998, it was raining. Mr A Hawkins, an officer of the prosecutor, and Mr S Hovian, an officer of the council, were at the site on that day. Mr Hawkins and Mr Hovian observed sediment laden water discharging from a pipe into Tarban Creek. They then went to the permanent pond where they met Mr Whitting, the project manager of the defendant, as well as two GHD employees. They observed water containing sediment had accumulated in the permanent pond, and it was flowing over and around a line of hay bales which were staked with steel posts to the basin floor. The water was then exiting from the basin via grate A into the underground pipeline leading to Tarban Creek.

Mr Hawkins advised those present that sediment laden water could not be allowed to flow straight into Tarban Creek, and he advised the blocking of the entrance to the underground pipe. He said: "That way, the water will flow over the grassed playing field and hopefully some of the sediment will settle into the grass and not enter the creek (sic)" . It was agreed to block the underground pipeline at grate B, and later in the day, Mr Hawkins observed that this had been done, and hay bales staked with steel posts had been placed in a semicircle beyond the embankment a few metres from grate B.

On the morning of 8 May 1998, which was fine, Mr Whitting attended the site and saw that employees of Daracon were pumping water from the temporary pond into the permanent pond, a procedure which had not been authorised and of which he informed GHD at once. At that time, the riser at grate A had not been installed.

Later that same morning, Mr Hawkins observed a large brown plume of sediment in Tarban Creek. What had occurred was that sediment laden water pumped from the temporary pond into the permanent pond had gone through grate A into the underground pipeline. As the underground pipeline had been blocked at grate B, the water containing sediment had come up through grate B, flowed around the semicircle of hay bales and over the playing field, and thence over the footpath and the seawall into Tarban Creek.

Three samples of water were taken on that day. The first sample, taken from the water flowing over the seawall, contained upon analysis 1300 mg/I of total suspended solids and 1600 NTU of turbidity. The second sample, taken from the water flowing into grate A, contained 1400 mg/I of total suspended solids, and 1600 NTU of turbidity. The third sample, taken from the pool of water over grate B, contained 1800 mg/I of total suspended solids and 1700 NTU of turbidity.

Rainfall records attached to the agreed statement of facts revealed that, over the four days between 2 May 1998 and 6 May 1998, a total of 96.5 mm of rain were recorded at Gladesville Bowling Club but no rainfall was actually recorded for 8 May 1998.

On 15 May 1998, Mr Hawkins went to Tarban Creek with other officers of the prosecutor. There was a covering of sediment on the seabed of Tarban Creek and samples were taken.

Mr Hawkins had a conversation with an employee of GHD, who said that he did not think that any flocculation of the water had been done, but he indicated that a permanent riser was being installed.

On this day, Mr Hawkins went to the site when it was raining, and observed a large brown plume of water containing sediment in Tarban Creek.

Water containing sediment was flowing from the permanent pond through the wall of the riser which had by then been constructed where grate A had previously been. The water had flowed into the underground pipeline, up through grate B, around the semicircle of hay bales, over the playing field and over the footpath and seawall into Tarban Creek. The leak from the riser occurred because the concrete used in its construction had not been able to set properly due to the rainy conditions.

Again, samples of the water were taken. The first sample, taken from the water in the permanent pond next to the riser, contained 1700 mg/I of total suspended solids, and 1600 NTU of turbidity. A second sample, taken from a pool of water over grate B, contained 2300 mg/I of total suspended solids and 1900 NTU of turbidity. The third sample, taken from the water flowing over the seawall, contained 1500 mg/I of total suspended solids, and 1600 NTU of turbidity.

The rainfall records for the Gladesville Bowling Club indicated that on 18 May 1998, 18.5 mm of rainfall had been recorded.

Section 241 of the Protection of the Environment Operations Act 1997 ("the POEO Act") sets out certain matters which the Court is required to take into account in imposing a penalty. The reason that s 241 applies is as follows. Although the offences in this case were committed against the EOP Act, which was repealed by s 324 of the POEO Act, any liability incurred under the EOP Act is not affected by such repeal (s 30(1)(c) of the Interpretation Act 1987). Furthermore, cl 17 of the Protection of the Environment Operations (Savings and Transitional) Regulation 1998 provides that pt 8.2 of the POEO Act extends to proceedings in connection with the EOP Act (amongst others) in respect of offences committed against them, and pt 8.2 applies with such modifications as are necessary for that purpose. Section 241 of the POEO Act is to be found in pt 8.2 (but it is in any event almost identical to s 9 of the EOP Act) and must accordingly be taken into account. I deal therefore with each separate paragraph of s 241 as follows:

(a) The extent of the harm caused or likely to be caused to the environment by the commission of the offence:

The agreed statement of facts referred to the opinion of Ms M Doherty, who is a senior environmental scientist in the employ of the prosecutor. She considered that the samples taken on each occasion from the water at the seawall (1300 mg/l and 1500 mg/l respectively and 1600 NTU) demonstrated very high levels of suspended solids and turbidity in the water leaving the site. Although these levels of suspended solids and turbidity would be reduced because the discharging water would be diluted when discharged into receiving waters, Ms Doherty was of the opinion that "… the discharges would have produced some reduction in biological activity and the mortality of some aquatic organisms in the receiving waters" . I find, therefore, that there was a likelihood of environmental harm.

The dictionary to the POEO Act defines "harm" to the environment as including "… any direct or indirect alteration of the environment that has the effect of degrading the environment …". On the occasion of the first incident, Mr Hawkins observed a brown plume of water containing sediment in Tarban Creek, which was approximately 30 m wide and 50 m long. On the occasion of the second incident, Mr Hawkins also observed a brown plume of water containing sediment in Tarban Creek, this time approximately 50 m long and 50 m wide. I find therefore that there was actual harm to the environment as a consequence of each incident, in that the water in, and visual aspect, of Tarban Creek was degraded on each occasion.

(b) The practical measures that may be taken to prevent, control, abate or mitigate that harm:

I find that there were common factors partially responsible for the discharge of water into Tarban Creek which occurred on each occasion - first, major earthworks were in progress, secondly, there was a period of heavy rainfall, thirdly, the temporary pond was insufficient for the purpose of holding the sediment laden water, and, fourthly, the permanent pond had not been completed.

In addition to these common factors, there were other contributing factors on each occasion. On the occasion of the first incident, Daracon pumped sediment laden water from the temporary pond to the permanent pond. On the occasion of the second incident, the riser leaked, apparently because the concrete used in its construction had not set.

Nevertheless, some practical pollution control measures had been taken. The temporary pond had been designed and constructed with appropriate approval. The underground pipe had been blocked as Mr Hawkins had suggested and hay bales had been placed around the permanent pond structure.

However, a practical measure which could have been taken was to avoid pumping water from the temporary pond to the permanent pond when the latter was in an incomplete state. I take into account, however, that this action was unauthorised by the defendant, and it instructed GHD to inform Daracon that no such action should be taken in the future.

There is also the matter of flocculation of water in the temporary pond. On 31 March 1998, GHD wrote to the council confirming that the temporary pond was to be flocculated prior to pumping out, but it appears that no flocculation had been carried out.

I reject as impractical any suggestion that the major earthworks should have been halted prior to the rainfall events, or should not have been started in the first place. But once major earthworks were scheduled, there was a real risk of a discharge of sediment laden water. The defendant recognised that risk, but its efforts were inadequate to prevent the pollution which occurred on the two occasions.

(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:

There is no doubt that the harm caused or likely to be caused to the environment was foreseeable on each occasion. The permanent pond was designed because it was foreseeable that, if rain occurred and earthworks were in progress, environmental harm was likely to occur. When the construction of the permanent pond was delayed, because rezoning of the land was required, the temporary pond was constructed for the same purpose.

(d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence:

The defendant, by its plea of guilty to each offence, has accepted responsibility for the causes which gave rise to each offence, and it is not in dispute that it took an active role in the carrying out of the civil works on the site. I take into account that it had engaged Daracon to carry out the civil works, under the supervision of GHD, but it had primary responsibility for the environmental management of the site. That is evidenced by the regular inspections which Mr Whitting carried out, and the instructions which he gave. An example of such instructions is a fax dated 8 May 1998, after the first incident, in which he instructed GHD to ensure that Daracon attended immediately to completion of the permanent pond.

I take into account the following matters in mitigation:

(1) The defendant pleaded guilty to both offences at an early stage in the proceedings. (2) The defendant asserts, and the prosecutor concedes, that the defendant and its contractors, Daracon and GHD, co-operated with the prosecutor in relation to the prosecution, by providing information and participating in interviews with officers of the prosecutor; (3) The defendant has no prior conviction for any environmental offence; (4) The defendant has agreed to pay the prosecutor's costs in the amount of $12,500.

The maximum penalty prescribed for each offence is $125,000.

In considering the appropriate penalties to be imposed, I have taken into account that, although the two offences occurred ten days apart, they were connected in the sense that they arose out of the failure on each occasion of the temporary and permanent ponds to control pollution in accordance with the purpose for which they were constructed. I have accordingly applied the totality principle (outlined by the Court of Criminal Appeal in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 82 LGERA 21 at 41 - 42) that is, I have endeavoured to evaluate the overall criminality of the two offences to achieve an appropriate relativity between that criminality and the two penalties.

I regard the offences as serious, in that aquatic life was likely to be affected, and there was actual degradation of Tarban Creek. But I consider that the seriousness of the offences is mitigated by the following factors. First, the defendant was conscious of its environmental responsibilities, and it took some steps to comply with its obligations in that regard, although the steps it took were inadequate to prevent pollution. Secondly, the defendant was not in total control of the circumstances in which the pollution occurred, since it had to rely to some extent on Daracon and GHD. Thirdly, heavy rainfall was a factor in preventing the complete construction of the permanent pond, and in exacerbating the risk of pollution.

Taking into account these matters, as well as the matters prescribed by s 241 and the other matters in mitigation which I have outlined, I consider that a total penalty of $15,000 should be imposed, to reflect the overall criminality of the two offences. I propose, therefore, to impose a penalty of $10,000 for the first offence, and a penalty of $5,000 for the second offence.

(1) In relation to proceedings No 50028 of 1999, the defendant is convicted and fined the sum of $10,000 to be paid to the Registrar of the Court within one month of today's date; (2) In relation to proceedings No 50029 of 1999, the defendant is convicted and fined the sum of $5,000 to be paid to the Registrar of the Court within one month of today's date; (3) The defendant must pay to the prosecutor its costs of both proceedings in the amount of $12,500. (4) The exhibits may 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.

(3) The defendant must pay to the prosecutor its costs of both proceedings in the amount of $12,500.