(2006) 145 LGERA 234
Cameron v The Queen [2002] HCA 6
(2008) 163 LGERA 71
Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278
(2014) 206 LGERA 239
Environment Protection Authority v Richardson
(2006) 145 LGERA 189
Green v R [2022] NSWCCA 230
Green v The Queen [2011] HCA 49
Source
Original judgment source is linked above.
Catchwords
(2006) 145 LGERA 234
Cameron v The Queen [2002] HCA 6(2008) 163 LGERA 71
Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278(2014) 206 LGERA 239
Environment Protection Authority v Richardson(2006) 145 LGERA 189
Green v R [2022] NSWCCA 230
Green v The Queen [2011] HCA 49(2011) 244 CLR 462
Hoare v The Queen [1989] HCA 33(1989) 167 CLR 348
Markarian v The Queen [2005] HCA 25(2005) 228 CLR 357
Muldrock v The Queen [2011] HCA 39(1999) 199 CLR 270
R v Oliver (1980) 7 A Crim R 174
R v Rice [2004] NSWCCA 384
R v Sharma [2002] NSWCCA 142(2002) 54 NSWLR 300
R v ThomsonR v Houlton [2000] NSWCCA 309(2000) 49 NSWLR 383
R v Visconti [1982] 2 NSWLR 104
R v Way [2004] NSWCCA 131(2004) 60 NSWLR 168
Secretary, Department of Planning and Environment v SingTel Optus Pty Ltd [2019] NSWLEC 44
The Queen v De Simoni [1981] HCA 31(1981) 147 CLR 383
Veen v The Queen (No 2) [1988] HCA 14(1988) 164 CLR 465
Walden v Hensler [1987] HCA 54
Judgment (237 paragraphs)
[1]
on Authority v Carbon MF Pty Ltd; Environment Protection Authority v Fair [2023] NSWLEC 120
Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58
Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90
Environment Protection Authority v Edward Gilder [2018] NSWLEC 119
Environment Protection Authority v Eveston (No 3) [2022] NSWLEC 128
Environment Protection Authority v MA Roche Group Pty Ltd [2015] NSWLEC 29
Environment Protection Authority v Maules Creek Coal Pty Ltd [2022] NSWLEC 33
Environment Protection Authority v Minto Recycling Pty Ltd [2019] NSWLEC 193
Environment Protection Authority v Mouawad (No 2); Environment Protection Authority v Aussie Earthmovers Pty Ltd (No 3) [2020] NSWLEC 166
Environment Protection Authority v Nath [2024] NSWLEC 10
Environment Protection Authority v Obaid [2005] NSWLEC 171
Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239
Environment Protection Authority v Richardson;
Environment Protection Authority v Ridley AgriProducts Pty Ltd [2019] NSWLEC 119
Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100
Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299
Environment Protection Authority v Wollondilly Abattoirs Pty Ltd & Davis [2019] NSWCCA 312
Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189
Green v R [2022] NSWCCA 230
Green v The Queen [2011] HCA 49; (2011) 244 CLR 462
Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348
Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
Natural Resources Access Regulator v Lidokew Pty Ltd [2024] NSWLEC 59
Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66
Porter v R [2008] NSWCCA 145
Postiglione v The Queen (1996) 189 CLR 295; [1997] HCA 26
R v Abboud [2005] NSWCCA 251
R v Bredal [2024] NSWCCA 75
R v Dodd (1991) 57 A Crim R 349
R v MAK & MSK [2006] NSWCCA 381
R v McNaughton (2006) 66 NSWLR 566
R v Nichols (1991) 57 A Crim R 391
R v Olbrich [1999] HCA 54; (1999) 199 CLR 270
R v Oliver (1980) 7 A Crim R 174
R v Rice [2004] NSWCCA 384
R v Sharma [2002] NSWCCA 142; (2002) 54 NSWLR 300
R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
R v Visconti [1982] 2 NSWLR 104
R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168
Secretary, Department of Planning and Environment v SingTel Optus Pty Ltd [2019] NSWLEC 44
The Queen v De Simoni [1981] HCA 31; (1981) 147 CLR 383
Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465
Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561
Category: Sentence
Parties: Environment Protection Authority (Prosecutor)
BSV Tyre Recycling Australia Pty Ltd (Defendant)
Representation: Counsel:
P Zivkovic (Prosecutor)
P Lange (Defendant)
[2]
Solicitors:
Litigation Branch, Environment Protection Authority (Prosecutor)
One Group Legal (Defendant)
File Number(s): 2023/100401-10
Publication restriction: Nil
[3]
BSV Tyre Recycling Australia Pty Ltd Pleads Guilty to Ten Offences of Breach of Licence Offences
The defendant, BSV Tyre Recycling Australia Pty Ltd ("BSV"), has pleaded guilty to ten offences against s 64(1) of the Protection of the Environment Operations Act 1997 ("the POEOA"), insofar as it was the holder of Environmental Protection Licence No 20387 ("licence"), the following conditions of which were contravened:
1. on 30 March 2022 approximately 318.9 tonnes of waste tyres were stored on the premises, in contravention of condition L2.2 of the licence ("the exceedance offence");
2. on 30 March 2022 the height of waste tyres stored at the premises was approximately 4.8 m in height above ground level, in contravention of condition L2.3 of the licence ("the height offence");
3. on 30 March, 10 May, 31 May and 26 July 2022, waste tyres were stored "tread-up", contrary to Pt 4 of the NSW Fire Brigades Guidelines for Bulk Storage of Rubber Tyres Policy No 2 ("the Fire Brigade Policy"), in contravention of condition O4.1 of the licence ("the tread-up offences"); and
4. on 30 March, 10 May, 31 May and 26 July 2022, waste tyres were stored in locations on the premises which were not identified in Figure 5 in the report prepared for BSV by MRA Consulting, dated December 2014 ("MRA report"), in contravention of condition O4.2 of the licence ("the storage offences").
The relevant statutory provision creating the offences is:
64 Failure to comply with condition
(1) Offence If any condition of a EPL is contravened by any person, each holder of the EPL is guilty of an offence. Maximum penalty -
(a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or
(b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
[4]
BSV Operates a Waste Tyre Recycling Facility
BSV was formed in 2013 by directors Virendra Nath, Haissam Hamdan and Zhongbo Chang.
In 2013 BSV commenced operation of a waste tyre facility at 30 Daisy Street, Revesby ("the premises") pursuant to development consent DA-843/2013. At all relevant times BSV occupied, but did not own, the premises.
In 2019 Chang ceased being a director of BSV. Nath and Hamdan remained directors of BSV.
[5]
The Licence
BSV was the holder of the licence and was aware of the conditions attached to it. The licence authorised the carrying out of the scheduled activities of resource recovery and waste storage, both relating to waste tyres, at the premises. The operative conditions of the licence for present purposes are as follows:
Condition L2.2: The authorised amount of waste (processed and unprocessed) permitted on the Premises cannot exceed 150 tonnes at any one time.
Condition L2.3: The maximum height of any processed or unprocessed waste tyres stored at the Premises cannot exceed 3.7 metres in height above ground level.
Condition O4.1: All waste tyres must be stored in accordance with the NSW Fire Brigades Guidelines for Bulk Storage of Rubber Tyres Policy No. 2.
Condition O4.2: All waste tyres must be stored in accordance with Figure 5 - (Site Plan showing location of tyres storage areas and facility gates) in the report compiled by MRA Consulting on Behalf of BSV dated December 2014.
In relation to condition O4.1, the relevant extract from the Fire Brigade Policy indicated that the storage of tyres "tread-up" was not acceptable, whereas tyres stacked outdoors in a lace arrangement was.
In relation to condition O4.2, Figure 5 from the MRA Report is a site plan of the premises showing the permitted location of tyre storage areas and facility gas:
[6]
BSV's Business and Operations
BSV's business involved receiving waste tyres at the premises and processing them into bailed tyres, shredded tyres, and crumb rubber ("waste tyre products"). BSV dealt with its waste tyre products by:
1. exporting bailed tyres to overseas markets until the export of these tyres was banned;
2. exporting shredded tyres to overseas markets; and
3. selling crumb rubber to the domestic market.
The day-to-day management of BSV operated in this manner:
1. Nath was in charge of administration in the office and, due to the nature of his role, he was also in the outdoor yard of the premises daily. Nath also spent his time in an office at the premises and regularly communicated with the Environment Protection Authority ("EPA") regarding compliance. Nath met every Friday with Hamdan and Peter Koufelos regarding the storage of waste tyres and waste tyre products on the premises;
2. Hamdan was in charge of logistics until he ceased to be actively involved with BSV sometime between January and July 2022. Hamdan's role primarily consisted of sourcing waste tyres and waste tyre products and driving, or instructing others to drive, waste tyres and waste tyre products to the premises. He did not spend time in the office at the premises or perform any administrative work. Hamdan brought tyres to the premises outside of hours and on weekends, but did not always weigh the tyres using BSV's weighbridge. Sometimes Hamdan collected cash in exchange for taking tyres to the premises;
3. Neetika Bhargava was an administration officer at BSV. Bhargava worked under the direction of both Nath and Koufelos;
4. Koufelos operated machines to process tyres and drove trucks to pick up tyres to bring them back to the premises. Koufelos was described as a "supervisor" by Bhargava. Koufelos was instructed by Nath in respect of the storage of tyres at the premises. He took instructions from both Nath and Hamdan until Hamdan ceased working at BSV. Koufelos did not always follow those instructions and occasionally brought tyres to the premises even after he had been told not to; and
5. Raymon Mousa drove trucks to pick up tyres to bring back to the premises. Mousa collected cash for tyres to be brought to the premises and gave the cash to Hamdan.
In terms of environmental compliance, Nath instructed BSV staff that:
1. BSV was limited to having 150 tonnes of tyre waste on the premises at any time and to not overfill the yard;
2. stockpiles of tyres had to be below 3.7 m; and
3. BSV was required to comply with storage requirements for waste tyres pursuant to the licence.
[7]
The Regulation of the Export of Waste Tyres
In March 2020 the Council of Australia Governments agreed to establish a ban on the export of waste. The ban included waste tyres.
In 2021 the Commonwealth announced that it intended to ban the export of whole-baled waste tyres.
In October 2021 the Recycling and Waste Reduction (Export-Waste Tyres) Rules 2021 (Cth) ("the Export-Waste Tyres Rules") were made under the Recycling and Waste Reduction Act 2020 (Cth). Among other things, the Export-Waste Tyres Rules required exporters of waste tyres to hold a waste export licence.
Between October and November 2021, BSV applied for a waste export licence.
In December 2021 the export of whole-baled waste tyres ("tyre export ban") was banned by the Export-Waste Tyre Rules. As a result of the tyre export ban, the following waste tyres could only be exported under a waste export licence:
1. tyres that had been processed into shreds or crumbs of not more than 150 mm for use as tyre derived fuel;
2. tyres for retread by an appropriate retreading facility, for example, a facility that is verified by Tyre Stewardship Australia's Foreign End Market program;
3. tyres to an appropriate importer for re-use as a second-hand tyre on a vehicle; and
4. tyres that had been processed into shreds, crumbs (when the shred or crumb is not for use as tyre derived fuel), buffings or granules.
In June 2022 BSV obtained a waste export licence to export crumb rubber and shredded tyres.
[8]
Machinery Breakdown At BSV
On 30 March 2022 BSV's tyre shredding machine broke down for a period of three months. As a consequence waste tyres at the premises could not be processed for export.
[9]
EPA Investigations of the Premises
The EPA investigation involved four inspections of the premises on 30 March, 10 May, 31 May and 26 July 2022.
In relation to the exceedance offence, on 30 March 2022 approximately 318.9 tonnes of waste tyres and waste tyre products were observed on the premises in contravention of condition L2.2 of the licence. This was rectified by the time of the EPA's inspection on 10 May 2022.
In relation to the height offence, on 30 March 2022 the EPA found waste tyres and waste tyre products stored approximately 4.8 m above ground level between the western covered area and the eastern covered area of the premises in contravention of condition L2.3 of the licence. This had also been remediated by the time of the EPA's inspection on 10 May 2022.
In respect of the tread-up offences, on 30 March 2022 EPA officers observed tyres at the premises stored "tread-up" between the western covered area and the eastern covered area in contravention of condition O4.1 of the licence. This was not rectified by the time of the EPA's inspection on 10 May 2022.
During the EPA's inspection on 31 May 2022, EPA officers found tyres stored "tread-up" only within and around the eastern covered area of the premises.
On 26 July 2022, the EPA found that the tyres that were stored "tread-up" between the western covered area and the eastern covered area, as well as within and around the eastern covered area of the premises.
In relation to the storage offences, on 30 March 2022 tyres were found being stored on the premises contrary to Figure 5 of the MRA Report in contravention of condition O4.2 of the licence. This storage remained as at the EPA's inspections on 10 May, 31 May and 26 July 2022.
[10]
Efforts to Bring the Premises into Compliance with the Licence
On 8 April 2022 the EPA issued a Prevention Notice to BSV pursuant to s 96 of the POEOA. The Prevention Notice required BSV to, among other things, reduce the amount of waste tyres and waste tyre products on the premises to no more than 150 tonnes in order to bring BSV into compliance with condition L2.2 of the licence.
On 15 August 2022 BSV entered into voluntary administration.
On 20 October 2022 Starcorp Recycling Pty Ltd ("Starcorp") entered into a Deed of Company Arrangement ("the Deed") with BSV and the administrator, whereby Starcorp paid $1,250,000 into a fund for the administrator of BSV to apply, amongst other things, to discharge BSV's debts. The Deed required the existing shareholders to relinquish their shareholding in BSV in favour of Starcorp, which became the sole shareholder on 1 November 2023.
On 31 October 2022 BSV's voluntary administration ceased. That same day, Nath and Hamdan's respective directorships of BSV ceased, and Houssam Taleb was appointed as a director of BSV. On 4 November 2022 Wessam Taleb and Hussein Taleb were also appointed directors of BSV. The new directors of BSV did not have knowledge of, nor were they complicit in, the commission of the offences the subject of these proceedings.
Between 3 and 7 November 2022, approximately 257.88 tonnes of waste tyres and waste tyre material were removed as part of a clean-up of the premises at a cost of $501,296.
[11]
Risk Posed by Waste Tyres and Waste Tyre Products
It was not a matter of contention that the fire risks that waste tyres and waste tyre products pose are as follows:
1. if tyres catch alight, each tyre can emit around two litres of oil during combustion, thereby increasing the fire risk and the spread of any fire;
2. if stacked tyres catch alight, the lower combusting tyres are compressed. This results in tyres higher up the stack moving deeper into the stack, and therefore, into the heat of the combustion zone. In tyre stacks that are vertical a "chimney effect" may occur. This causes air to be drawn in from the bottom (one side) of the tyre and travel upwards via the combustion zone. This encourages the flaming combustion to stay inside the tyre. Additionally, combusting tyres can roll off the stack and spread fire to other stacks if tyres are stored "tread-up";
3. even after flaming combustion ceases, the smouldering may continue for a long period. During the smouldering phase, combustion by-products continue to be emitted by the tyres;
4. the fire dynamics associated with a burning stack of tyres maintains the flaming combustion on the inside of the tyres. This makes it hard, if not impossible, for firefighting extinguishing agents to reach the combustion zone, especially if the stack is tall. Therefore, the outcome is often an excessive amount of firefighting water discharged at the fires;
5. because excessive amounts of firefighting water is discharged onto tyre fires, large amounts of fire water runoff occurs, which needs to be managed. Atmospheric emissions include carbon monoxide, sulphur oxides, nitrogen oxides, volatile organic compounds, cyclic aromatic hydrocarbons, hydrogen chloride, benzene, and polychlorinated biphenyls. Liquid emissions are mainly an oil or hydrocarbon substance, which can adversely impact water ways. This oily by-product contains several other substances including, naphthalene, benzene, anthracene, sulphur compounds, arsenic, and cyanide; and
6. there are various available ignition sources for tyre fires to occur at facilities such as the premises. In waste or recycling tyre facilities, tyre fire ignition causes are generally arson, bush or grass fires, on-site machinery fires, or lightning strikes.
[12]
Fire Brigade Policy
At all relevant times BSV, through its directors, was aware of the Fire Brigade Policy. The Fire Brigade Policy (see condition O4.1 of the licence) provided information regarding the risk of tyre fires. It stated that:
Rubber tyres are not easily ignitable, however when alight, they are extremely difficult to extinguish. The Calorific value of rubber is nearly 40 000 kilojoules/kilogram, which is generally twice that of other common combustible materials.
Note: When tyres burn, the high energy release rate results in a very hot fire and a considerable volume of smoke being generated, both of which present a high hazard to the community, environment and firefighters.
The physical properties of rubber tyres also cause difficulty when trying to extinguish tyre fires. The shape of tyres and the tyre stacking arrangement result in many pockets which are difficult to penetrate with extinguishing mediums quickly being shed and drained away.
Due to these reasons, tyre stacks involved in fire must be physically separated in order to be extinguished. Adopting recommendations in this document will assist the [New South Wales Fire Brigade] to contain and extinguish tyre fires.
The Fire Brigade Policy went on to provide the following information in respect of the "tread-up" storage of tyres:
Tyres stacked on their treads, known as 'tread up' storage, is not acceptable… In the event of a fire, tread up tyres easily roll away and ignite neighbouring stacks unless they are retained within a suitable rack storage system.
[13]
MRA Consulting Report
In addition to an awareness of the Fire Brigade Policy, BSV, through its directors, was also cognisant of the content of the MRA Report.
Figure 5 in the MRA Report was incorporated into the licence by condition O4.2. The MRA Report stated in relation to the risks of air pollutants from tyre fires that:
Discharge of pollutants to air would only occur in the event of a fire when tyres break down releasing hazardous compounds including gases, heavy metals and oil. The smoke generated by tyre fires is thick and includes a large number of toxic gases.
Mitigation of the threat from outbreak of a tyre fire on the premises is assured by strict compliance at all times with the NSW Fire Brigades Policy No. 2 Guidelines for Bulk Storage of Rubber Tyres.
Regarding the importance of compliance with the Fire Brigade Policy, the MRA Report was in these terms:
BSV is aware that compliance at all times with the Fire Brigade Guidelines is required for all facilities intending to store new or used rubber tyres and is committed to always adhere to these guidelines.
Under the section titled "Environmental outcomes", the MRA Report stated that:
The environmental goals for the BSV site relate primarily to the prevention and control of fire at the property, which represents the greatest risk to the environment.
The Pollution Incident Response Management Plan ("PIRMP") attached to the MRA Report specified that:
Tyres are difficult to ignite, but once alight burn furiously and are difficult to extinguish. Burning tyres emit toxic fumes that are harmful to the environment.
The risk of a tyre fire represents the greatest hazard on site, therefore prevention of fire is the most important hazard minimisation practice on site.
In respect of local waterways, the PIRMP went on to note that:
If a fire event occurs, the main risk to surface water quality is caused by contaminated fire quench water from site entering drains and being discharged into the local stormwater system. There are stormwater pits installed on site to retain this water, however they are potentially not of sufficient size to contain all water.
Addressing airborne impurities and toxins, the PIRMP provided that:
Due to the nature of waste tyres, they are stable and not considered to be a hazardous material. However if there is a fire, tyres generate thick smoke while breaking down into hazardous compounds including gases, heavy metals, and oil.
Tyre fires are rare and BSV is well prepared to prevent them therefore, under normal circumstances, it can be considered that the processing and storages of waste tyres poses a low threat of generating air pollution. Mitigation of the threat of outbreak of a tyre fire on the premises is assured by the implementation of BSV's Site Compliance Plan, which related to the NSW Fire Brigades Policy No. 2 Guidelines for Bulk Storage of Rubber Tyres.
[14]
The Evidence Relied Upon by the Parties
The EPA relied upon the SOAF.
In addition to the SOAF, BSV read the affidavit of Hussein Taleb, BSV's current director, sworn on 5 March 2024 ("Taleb affidavit").
Among other things, Taleb deposed that at no time during the negotiation to purchase BSV nor in the course of his communications with the EPA during the cleanup process was he made aware of the fact that the EPA intended to prosecute the company thereby exposing it to penalties totalling a maximum of $10 million. Understandably, therefore, the proceedings have caused him and his brothers considerable distress given the considerable amount of money they have invested in BSV to date, including on remediating the site.
[15]
The Purpose of Sentencing
The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 ("CSPA"):
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.
[16]
Statutory Matters Required to be Taken into Account in Sentencing
Subsections 21A(2) and (3) of the CSPA sets out aggravating and mitigating factors that the Court must consider. The factors relevant to the facts of this case are:
21A Aggravating, mitigating and other factors in sentencing
…
(2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows
…
(d) the offender has a record of previous convictions (particularly if the offender is being sentenced for a serious personal violence offence and has a record of previous convictions for serious personal violence offences),
…
(i) the offence was committed without regard for public safety,
…
The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.
(3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows-
(a) the injury, emotional harm, loss or damage caused by the offence was not substantial,
…
(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,
(h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise,
(i) the remorse shown by the offender for the offence, but only if-
(i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and
(ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both),
…
(k) a plea of guilty by the offender (as provided by section 22 or Division 1A),
…
(m) assistance by the offender to law enforcement authorities (as provided by section 23)…
For offences created by the POEOA, the Court is also required to consider the matters set out in s 241(1) of that Act:
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,
…
(2) The court may take into consideration other matters that it considers relevant.
[17]
Objective Seriousness of the Offences
The objective gravity of the offences fixes both the upper and lower limits of proportionate punishment. It fixes the upper limit insofar as the sentence must not exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances (Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 and Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at [354]). It fixes the lower limit because allowance for the subjective factors of the case ought not produce a sentence which fails to reflect the objective gravity or seriousness of the offence (R v Dodd (1991) 57 A Crim R 349 at [354] and R v Nichols (1991) 57 A Crim R 391 at [395]).
The objective gravity of the offence is judged having regard to two principal components: first, the acts or omissions of the offender; and second, the consequences of those acts or omissions (Environment Protection Authority v Baiada Poultry Pty Ltd [2008] NSWLEC 280; (2008) 163 LGERA 71 at [22]).
[18]
Nature of the Offences
The nature and purpose of the statutory provision that has been contravened, and its place in the statutory scheme, are relevant to the determination of the objective seriousness of the commission of an environmental offence (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 at [168]-[172]).
The relevant objects contained in s 3(a),(d),(e) and (f) of the POEOA identify the purpose of creating the offences with which BSV has been charged.
These objects reinforce the beneficial nature of the statutory framework and the essential role that the regulation of pollution plays in achieving those objects, notably through the promulgation of a licensing regime (Environment Protection Authority v Bartter Enterprises Pty Ltd (No 4) [2021] NSWLEC 45 at [49]-[51]).
There is a need for strict compliance with the conditions imposed by an environmental protection licence. An environmental protection licence is the statutory instrument that sanctions some forms of pollution. It is the price payable for engaging in polluting activity. As such, failure to observe the conditions of authorisation undermines the achievement of the objects of the POEOA (Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident) [2014] NSWLEC 103; (2014) 206 LGERA 239 at [204] and Environment Protection Authority v Ridley AgriProducts Pty Ltd [2019] NSWLEC 119 at [46]).
The storage of waste, including waste tyres, contrary to the licence undermined the regulatory scheme as it relates to waste generally, and more specifically, to tyre waste (Environment Protection Authority v Albiston [2020] NSWLEC 80 at [76]). It also risked harm to the environment.
[19]
Maximum Penalty
The maximum penalty provided for an offence indicates the seriousness with which Parliament views the commission of the offence (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 and Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698).
BSV is charged with ten breaches of s 64(1) of the POEOA, each of which carry a maximum penalty of $1,000,000 in the case of a corporation.
[20]
BSV's State of Mind at the Time of the Commission of the Offence
The offences are crimes of strict liability which means that mens rea is not an element of the offence. However, the state of mind of BSV at the time of the commission of the offences is nevertheless relevant in the determination of an appropriate sentence (s 241(1) of the POEOA and Environment Protection Authority v Eveston (No 3) [2022] NSWLEC 128 and Environment Protection Authority v Maules Creek Coal Pty Ltd [2022] NSWLEC 33 at [153]).
A strict liability offence that is committed intentionally, negligently, or recklessly, is objectively more serious than one committed accidentally (Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [123], Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [42] and Environment Protection Authority v Wollondilly Abattoirs Pty Ltd & Davis [2019] NSWCCA 312 at [72]-[75]).
The POEOA does not contain an offence that has mens rea as an element of it in respect of a contravention of an environment protection licence. Accordingly, the principle in The Queen v De Simoni [1981] HCA 31; (1981) 147 CLR 383 does not arise.
Section 169C of the POEOA provides:
169C Evidence as to state of mind of corporation
(1) Without limiting any other law or practice regarding the admissibility of evidence, evidence that an officer, employee or agent of a corporation (while acting in his or her capacity as such) had, at any particular time, a particular state of mind, is evidence that the corporation had that state of mind.
(2) In this section, the state of mind of a person includes -
(a) the knowledge, intention, opinion, belief or purpose of the person, and
(b) the person's reasons for the intention, opinion, belief or purpose.
Section 169C of the POEOA is an evidentiary provision which provides that evidence of the state of mind of an officer, employee or agent of a corporation is evidence of the state of mind of the corporation (Wollondilly Abattoirs at [33] and Environment Protection Authority v Aussie Earthmovers Pty Ltd (No 2) [2020] NSWLEC 98 at [39]). Accordingly, the state of mind of Nath, Hamdan and Koufelos is also evidence that BSV had a particular state of mind.
The EPA submitted that BSV committed the offences recklessly. The test for recklessness was set out in Albiston (at [99]):
99. An offender's conduct will be found to be reckless if he, she or they are put on notice, in the sense that he, she or they believe or suspects, that an act or omission may be unlawful but nevertheless proceeds to engage in it without making further enquiries.
[21]
The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offences
Section 241(1)(a) of the POEOA requires the Court to take into account the extent of the harm caused, or likely to be caused, to the environment by the commission of the offences. Where the harm caused was not substantial, the Court can take this into account as a mitigating factor (s 21A(3)(a) of the CSPA).
The composite term "harm to the environment" is broadly defined in the Dictionary of the POEOA as:
Harm to the environment includes any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution.
The concept of harm in the context of environmental offences extends to both actual and potential harm (Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 at [145]-[149]).
There is, however, a distinction between actual harm to the environment and harm to the regulatory regime (ACE Demolition & Excavation Pty Ltd v Environment Protection Authority [2024] NSWCCA 4 at [65]). While the former should be considered under s 241(1)(a) of the POEOA, the latter is a relevant factor under s 241(2) of that Act only.
In terms of offences involving the improper storage of waste tyres, the Court has taken into consideration the potential for environmental harm resulting from this unlawful conduct (Environment Protection Authority v Richardson; Environment Protection Authority v Behnfeld [2002] NSWLEC 205 and Environment Protection Authority v Obaid [2005] NSWLEC 171).
The extent of harm caused by the commission of the ten offences was not in dispute. The offences did not cause actual harm to the environment, rather they caused potential harm by reason of the manner in which the waste tyres and waste tyre products were stored on the premises. The potential harm is summarised below:
1. in respect of the exceedance offence, the volume of waste tyres and waste tyre products on the premises meant that on 30 March 2022, there was an elevated fire risk and any tyre fire that occurred would be larger and more difficult to extinguish. This also meant that if any fire event occurred, more water would be needed to control and suppress the fire, which would increase the likelihood of soil and groundwater contamination due to runoff from the water being used to extinguish it. This would exacerbate the potential for harm to the environment;
2. in respect of the height offence, the height of the waste tyres and waste tyre products on the premises meant that on 30 March 2022, any tyre fire that occurred would be more difficult to extinguish due to the "chimney effect" explained above. This would increase the potential for harm to the environment;
3. in respect of the tread-up offences, the storing of waste tyres and waste tyre products on the premises "tread-up" meant that any tyres that caught alight could roll into other areas of the premises, potentially causing other waste tyres and waste tyre products to catch alight. This would increase the potential for harm to the environment, as outlined immediately below. This meant that on 30 March, 10 May, 31 May and 26 July 2022, the premises were in a state conducive for a tyre fire to spread if it were ignited at the premises; and
4. in respect of the storage offences, the storing of waste tyres and waste tyre products on the premises in contravention of Figure 5 of the MRA Report meant that on 30 March, 10 May, 31 May and 26 July 2022, any fire on the premises would be more difficult to contain.
[22]
Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offences
Section 241(1)(c) of the POEOA obliges the Court to have regard to the extent to which the offender could reasonably have foreseen the harm caused, or likely to be caused, to the environment.
At all relevant times, BSV, through its directors, was aware of the conditions of the licence, as well as the Fire Brigade Policy and MRA Report. The Fire Brigade Policy set out the fire risks rubber tyres pose and the MRA Report outlined the risks of air pollutants from tyre fires. Both documents stated the importance of the proper storage of tyres to mitigate such risks. BSV was therefore aware of the possibility of potential environmental harm caused by non-compliance with the conditions of the licence. I am therefore satisfied that the potential harm was reasonably foreseeable.
[23]
Practical Measures that Could Have Been Taken to Prevent or Mitigate the Environmental Harm
Section 241(1)(b) of the POEOA requires the Court to take into account the practical measures that may be taken to prevent, control, abate or mitigate harm to the environment.
The EPA submitted that BSV could have undertaken the following practical measures to mitigate the risk of harm caused by the offences:
1. in respect of the exceedance offence, by refusing to accept tyres at the premises in excess of the licence limit. This practical measure was open to BSV and neither the tyre export ban nor the breakdown of the tyre shredding machine were obstacles to this practical measure being implemented;
2. in respect of the height offence, by directing employees not to stack tyres beyond the limit set by the licence. Again, this measure was open to BSV at all times. Nath met with Hamdan and Koufelos each week regarding the storage of waste tyres and waste tyre products on the premises and was also in the outdoor yard of the premises every day;
3. in respect of the tread-up offences, by directing employees to not store the tyres that way. As the EPA submitted, this would have been easier to implement had BSV ensured that no more than 150 tonnes of waste tyres were on the premises at any given time; and
4. in respect of the storage offences, by directing employees to store the tyres correctly on the premises.
BSV's written submissions did not address practical measures available. I have nevertheless had regard to the SOAF which set out:
1. the efforts taken by BSV to bring the premises into compliance with the licence following the commission of the offences (at [26]-[30]); and
2. the extenuating factors, including the tyre export ban and the broken machine, which limited some of the actions practically available to BSV to prevent the commission of the offences (at [12]-[18]).
Despite these efforts and extenuating factors, I nevertheless find that there were further steps BSV could have taken to minimise the potential for harm, including refusing to accept waste tyres in excess of its licence limitation and by directing staff to properly store the tyres.
[24]
Control Over the Causes of the Commission of the Offences
Section 241(1)(d) of the POEOA requires the Court to take into account the extent to which the person who committed the offence had control over the causes that gave rise to it.
The EPA submitted that BSV had control over the causes of each of the offences, because it could exert control over the number of waste tyres that were accepted at the premises and the way in which those waste tyres were stored. Despite the export of waste tyres being regulated between 2020 and 2021, and BSV's machinery breakdown, BSV nevertheless knew that it could not bring more than 150 tonnes of waste tyres to the premises pursuant to condition L2.2 of the licence.
By contrast, BSV submitted that the commission of the offences was wholly attributable to the conduct of Nath, the controlling mind of BSV at the time the offences were committed.
This submission does not assist BSV. The principles of attribution for the statutory liability of a corporation were identified by Pain J in Aussie Earthmovers (No 2) where she stated (at [37] to [38]):
37 When determining whether the mental state or conduct of a person should be attributed to a corporation, it is necessary to identify the "rules of attribution" (Director General, Department of Education and Training v MT (2006) 67 NSWLR 237; [2006] NSWCA 270 (MT) at [19] (Spigelman CJ, Ipp JA and Hunt AJA agreeing), citing Meridian Global Funds Management Asia Ltd v Securities Commission [1995] 2 AC 500 at 506 (Lord Hoffmann); Environment Protection Authority v Wollondilly Abattoirs Pty Limited & Davis [2019] NSWCCA 312 (Wollondilly Abattoirs) at [19] (Brereton JA, Harrison J and Bellew JJ agreeing). In many cases, the conduct of persons in actual control of particular operations of the company will constitute the company for particular statutory purposes (MT at [17]; Wollondilly Abattoirs at [20]). In Tesco Supermarkets Ltd v Nattrass [1972] AC 153 (Tesco) at 170 (Lord Reid) cited in Hamilton v Whitehead (1988) 166 CLR 121; [1988] HCA 65 at 127 (Mason CJ, Wilson and Toohey JJ) said that a company may also be liable for an act performed by a person if the person is:
…acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company.
38 Where the question is one which involves the statutory liability of a corporation, the terms of the statute are critical to determining whether a person's conduct or state of mind may be attributed to the corporation (Wollondilly Abattoirs at [14]; Commonwealth Bank of Australia v Kojic (2016) 249 FCR 421; [2016] FCAFC 186 (Kojic) at [100] (Edelman J)). Section 169C(1) of the POEO Act provides that "without limiting any other law or practice regarding the admissibility of evidence, evidence that an officer, employee or agent of a corporation (while acting in his or her capacity as such) had, at any particular time, a particular state of mind, is evidence that the corporation had that state of mind". "State of mind" is defined in s 169C(2) to include the "knowledge, intention, opinion, belief or purpose of the person" and "the person's reasons for the intention, opinion, belief or purpose".
[25]
Whether the Offences Were Committed Without Regard to Public Safety
If an offence is committed without regard to public safety, this serves to aggravate the seriousness of an offence pursuant to s 21A(2)(i) of the CSPA.
The EPA submitted that the offences were committed without regard to public safety because the acceptance of such a large quantity of waste tyres and their improper storage significantly increased the risk of a tyre fire and its attendant harm (Environment Protection Authority v Carbon MF Pty Ltd; Environment Protection Authority v Fair [2023] NSWLEC 120 at [43]-[44]).
I accept the EPA's submission and find that the offences were committed without regard to public safety.
[26]
Conclusion on the Objective Seriousness of the Offending Conduct
Considering the objective circumstances of the commission of the offences, I find that all ten offences are of low to moderate objective seriousness.
[27]
Contrition and Remorse
Pursuant to s 21A(3)(i) of the CSPA, remorse is only a mitigating factor if:
(i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and
(ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both),
In Waste Recycling Preston J suggested four ways by which an offender may demonstrate genuine contrition and remorse, which are relied upon without repetition (at [204], [210], [212] and [214]).
The EPA accepted that BSV displayed remorse by entering pleas of guilty and by undertaking remediation upon BSV coming under new directorship. The new directors of BSV removed approximately 257.88 tonnes of waste tyres and waste tyre material from the premises as part of cleaning up the premises at a cost of approximately $500,000.
The affidavit of Taleb also sets out additional measures such as:
1. engaging Mark Jackson, an environmental consultant, to assist with the remediation of the premises;
2. corresponding with the EPA and providing updates regarding the sale of the premises; and
3. undertaking clean-up activities at the premises that the EPA considered to be satisfactory.
BSV further relied on its compliance with the requirements of the licence over the 18 months since the new directors were appointed as evidence of its contrition and remorse.
I find that BSV's actions, including investing into cleaning up the premises, engaging environmental consultants and cooperating with the EPA, demonstrate its genuine contrition and remorse, which is a mitigating factor in sentencing (s 21A(3)(i) of the CSPA).
[28]
Early Pleas of Guilty
A guilty plea entered at the earliest available opportunity entitles a defendant to the full 25% discount for the utilitarian value of that early plea (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [160]).
BSV conceded that it did not enter a plea at the earliest opportunity, however, that it did so at the "first reasonable opportunity" (Cameron v The Queen [2002] HCA 6; (2002) 209 CLR 339 at 346 [23]-[25]). Prior to entering the pleas, BSV participated in case management processes and negotiations with the EPA to narrow the issues in dispute.
The EPA submitted that BSV's early pleas of guilty are a mitigating factor, however, that they did not come at the earliest opportunity. I agree. The summonses were filed in March 2023, that is after the change in ownership of the company. The first return date was in May 2023 and it was not until November 2023 that the pleas of guilty were entered. This was not at the first reasonable opportunity. I therefore find that BSV is entitled to a 22% discount for its early pleas.
[29]
Assistance to the EPA
BSV provided assistance to the EPA in the prosecution of the offences (ss 21A(3)(m) and 23 of the CSPA), including by participating in the preparation of the SOAF. I take this factor in mitigation into account.
In addition to the Court considering BSV's cooperation with the EPA under s 21A(3)(m) of the CSPA and its early pleas under s 21A(3)(k), BSV submitted that it should take into account BSV's "willingness to facilitate the course of justice" as a separate mitigating factor under s 21A(1) of the CSPA. BSV relied on the following principles in support:
1. s 21A(1) of the CSPA permits the Court to take into account "any other matters that are required or permitted to be taken into account by the court under any Act or rule of law". Section 21A(1) is therefore open-ended and preserves common law principles (citing Porter v R [2008] NSWCCA 145 at [87], Cvitan v R [2009] NSWCCA 156 at [60], Archer v R [2017] NSWCCA 151 at [132], Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [18] and R v Way [2004] NSWCCA 131; (2004) 60 NSWLR 168 at [56]-[57]); and
2. the High Court has recognised that a plea of guilty "may be taken into account in mitigation for the reason that a guilty plea evidences a willingness to facilitate the course of justice and not simply because the plea saves the time and expense of those involved in the administration of criminal justice" (citing Cameron at [18] and Green v R [2022] NSWCCA 230 at [57]). This principle applies in New South Wales (citing R v Sharma [2002] NSWCCA 142; (2002) 54 NSWLR 300 at [65]).
I accept that BSV has demonstrated a "willingness to facilitate the course of justice" through entering early pleas and cooperating with the EPA. However, this willingness has already been taken into account under ss 21A(3)(k), 21A(3)(m), 22 or 23 of the CSPA (Environment Protection Authority v ACE Demolition & Excavation Pty (No 2) [2023] NSWLEC 3 at [199]-[216], Environment Protection Authority v Mouawad (No 2); Environment Protection Authority v Aussie Earthmovers Pty Ltd (No 3) [2020] NSWLEC 166 at [55], Secretary, Department of Planning and Environment v SingTel Optus Pty Ltd [2019] NSWLEC 44 at [114]-[127] and Environment Protection Authority v Edward Gilder [2018] NSWLEC 119 at [155]-[161]).
[30]
Prior Convictions of BSV
BSV has the following prior convictions for environmental offences (s 21A(2)(d) and 21A(3)(e) of the CSPA):
1. on 24 November 2021 the Bankstown Local Court convicted BSV of five offences contrary to s 64(1) of the POEOA. These related to BSV's failure to use a weighbridge at the premises in contravention of condition O5.1 of its licence during 2020, and six offences contrary to cl 36(3)(d)(i) of the Protection of the Environment Operations (Waste) Regulation 2014, relating to trucks owned by other companies failing to use the weighbridge at the premises during 2020. The Court fined BSV a total of $22,000 ($2,000 for each offence), ordered BSV to pay the EPA's legal and investigation costs, and ordered BSV to publish a notice in Inside Waste in relation to its commission of the offences ("the November 2021 offences"); and
2. on 16 June 2021 the Bankstown Local Court convicted BSV of two offences contrary to s 64(1) of the POEOA, relating to contraventions of condition L2.2 and O4.1 of the licence. The Court fined BSV $9,000 for breach of condition L2.2 and $5,000 for breach of condition O4.1, ordered BSV to pay the EPA's legal and investigation costs, and ordered BSV to publish a notice in Inside Waste in relation to the commission of these offences ("the June 2021 offences").
The penalties were not paid by the previous owners of BSV and were a continuing debt when the new directors took over BSV in November 2022.
The fines and costs relating to the November 2021 offences and June 2021 offences, which totalled $52,316, were paid by the new directors.
BSV submitted that because Nath was the director of BSV at the time of the commission of the November and June 2021 offences, he was the cause of BSV's prior wrongdoing. Accordingly, in circumstances where there has been a change in directorship since the commission of the offences, the rationale for increasing the sentence due to its prior criminal history does not apply (s 21A(5) of the CSPA). BSV relied on Veen to articulate the proper consideration of antecedent criminal history (at 477-478):
…the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell (1970) AC 642, at p 650. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties.
[31]
The Good Character of BSV and its Likelihood of Reoffending
BSV relied on the Taleb affidavit in support of an assertion that it was unlikely to reoffend and had good prospects of rehabilitation. In particular, it emphasised that:
1. in October 2022, it appointed new directors;
2. in November 2022, prior to the charges being laid, it had expended over $500,000 and worked closely with the EPA to bring the premises into compliance with the licence; and
3. it had engaged Jackson to prepare a management plan to assist it its ongoing compliance with the licence conditions.
The EPA submitted that it was open to the Court to find that BSV's likelihood of reoffending was low and that it had good prospects of rehabilitation given the actions taken by the new directors of BSV (ss s 21A(3)(g) and 21A(3)(h) of the CSPA, and R v MAK & MSK [2006] NSWCCA 381 at [41]).
The EPA also submitted that it was open to the Court to find that BSV is currently of good character even if it was not of good character at the time of the commission of the offences (s 21A(3)(f) of the CSPA and Lozanovski v R [2006] NSWCCA 143 at [12]).
I agree with both submissions, however, I find that the likelihood of BSV reoffending is not entirely negligible due to its prior convictions (s 21A(3)(g) of the CSPA).
[32]
Deterrence, Denunciation and Retribution
The Court is required to take into account both specific and general deterrence (Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 at [569]-[570] per Brennan J).
Relying on R v Bredal [2024] NSWCCA 75 (at [83]-[85]), BSV argued that (by analogy), the change in ownership and directors was akin to the voluntary cessation of criminal activity that ought to be taken into account in determining the appropriate sentence to be imposed in these proceedings. As a consequence, less weight was required to be given to both general and specific deterrence as an aspect of punishment.
The penalty imposed by the Court must serve as a general deterrent (Axer at [359]; Camilleri's Stock Feeds at [701] and Bentley at [139]; and see also s 3A(b) of the CSPA). In Environment Protection Authority v Ballina Shire Council (2006) 148 LGERA 278; [2006] NSWLEC 289 Preston J discussed general deterrence in the context of sentencing for environmental crime (at [66]-[68]). Those principles are applied here without repetition.
I accept that embedded in the determination of the appropriate sentence to be imposed on BSV is an element of general deterrence in order to ensure that holders of environment protection licences comply with the attached conditions when undertaking waste management activities. I do not agree that limited weight ought to be given to this aspect of the sentencing process by reason of the change in BSV's directors, which other entities in the waste industry are unlikely to be aware of. The deterrence to be served by punishing BSV is to ensure that others engaged in the waste industry, especially in waste tyre businesses, comply with the terms of any approval governing their industrial activities. It is specific to the company and not to the individual directors.
In relation to specific deterrence (s 3A(b) of the CSPA), the EPA submitted that specific deterrence is necessary because BSV has prior convictions (Veen at 477, R v Abboud [2005] NSWCCA 251 at [33] and R v McNaughton (2006) 66 NSWLR 566 at [54]), and has previously displayed an attitude of disobedience toward, and disregard for, environment protection legislation. Further, BSV continues to hold the licence and will continue to be involved in the waste tyre industry.
There is some force to this submission. BSV has now committed 23 environmental offences. The penalty imposed upon BSV must serve to ensure that all future waste related activities carried out by it are in compliance with its licence. But having said this, I also accept that the change in directors means that less weight should be accorded to this factor than would otherwise be the case. The new directors have, through their actions in remediating the site and implementing practical measures to ensure that no further offences are committed, demonstrated a willingness to comply with the terms of BSV's licence.
[33]
The Totality Principle
The totality principle was recently considered by Duggan J in Natural Resources Access Regulator v Lidokew Pty Ltd [2024] NSWLEC 59 (at [48]-[50] and [52]):
48 The principle of totality is a relevant sentencing principle in the present case where each of the offences with which the Defendant has been charged and which it has been found guilty arise from the same identical facts and circumstances (albeit with differing error rates for each offence).
59 The principle has been concisely described by the majority of the High Court in Pearce v The Queen (1998) 194 CLR 610 (Pearce) at 623 as:
623 To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.
50 Each party also referred me to the statement of the principle expressed by Preston CJ of LEC in Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [142] that:
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.
…
52 I also have had regard to the expression of the principle in Ace Demolition & Excavation Pty Ltd v Environment Protection Authority [2024] NSWCCA 4 at [108]-[111] where Leeming JA considered the application of principle of totality in the following manner:
108 I turn to totality. The primary judge found that the three offences involving Mr Al Sarray's fraudulent provision of information formed part of a single course of conduct, and was satisfied on the balance of probabilities that the fourth offence was carried out by Mr Al Sarray and was part of the same course of conduct: at [89]-[90]. His Honour regarded that finding as favourable to ACE, as is reflected by his application of the civil standard in respect of the fourth offence. I should proceed on the same basis.
109 EPA v Barnes [2006] NSWCCA 246 at [43]-[50] contains an extensive analysis by Kirby J writing for this Court on the applicable principles, confirming that the principle of totality applied to fines. The principle was applied at [50]:
Here, the fine in respect of count 1 ($4,000) was significantly different from that in respect of count 2 ($500). However, the disparity by itself does not suggest error. Where there are multiple offences, each punishable by a custodial sentence, the totality principle may find expression through the complete or partial accumulation of sentences, or through making all or some of the sentences concurrent (cf Pearce v The Queen (1998) 194 CLR 610, per McHugh, Hayne and Callinan JJ at 624 (para 45)). However, there is obviously no room for partial accumulation or concurrence in the case of fines. If the sentencing Judge believed that the totality principle required an adjustment to the fines which may otherwise be appropriate, the amount of each fine had to be altered, applying the sentencing principles suggested in Johnson v The Queen (2004) 205 ALR 346.
110 In EPA v Ghossayn Group Pty Ltd [2023] NSWLEC 127 at [128], Preston CJ of LEC said:
The totality principle applies where an offender has committed, and is to be sentenced for, multiple offences. The effect of the totality principle is to require the court in passing 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: Mill v the Queen (1988) 166 CLR 59 at 62-63; [1998] HCA 70; Pearce v the Queen (1998) 194 CLR 610; [1998] HCA 57 at [49]; Gittany Constructions Pty Ltd v Sutherland Shire Council (2006) 145 LGERA 189; [2006] NSWLEC 242 at [196]. In the case of a sentence of a fine, if the Court believes the totality principle requires an adjustment to the individual fines that would otherwise be appropriate, the amount of each fine can be altered: Environment Protection Authority v Barnes [2006] NSWCCA 246 at [50].
111 There is the potential for overlap when considering offending which is a "single course of conduct" and applying the principle of totality. As will be seen below, the third offence overlaps with the first, and properly warrants a discount for that reason. In a sense, whether that is an aspect of the offending being part of the same course of conduct, or through the application of totality does not greatly matter. Nonetheless, the principled approach, as applied by Kirby J and Preston CJ of LEC in the passages reproduced above, is to leave questions of totality to the end, and apply a final check of the aggregate against whether it is a just and appropriate punishment for the entire criminality. That is the course I shall follow.
[34]
Parity
The EPA submitted that the parity principle arose between this prosecution and that of Nath in Environment Protection Authority v Nath [2024] NSWLEC 10. Nath was prosecuted on the basis of his executive liability under s 169 of the POEOA in respect of BSV's contraventions the subject of these proceedings. While BSV and Nath are not strictly co-offenders, the parity principle applies by virtue of the relationship between the offending of BSV and Nath.
The EPA further submitted, however, that the Court should have regard to differences between the objective and subjective factors of the offending of Nath and BSV when applying the parity principle. For instance:
1. the maximum penalty for Nath's offending was $250,000 whereas the maximum penalty for BSV is $1,000,000; and
2. BSV has different subjective features than Nath. For example, Nath received a 25% utilitarian discount for his early plea of guilty, had no prior convictions, his likelihood of reoffending was found to be extremely low, and he was found to be unable to pay a significant monetary penalty due to his financial circumstances.
The parity principle is concerned with sentencing consistency and equality before the law (Green v The Queen [2011] HCA 49; (2011) 244 CLR 462 at [28]). Sentencing disparity imposed on co-offenders breaches the parity principle (Green at [28]). Because the principle is governed by substance rather than form, it applies not only to co-offenders but also to persons involved in the same criminal enterprise (Green at [30] and Elias v The Queen (2013) 248 CLR 483 at [30])
In Postiglione v The Queen (1996) 189 CLR 295; [1997] HCA 26, Dawson and Gaudron JJ stated (at 301 and 303):
Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality.
…
…as between co-offenders, different criminal histories and custodial patterns may be such as to justify a real difference in the time each will serve in prison. And, of course, it is necessary when applying the parity principle that like be compared with like. There may be some aspect of one offender's criminal history or custodial situation which has no counterpart in the case of his or her co-accused. If so, it may justify the imposition of a different sentence or the structuring of the sentence in such a way that it results in some difference in the period actually spent in custody…
[35]
Consistency in Sentencing
The task of the sentencing court is to seek even-handedness in the imposition of a sentence (R v Oliver (1980) 7 A Crim R 174 at [177] and R v Visconti [1982] 2 NSWLR 104 at [107]). Care must be taken in comparing cases where the circumstances of, and facts relating to, the offences may be different (Axer at 365).
The EPA provided to the Court a table of six comparable cases that it submitted were of assistance in ensuring even-handedness in sentencing. These included: Eveston (No 3); Environment Protection Authority v Minto Recycling Pty Ltd [2019] NSWLEC 193; Environment Protection Authority v MA Roche Group Pty Ltd [2015] NSWLEC 29; Nath ; Environment Protection Authority v BSV Tyre Recycling Australia Pty Ltd (Local Court proceedings 2021/00245615, 2021/00245642, 2021/00245655, 2021/00245660, 2021/00245665, 2021/00245683, 2021/00245685, 2021/00245700, 2021/00245714, 2021/00245722 and 2021/00245731); and Environment Protection Authority v BSV Tyre Recycling Australia Pty Ltd (Local Court proceedings number 2021/0096161-2).
I have considered the cases referred to the Court by the EPA in sentencing BSV for the offences that it has committed. I have had particular regard to Nath.
[36]
Costs
The EPA sought an order for its professional costs pursuant to s 257B of the Criminal Procedure Act 1986 in the sum of $45,000. BSV agreed to the making of such an order.
In the exercise of its sentencing discretion the Court can take into account any costs payable by the defendant (Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58 at [123] and Environment Protection Authority v Barnes [2006] NSWCCA 246 at [78]-[88]).
I have taken the payment of the costs by BSV, which are likely to be substantial, into account in determining the appropriate sentence to be imposed upon it.
[37]
Appropriate Sentence
Having regard to the objective seriousness of the offences and the mitigating subjective factors of BSV, together with the penalties imposed in the relevant comparable cases, I find that the imposition of a monetary penalty is warranted for each offence as follows:
1. for the exceedance offence a monetary penalty of $40,000;
2. for the height offence a monetary penalty of $40,000;
3. for the tread-up offences a monetary penalty of $120,000; and
4. for the storage offences a monetary penalty of $120,000.
After the application of the 22% discount for the utilitarian value of the early guilty pleas, the penalty for the commission of each offence is reduced to:
1. for the exceedance offence a monetary penalty of $31,200;
2. for the height offence a monetary penalty of $31,200;
3. for the tread-up offences a monetary penalty of $93,600; and
4. for the storage offences a monetary penalty of $93,600.
Applying the totality principle, the final penalty for the commission of the offences is as follows:
1. for the exceedance offence a monetary penalty of $31,200;
2. for the height offence a monetary penalty of $15,000;
3. for the tread-up offences a total monetary penalty of $75,000; and
4. for the storage offences a total monetary penalty of $40,000.
This brings the combined amount of the monetary penalty to be imposed to $161,200.
There was no suggestion that BSV could not afford to pay a penalty of this magnitude (s 6 of the Fines Act 1996).
[38]
Moiety
The EPA contended that half of any monetary penalty imposed by the Court ought to be paid to it pursuant to s 122 of the Fines Act. Having regard to all of the circumstances of the case, I find that it is appropriate to make such an order.
[39]
Publication Order
The EPA seeks a publication order pursuant to s 250(1)(a) of the POEOA. The terms of the publication order are set out at annexure 'A' to this judgment.
While BSV accepts that there is a need for general deterrence, it submitted that imposing a publication order would create an unfair burden because:
1. BSV has demonstrated remorse and has good prospects of rehabilitation under the new directors;
2. BSV's new shareholders have spent approximately $500,000 to bring the premises into compliance with its licence and will have to pay the monetary penalty and the costs of these proceedings;
3. the offending conduct is attributable to Nath, as the controlling mind of BSV at the time of the commission of the offences, who has already been ordered to publicise the same breaches. The purpose of general deterrence has therefore been satisfied by the publication ordered in Nath, which specifically referred to BSV;
4. the mere fact of the publication of the sentence judgment will serve as a deterrent to others; and
5. the publication order will impact upon BSV's ability to trade and adversely affect public confidence in the company, despite the fact that those matters arose out of the conduct of Nath and the previous directors. Any commercial implications of the publication are extremely punitive.
For the following reasons I do not accept BSV's submission that making a publication order would impose an unfair burden on BSV:
1. first, because a publication order serves the functions of general deterrence, denunciation and a recognition of the harm caused by the offending conduct (Bartter Enterprises Pty Ltd (No 4) at [105] and Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90 at [76]). That is, the purposes served by the making of a publication order are wider than general deterrence as BSV submitted;
2. second, Nath has been separately sentenced for his offending conduct, which is different to that of BSV because BSV has been charged with six additional offences and BSV is a corporation. A publication order made against BSV is in different terms and will serve to deter corporations, as opposed to individual directors, from committing environmental offences;
3. third, I do not accept that the mere fact of publication of this judgment will have a sufficiently deterrent effect. In the age of social media, with the exception of the parties, the judgment is unlikely to be read widely by others; and
4. fourth, there was no evidence that the making of the order would have an adverse impact on BSV's ability to trade.
[40]
Orders
In conformity with the reasons given above, the Court makes the following orders:
In proceedings 2023/100401 (the exceedance offence)
1. the defendant is convicted of the offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
2. the defendant must pay a monetary penalty in the sum of $31,200;
In proceedings 2023/100402 (the height offence)
1. the defendant is convicted of the offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
2. the defendant must pay a monetary penalty in the sum of $15,000;
In proceedings 2023/100403, 100405, 100407 and 100409 (the tread-up offences)
1. the defendant is convicted of each offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
2. the defendant must pay a monetary penalty in the sum of $18,750 for each offence, for a combined total of $75,000;
In proceedings 2023/100404, 100406, 100408 and 100410 (the storage offences)
1. the defendant is convicted of each offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
2. the defendant must pay a monetary penalty in the sum of $10,000 for each offence, for a combined total of $40,000;
In proceedings 2023/100401-1004010 (all offences)
1. pursuant to s 122 of the Fines Act 1996, 50% of the monetary penalty imposed on the defendant is to be paid to the prosecutor as a moiety;
2. pursuant to s 257B of the Criminal Procedure Act 1986, the defendant is to pay the prosecutor's costs in the sum of $45,000;
3. within 28 days of the date of this order or in the next edition, whichever comes first, and pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, the defendant must, at its expense cause a notice in the form of annexure "A" to these orders to be published within the first 12 pages of the following publications, at the size of a quarter of a page:
1. The Daily Telegraph; and
2. Inside Waste;
1. within seven days of the date of publications of the notices referred to in order 11, the defendant must provide the prosecutor with a complete copy of the notices as published pursuant to order 11; and
2. the exhibits are to be returned.
[41]
BSV Tyre Recycling Australia Pty Ltd Convicted and Penalised for Improper Storage of Tyres at its Facility in Revesby, NSW
BSV Tyre Recycling Australia Pty Ltd ("BSV") has been prosecuted by the Environment Protection Authority ("EPA") for ten offences of contravening an environment protection licence ("licence") that were committed in 2022. The prosecutions were brought because BSV stored waste tyres and waste tyre products in contravention of its licence at its facility in Revesby, NSW. The offences occurred on 30 March, 10 May, 31 May and 26 July 2022, respectively. Since this time, however, BSV has changed ownership. The offences were committed by its previous directors. Moreover, since the change of ownership BSV has complied with the terms of the licence.
Waste tyres and waste tyre products represent a fire hazard if not stored in a proper manner. If waste tyres and waste tyre products catch alight, they are capable of causing actual harm to the environment. In this case, although no fires occurred, the offences caused potential harm to the environment. This included potential harm to air quality, nearby land and waters, human health, and property on neighbouring premises.
On 24 June 2024, the Land and Environment Court of NSW convicted BSV of ten offences of contravening an EPL and ordered BSV to:
1. pay a monetary penalty totalling $161,200;
2. pay the EPA's costs in the sum of $45,000; and
3. cause this notice to be published at its own expense.
[42]
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: 24 June 2024
BSV Tyre Recycling Australia Pty Ltd Pleads Guilty to Ten Offences of Breach of Licence Offences
[64]
The defendant, BSV Tyre Recycling Australia Pty Ltd ("BSV"), has pleaded guilty to ten offences against s 64(1) of the Protection of the Environment Operations Act 1997 ("the POEOA"), insofar as it was the holder of Environmental Protection Licence No 20387 ("licence"), the following conditions of which were contravened:
[65]
(a) on 30 March 2022 approximately 318.9 tonnes of waste tyres were stored on the premises, in contravention of condition L2.2 of the licence ("the exceedance offence");
(b) on 30 March 2022 the height of waste tyres stored at the premises was approximately 4.8 m in height above ground level, in contravention of condition L2.3 of the licence ("the height offence");
(c) on 30 March, 10 May, 31 May and 26 July 2022, waste tyres were stored "tread-up", contrary to Pt 4 of the NSW Fire Brigades Guidelines for Bulk Storage of Rubber Tyres Policy No 2 ("the Fire Brigade Policy"), in contravention of condition O4.1 of the licence ("the tread-up offences"); and
(d) on 30 March, 10 May, 31 May and 26 July 2022, waste tyres were stored in locations on the premises which were not identified in Figure 5 in the report prepared for BSV by MRA Consulting, dated December 2014 ("MRA report"), in contravention of condition O4.2 of the licence ("the storage offences").
[66]
The relevant statutory provision creating the offences is:
[67]
(1) Offence If any condition of a EPL is contravened by any person, each holder of the EPL is guilty of an offence. Maximum penalty -
[68]
(a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or
(b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues.
[69]
BSV was formed in 2013 by directors Virendra Nath, Haissam Hamdan and Zhongbo Chang.
In 2013 BSV commenced operation of a waste tyre facility at 30 Daisy Street, Revesby ("the premises") pursuant to development consent DA-843/2013. At all relevant times BSV occupied, but did not own, the premises.
In 2019 Chang ceased being a director of BSV. Nath and Hamdan remained directors of BSV.
[70]
BSV was the holder of the licence and was aware of the conditions attached to it. The licence authorised the carrying out of the scheduled activities of resource recovery and waste storage, both relating to waste tyres, at the premises. The operative conditions of the licence for present purposes are as follows:
[71]
Condition L2.2: The authorised amount of waste (processed and unprocessed) permitted on the Premises cannot exceed 150 tonnes at any one time.
Condition L2.3: The maximum height of any processed or unprocessed waste tyres stored at the Premises cannot exceed 3.7 metres in height above ground level.
Condition O4.1: All waste tyres must be stored in accordance with the NSW Fire Brigades Guidelines for Bulk Storage of Rubber Tyres Policy No. 2.
Condition O4.2: All waste tyres must be stored in accordance with Figure 5 - (Site Plan showing location of tyres storage areas and facility gates) in the report compiled by MRA Consulting on Behalf of BSV dated December 2014.
[72]
In relation to condition O4.1, the relevant extract from the Fire Brigade Policy indicated that the storage of tyres "tread-up" was not acceptable, whereas tyres stacked outdoors in a lace arrangement was.
In relation to condition O4.2, Figure 5 from the MRA Report is a site plan of the premises showing the permitted location of tyre storage areas and facility gas:
[73]
BSV's business involved receiving waste tyres at the premises and processing them into bailed tyres, shredded tyres, and crumb rubber ("waste tyre products"). BSV dealt with its waste tyre products by:
[74]
(a) exporting bailed tyres to overseas markets until the export of these tyres was banned;
(b) exporting shredded tyres to overseas markets; and
(c) selling crumb rubber to the domestic market.
[75]
The day-to-day management of BSV operated in this manner:
[76]
(a) Nath was in charge of administration in the office and, due to the nature of his role, he was also in the outdoor yard of the premises daily. Nath also spent his time in an office at the premises and regularly communicated with the Environment Protection Authority ("EPA") regarding compliance. Nath met every Friday with Hamdan and Peter Koufelos regarding the storage of waste tyres and waste tyre products on the premises;
(b) Hamdan was in charge of logistics until he ceased to be actively involved with BSV sometime between January and July 2022. Hamdan's role primarily consisted of sourcing waste tyres and waste tyre products and driving, or instructing others to drive, waste tyres and waste tyre products to the premises. He did not spend time in the office at the premises or perform any administrative work. Hamdan brought tyres to the premises outside of hours and on weekends, but did not always weigh the tyres using BSV's weighbridge. Sometimes Hamdan collected cash in exchange for taking tyres to the premises;
(c) Neetika Bhargava was an administration officer at BSV. Bhargava worked under the direction of both Nath and Koufelos;
(d) Koufelos operated machines to process tyres and drove trucks to pick up tyres to bring them back to the premises. Koufelos was described as a "supervisor" by Bhargava. Koufelos was instructed by Nath in respect of the storage of tyres at the premises. He took instructions from both Nath and Hamdan until Hamdan ceased working at BSV. Koufelos did not always follow those instructions and occasionally brought tyres to the premises even after he had been told not to; and
(e) Raymon Mousa drove trucks to pick up tyres to bring back to the premises. Mousa collected cash for tyres to be brought to the premises and gave the cash to Hamdan.
[77]
In terms of environmental compliance, Nath instructed BSV staff that:
[78]
(a) BSV was limited to having 150 tonnes of tyre waste on the premises at any time and to not overfill the yard;
(b) stockpiles of tyres had to be below 3.7 m; and
(c) BSV was required to comply with storage requirements for waste tyres pursuant to the licence.
[79]
In March 2020 the Council of Australia Governments agreed to establish a ban on the export of waste. The ban included waste tyres.
In 2021 the Commonwealth announced that it intended to ban the export of whole-baled waste tyres.
In October 2021 the Recycling and Waste Reduction (Export-Waste Tyres) Rules 2021 (Cth) ("the Export-Waste Tyres Rules") were made under the Recycling and Waste Reduction Act 2020 (Cth). Among other things, the Export-Waste Tyres Rules required exporters of waste tyres to hold a waste export licence.
Between October and November 2021, BSV applied for a waste export licence.
In December 2021 the export of whole-baled waste tyres ("tyre export ban") was banned by the Export-Waste Tyre Rules. As a result of the tyre export ban, the following waste tyres could only be exported under a waste export licence:
[80]
(a) tyres that had been processed into shreds or crumbs of not more than 150 mm for use as tyre derived fuel;
(b) tyres for retread by an appropriate retreading facility, for example, a facility that is verified by Tyre Stewardship Australia's Foreign End Market program;
(c) tyres to an appropriate importer for re-use as a second-hand tyre on a vehicle; and
(d) tyres that had been processed into shreds, crumbs (when the shred or crumb is not for use as tyre derived fuel), buffings or granules.
[81]
In June 2022 BSV obtained a waste export licence to export crumb rubber and shredded tyres.
[82]
On 30 March 2022 BSV's tyre shredding machine broke down for a period of three months. As a consequence waste tyres at the premises could not be processed for export.
[83]
The EPA investigation involved four inspections of the premises on 30 March, 10 May, 31 May and 26 July 2022.
In relation to the exceedance offence, on 30 March 2022 approximately 318.9 tonnes of waste tyres and waste tyre products were observed on the premises in contravention of condition L2.2 of the licence. This was rectified by the time of the EPA's inspection on 10 May 2022.
In relation to the height offence, on 30 March 2022 the EPA found waste tyres and waste tyre products stored approximately 4.8 m above ground level between the western covered area and the eastern covered area of the premises in contravention of condition L2.3 of the licence. This had also been remediated by the time of the EPA's inspection on 10 May 2022.
In respect of the tread-up offences, on 30 March 2022 EPA officers observed tyres at the premises stored "tread-up" between the western covered area and the eastern covered area in contravention of condition O4.1 of the licence. This was not rectified by the time of the EPA's inspection on 10 May 2022.
During the EPA's inspection on 31 May 2022, EPA officers found tyres stored "tread-up" only within and around the eastern covered area of the premises.
On 26 July 2022, the EPA found that the tyres that were stored "tread-up" between the western covered area and the eastern covered area, as well as within and around the eastern covered area of the premises.
In relation to the storage offences, on 30 March 2022 tyres were found being stored on the premises contrary to Figure 5 of the MRA Report in contravention of condition O4.2 of the licence. This storage remained as at the EPA's inspections on 10 May, 31 May and 26 July 2022.
[84]
Efforts to Bring the Premises into Compliance with the Licence
[85]
On 8 April 2022 the EPA issued a Prevention Notice to BSV pursuant to s 96 of the POEOA. The Prevention Notice required BSV to, among other things, reduce the amount of waste tyres and waste tyre products on the premises to no more than 150 tonnes in order to bring BSV into compliance with condition L2.2 of the licence.
On 15 August 2022 BSV entered into voluntary administration.
On 20 October 2022 Starcorp Recycling Pty Ltd ("Starcorp") entered into a Deed of Company Arrangement ("the Deed") with BSV and the administrator, whereby Starcorp paid $1,250,000 into a fund for the administrator of BSV to apply, amongst other things, to discharge BSV's debts. The Deed required the existing shareholders to relinquish their shareholding in BSV in favour of Starcorp, which became the sole shareholder on 1 November 2023.
On 31 October 2022 BSV's voluntary administration ceased. That same day, Nath and Hamdan's respective directorships of BSV ceased, and Houssam Taleb was appointed as a director of BSV. On 4 November 2022 Wessam Taleb and Hussein Taleb were also appointed directors of BSV. The new directors of BSV did not have knowledge of, nor were they complicit in, the commission of the offences the subject of these proceedings.
Between 3 and 7 November 2022, approximately 257.88 tonnes of waste tyres and waste tyre material were removed as part of a clean-up of the premises at a cost of $501,296.
[86]
Risk Posed by Waste Tyres and Waste Tyre Products
[87]
It was not a matter of contention that the fire risks that waste tyres and waste tyre products pose are as follows:
[88]
(a) if tyres catch alight, each tyre can emit around two litres of oil during combustion, thereby increasing the fire risk and the spread of any fire;
(b) if stacked tyres catch alight, the lower combusting tyres are compressed. This results in tyres higher up the stack moving deeper into the stack, and therefore, into the heat of the combustion zone. In tyre stacks that are vertical a "chimney effect" may occur. This causes air to be drawn in from the bottom (one side) of the tyre and travel upwards via the combustion zone. This encourages the flaming combustion to stay inside the tyre. Additionally, combusting tyres can roll off the stack and spread fire to other stacks if tyres are stored "tread-up";
(c) even after flaming combustion ceases, the smouldering may continue for a long period. During the smouldering phase, combustion by-products continue to be emitted by the tyres;
(d) the fire dynamics associated with a burning stack of tyres maintains the flaming combustion on the inside of the tyres. This makes it hard, if not impossible, for firefighting extinguishing agents to reach the combustion zone, especially if the stack is tall. Therefore, the outcome is often an excessive amount of firefighting water discharged at the fires;
(e) because excessive amounts of firefighting water is discharged onto tyre fires, large amounts of fire water runoff occurs, which needs to be managed. Atmospheric emissions include carbon monoxide, sulphur oxides, nitrogen oxides, volatile organic compounds, cyclic aromatic hydrocarbons, hydrogen chloride, benzene, and polychlorinated biphenyls. Liquid emissions are mainly an oil or hydrocarbon substance, which can adversely impact water ways. This oily by-product contains several other substances including, naphthalene, benzene, anthracene, sulphur compounds, arsenic, and cyanide; and
(f) there are various available ignition sources for tyre fires to occur at facilities such as the premises. In waste or recycling tyre facilities, tyre fire ignition causes are generally arson, bush or grass fires, on-site machinery fires, or lightning strikes.
[89]
At all relevant times BSV, through its directors, was aware of the Fire Brigade Policy. The Fire Brigade Policy (see condition O4.1 of the licence) provided information regarding the risk of tyre fires. It stated that:
[90]
Rubber tyres are not easily ignitable, however when alight, they are extremely difficult to extinguish. The Calorific value of rubber is nearly 40 000 kilojoules/kilogram, which is generally twice that of other common combustible materials.
Note: When tyres burn, the high energy release rate results in a very hot fire and a considerable volume of smoke being generated, both of which present a high hazard to the community, environment and firefighters.
The physical properties of rubber tyres also cause difficulty when trying to extinguish tyre fires. The shape of tyres and the tyre stacking arrangement result in many pockets which are difficult to penetrate with extinguishing mediums quickly being shed and drained away.
Due to these reasons, tyre stacks involved in fire must be physically separated in order to be extinguished. Adopting recommendations in this document will assist the [New South Wales Fire Brigade] to contain and extinguish tyre fires.
[91]
The Fire Brigade Policy went on to provide the following information in respect of the "tread-up" storage of tyres:
[92]
Tyres stacked on their treads, known as 'tread up' storage, is not acceptable... In the event of a fire, tread up tyres easily roll away and ignite neighbouring stacks unless they are retained within a suitable rack storage system.
[93]
In addition to an awareness of the Fire Brigade Policy, BSV, through its directors, was also cognisant of the content of the MRA Report.
Figure 5 in the MRA Report was incorporated into the licence by condition O4.2. The MRA Report stated in relation to the risks of air pollutants from tyre fires that:
[94]
Discharge of pollutants to air would only occur in the event of a fire when tyres break down releasing hazardous compounds including gases, heavy metals and oil. The smoke generated by tyre fires is thick and includes a large number of toxic gases.
Mitigation of the threat from outbreak of a tyre fire on the premises is assured by strict compliance at all times with the NSW Fire Brigades Policy No. 2 Guidelines for Bulk Storage of Rubber Tyres.
[95]
Regarding the importance of compliance with the Fire Brigade Policy, the MRA Report was in these terms:
[96]
BSV is aware that compliance at all times with the Fire Brigade Guidelines is required for all facilities intending to store new or used rubber tyres and is committed to always adhere to these guidelines.
[97]
Under the section titled "Environmental outcomes", the MRA Report stated that:
[98]
The environmental goals for the BSV site relate primarily to the prevention and control of fire at the property, which represents the greatest risk to the environment.
[99]
The Pollution Incident Response Management Plan ("PIRMP**"**) attached to the MRA Report specified that:
[100]
Tyres are difficult to ignite, but once alight burn furiously and are difficult to extinguish. Burning tyres emit toxic fumes that are harmful to the environment.
The risk of a tyre fire represents the greatest hazard on site, therefore prevention of fire is the most important hazard minimisation practice on site.
[101]
In respect of local waterways, the PIRMP went on to note that:
[102]
If a fire event occurs, the main risk to surface water quality is caused by contaminated fire quench water from site entering drains and being discharged into the local stormwater system. There are stormwater pits installed on site to retain this water, however they are potentially not of sufficient size to contain all water.
[103]
Addressing airborne impurities and toxins, the PIRMP provided that:
[104]
Due to the nature of waste tyres, they are stable and not considered to be a hazardous material. However if there is a fire, tyres generate thick smoke while breaking down into hazardous compounds including gases, heavy metals, and oil.
Tyre fires are rare and BSV is well prepared to prevent them therefore, under normal circumstances, it can be considered that the processing and storages of waste tyres poses a low threat of generating air pollution. Mitigation of the threat of outbreak of a tyre fire on the premises is assured by the implementation of BSV's Site Compliance Plan, which related to the NSW Fire Brigades Policy No. 2 Guidelines for Bulk Storage of Rubber Tyres.
[105]
Finally, the MRA Report contained a "BSV Site Compliance Plan" which included the following:
[106]
BSV is committed to ensuring that the flow of tyres arriving on site for processing is compatible with the maximum number of tyres that can be dealt with in one day to prevent undesirable stockpile build-up. If the number of tyres and/or volume of tyre product are approaching the limits permitted in the EPL (once issued), no further tyres will be accepted on site until shipping containers of reusable, shredded or baled tyres are transported off-site.
[107]
The EPA relied upon the SOAF.
In addition to the SOAF, BSV read the affidavit of Hussein Taleb, BSV's current director, sworn on 5 March 2024 ("Taleb affidavit").
Among other things, Taleb deposed that at no time during the negotiation to purchase BSV nor in the course of his communications with the EPA during the cleanup process was he made aware of the fact that the EPA intended to prosecute the company thereby exposing it to penalties totalling a maximum of $10 million. Understandably, therefore, the proceedings have caused him and his brothers considerable distress given the considerable amount of money they have invested in BSV to date, including on remediating the site.
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.
[110]
Statutory Matters Required to be Taken into Account in Sentencing
[111]
Subsections 21A(2) and (3) of the CSPA sets out aggravating and mitigating factors that the Court must consider. The factors relevant to the facts of this case are:
[112]
21A Aggravating, mitigating and other factors in sentencing
...
(2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows
[113]
...
(d) the offender has a record of previous convictions (particularly if the offender is being sentenced for a serious personal violence offence and has a record of previous convictions for serious personal violence offences),
...
(i) the offence was committed without regard for public safety,
...
The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.
[114]
(3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows-
[115]
(a) the injury, emotional harm, loss or damage caused by the offence was not substantial,
...
(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,
(h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise,
(i) the remorse shown by the offender for the offence, but only if-
[116]
(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),
[117]
...
(k) a plea of guilty by the offender (as provided by section 22 or Division 1A),
...
(m) assistance by the offender to law enforcement authorities (as provided by section 23)...
[118]
For offences created by the POEOA, the Court is also required to consider the matters set out in s 241(1) of that Act:
[119]
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) -
[120]
(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,
...
[121]
(2) The court may take into consideration other matters that it considers relevant.
[122]
A prosecutor carries the onus of proving any aggravating factors beyond reasonable doubt, whereas a defendant must establish mitigating factors on the balance of probabilities (R v Olbrich[1999] HCA 54; (1999) 199 CLR 270 at [27] and Environment Protection Authority v Sydney Water Corporation[2019] NSWLEC 100 at [131]).
The appropriate sentence for BSV is to be determined by an instinctive synthesis of all of the relevant objective and subjective circumstances of the case (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).
[123]
The objective gravity of the offences fixes both the upper and lower limits of proportionate punishment. It fixes the upper limit insofar as the sentence must not exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances (Veen v The Queen (No 2)[1988] HCA 14; (1988) 164 CLR 465 and Hoare v The Queen[1989] HCA 33; (1989) 167 CLR 348 at [354]). It fixes the lower limit because allowance for the subjective factors of the case ought not produce a sentence which fails to reflect the objective gravity or seriousness of the offence (R v Dodd(1991) 57 A Crim R 349 at [354] and R v Nichols(1991) 57 A Crim R 391 at [395]).
The objective gravity of the offence is judged having regard to two principal components: first, the acts or omissions of the offender; and second, the consequences of those acts or omissions (Environment Protection Authority v Baiada Poultry Pty Ltd[2008] NSWLEC 280; (2008) 163 LGERA 71 at [22]).
[124]
The nature and purpose of the statutory provision that has been contravened, and its place in the statutory scheme, are relevant to the determination of the objective seriousness of the commission of an environmental offence (Bentley v BGP Properties Pty Ltd[2006] NSWLEC 34; (2006) 145 LGERA 234 at [168]- [172]).
The relevant objects contained in s 3(a),(d),(e) and (f) of the POEOA identify the purpose of creating the offences with which BSV has been charged.
These objects reinforce the beneficial nature of the statutory framework and the essential role that the regulation of pollution plays in achieving those objects, notably through the promulgation of a licensing regime (Environment Protection Authority v Bartter Enterprises Pty Ltd (No 4)[2021] NSWLEC 45 at [49]- [51]).
There is a need for strict compliance with the conditions imposed by an environmental protection licence. An environmental protection licence is the statutory instrument that sanctions some forms of pollution. It is the price payable for engaging in polluting activity. As such, failure to observe the conditions of authorisation undermines the achievement of the objects of the POEOA (Environment Protection Authority v Orica Australia Pty Ltd (the Nitric Acid Air Lift Incident)[2014] NSWLEC 103; (2014) 206 LGERA 239 at and at ).
[125]
The maximum penalty provided for an offence indicates the seriousness with which Parliament views the commission of the offence (Axer Pty Ltd v Environment Protection Authority(1993) 113 LGERA 357 at 359 and Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority(1993) 32 NSWLR 683 at 698).
BSV is charged with ten breaches of s 64(1) of the POEOA, each of which carry a maximum penalty of $1,000,000 in the case of a corporation.
[126]
BSV's State of Mind at the Time of the Commission of the Offence
[127]
The offences are crimes of strict liability which means that mens rea is not an element of the offence. However, the state of mind of BSV at the time of the commission of the offences is nevertheless relevant in the determination of an appropriate sentence (s 241(2) of the POEOA and Environment Protection Authority v Eveston (No 3)[2022] NSWLEC 128 and Environment Protection Authority v Maules Creek Coal Pty Ltd[2022] NSWLEC 33 at [153]).
A strict liability offence that is committed intentionally, negligently, or recklessly, is objectively more serious than one committed accidentally (Gittany Constructions Pty Ltd v Sutherland Shire Council[2006] NSWLEC 242; (2006) 145 LGERA 189 at [123], Director-General of the Department of Environment and Climate Change v Rae[2009] NSWLEC 137; (2009) 168 LGERA 121 at [42] and Environment Protection Authority v Wollondilly Abattoirs Pty Ltd & Davis[2019] NSWCCA 312 at [72]- ).
[128]
169C Evidence as to state of mind of corporation
(1) Without limiting any other law or practice regarding the admissibility of evidence, evidence that an officer, employee or agent of a corporation (while acting in his or her capacity as such) had, at any particular time, a particular state of mind, is evidence that the corporation had that state of mind.
(2) In this section, the state of mind of a person includes -
(a) the knowledge, intention, opinion, belief or purpose of the person, and
(b) the person's reasons for the intention, opinion, belief or purpose.
[129]
Section 169C of the POEOA is an evidentiary provision which provides that evidence of the state of mind of an officer, employee or agent of a corporation is evidence of the state of mind of the corporation (Wollondilly Abattoirs at [33] and Environment Protection Authority v Aussie Earthmovers Pty Ltd (No 2)[2020] NSWLEC 98 at [39]). Accordingly, the state of mind of Nath, Hamdan and Koufelos is also evidence that BSV had a particular state of mind.
The EPA submitted that BSV committed the offences recklessly. The test for recklessness was set out in Albiston (at [99]):
[130]
99. An offender's conduct will be found to be reckless if he, she or they are put on notice, in the sense that he, she or they believe or suspects, that an act or omission may be unlawful but nevertheless proceeds to engage in it without making further enquiries.
[131]
It contended that Nath's recklessness could be inferred from the following facts:
[132]
(a) at all relevant times BSV was aware of the requirements contained in the licence, the Fire Brigade Policy and the MRA Report. Therefore, BSV knew how many waste tyres ought to be stored at the premises, the correct manner of their storage, and the likely consequences of any improper storage;
(b) Nath was in the outdoor yard of the premises every day, and therefore, he therefore had the opportunity to observe how and where waste tyres were being stored and to note whether their storage was in compliance with the licence;
(c) Nath and Hamdan met with Koufelos every Friday regarding the storage of waste tyres and waste tyre products on the premises. Issues of tyre storage were frequently discussed between Nath, Hamdan and Koufelos;
(d) Hamdan, when bringing tyres onto the premises, would not always weigh tyres at BSV's weighbridge at the premises. This made it difficult for BSV to keep a precise record of the volume of waste tyres and waste tyre products at the premises; and
(e) pursuant to condition O5.1 of the licence, vehicles had to be weighed when they entered and left the premises. If BSV was complying with this condition of the licence, BSV would have been aware of the volume of waste tyres entering the premises for the purposes of the exceedance offence.
[133]
BSV conceded that through the controlling minds of Nath and Hamdan, it acted recklessly in the commission of the offences. I agree and take this factor into account in aggravation (s 241(1) of the POEOA).
[134]
The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offences
[135]
Section 241(1)(a) of the POEOA requires the Court to take into account the extent of the harm caused, or likely to be caused, to the environment by the commission of the offences. Where the harm caused was not substantial, the Court can take this into account as a mitigating factor (s 21A(3)(a) of the CSPA).
The composite term "harm to the environment" is broadly defined in the Dictionary of the POEOA as:
[136]
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.
[137]
The concept of harm in the context of environmental offences extends to both actual and potential harm (Environment Protection Authority v Waste Recycling and Processing Corporation[2006] NSWLEC 419; (2006) 148 LGERA 299 at [145]- [149]).
There is, however, a distinction between actual harm to the environment and harm to the regulatory regime (ACE Demolition & Excavation Pty Ltd v Environment Protection Authority[2024] NSWCCA 4 at [65]). While the former should be considered under s 241(1)(a) of the POEOA, the latter is a relevant factor under s 241(2) of that Act only.
In terms of offences involving the improper storage of waste tyres, the Court has taken into consideration the potential for environmental harm resulting from this unlawful conduct (Environment Protection Authority v Richardson; Environment Protection Authority v Behnfeld[2002] NSWLEC 205 and Environment Protection Authority v Obaid[2005] NSWLEC 171).
The extent of harm caused by the commission of the ten offences was not in dispute. The offences did not cause actual harm to the environment, rather they caused potential harm by reason of the manner in which the waste tyres and waste tyre products were stored on the premises. The potential harm is summarised below:
[138]
(a) in respect of the exceedance offence, the volume of waste tyres and waste tyre products on the premises meant that on 30 March 2022, there was an elevated fire risk and any tyre fire that occurred would be larger and more difficult to extinguish. This also meant that if any fire event occurred, more water would be needed to control and suppress the fire, which would increase the likelihood of soil and groundwater contamination due to runoff from the water being used to extinguish it. This would exacerbate the potential for harm to the environment;
(b) in respect of the height offence, the height of the waste tyres and waste tyre products on the premises meant that on 30 March 2022, any tyre fire that occurred would be more difficult to extinguish due to the "chimney effect" explained above. This would increase the potential for harm to the environment;
(c) in respect of the tread-up offences, the storing of waste tyres and waste tyre products on the premises "tread-up" meant that any tyres that caught alight could roll into other areas of the premises, potentially causing other waste tyres and waste tyre products to catch alight. This would increase the potential for harm to the environment, as outlined immediately below. This meant that on 30 March, 10 May, 31 May and 26 July 2022, the premises were in a state conducive for a tyre fire to spread if it were ignited at the premises; and
(d) in respect of the storage offences, the storing of waste tyres and waste tyre products on the premises in contravention of Figure 5 of the MRA Report meant that on 30 March, 10 May, 31 May and 26 July 2022, any fire on the premises would be more difficult to contain.
[139]
As a consequence of the commission of the offences, the potential harm to the environment that occurred on 30 March, 10 May, 31 May and 26 July 2022, included:
[140]
(a) harm to air quality: as stated above, when tyre fires burn, or when they continue to smoulder following extinguishment, carbon monoxide, sulphur oxides, nitrogen oxides, volatile organic compounds, cyclic aromatic hydrocarbons, hydrogen chloride, benzene, and polychlorinated biphenyls are emitted into the air. Further, a considerable amount of smoke is typically emitted from a tyre fire. The MRA Report described the pollutants released into the air from tyre fires as being "hazardous" and including "gases, heavy metals and oils", stating that such smoke is "thick and includes a large number of toxic gases";
(b) harm to land and waters: when waste tyres or waste tyre products burn, liquids in the form of oil or hydrocarbons are emitted, which can impact the land over which the liquid flows and any waterways that the liquids enter. This oily by-product contains substances including, naphthalene, benzene, anthracene, sulphur compounds, arsenic, and cyanide;
(c) harm to human health: if waste tyres and waste tyre products were to catch fire at the premises this could pose a risk to human health. Those potentially impacted include people working at the premises, people nearby if the fire spreads, and firefighters required to attend the fire. The Fire Brigade Policy indicated that the smoke being released from a tyre fire is "a high hazard to the community, environment and firefighters". Tyre fires can be deadly and those exposed to fires risk burns and serious injuries; and
(d) harm to neighbouring premises: if waste tyres and waste tyre products caught alight at the premises, this could pose a risk to neighbouring properties, which were predominately commercial in nature.
[141]
The EPA submitted that such harm was a real possibility and not merely a remote chance (Newcastle City Council v Pace Farm Egg Products[2002] NSWLEC 66, at [44]).
BSV, while not denying the potential for harm caused by the commission of the offences, submitted that because the offences did not cause actual harm, the harm was not substantial (s 21A(3)(a) of the CSPA).
I am satisfied beyond reasonable doubt that the commission of the offences caused potential harm in the manner set out above. I am further satisfied that the harm caused was not substantial (s 21A(3)(a) of the CSPA).
[142]
Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offences
[143]
Section 241(1)(c) of the POEOA obliges the Court to have regard to the extent to which the offender could reasonably have foreseen the harm caused, or likely to be caused, to the environment.
At all relevant times, BSV, through its directors, was aware of the conditions of the licence, as well as the Fire Brigade Policy and MRA Report. The Fire Brigade Policy set out the fire risks rubber tyres pose and the MRA Report outlined the risks of air pollutants from tyre fires. Both documents stated the importance of the proper storage of tyres to mitigate such risks. BSV was therefore aware of the possibility of potential environmental harm caused by non-compliance with the conditions of the licence. I am therefore satisfied that the potential harm was reasonably foreseeable.
[144]
Practical Measures that Could Have Been Taken to Prevent or Mitigate the Environmental Harm
[145]
Section 241(1)(b) of the POEOA requires the Court to take into account the practical measures that may be taken to prevent, control, abate or mitigate harm to the environment.
The EPA submitted that BSV could have undertaken the following practical measures to mitigate the risk of harm caused by the offences:
[146]
(a) in respect of the exceedance offence, by refusing to accept tyres at the premises in excess of the licence limit. This practical measure was open to BSV and neither the tyre export ban nor the breakdown of the tyre shredding machine were obstacles to this practical measure being implemented;
(b) in respect of the height offence, by directing employees not to stack tyres beyond the limit set by the licence. Again, this measure was open to BSV at all times. Nath met with Hamdan and Koufelos each week regarding the storage of waste tyres and waste tyre products on the premises and was also in the outdoor yard of the premises every day;
(c) in respect of the tread-up offences, by directing employees to not store the tyres that way. As the EPA submitted, this would have been easier to implement had BSV ensured that no more than 150 tonnes of waste tyres were on the premises at any given time; and
(d) in respect of the storage offences, by directing employees to store the tyres correctly on the premises.
[147]
BSV's written submissions did not address practical measures available. I have nevertheless had regard to the SOAF which set out:
[148]
(a) the efforts taken by BSV to bring the premises into compliance with the licence following the commission of the offences (at [26]-[30]); and
(b) the extenuating factors, including the tyre export ban and the broken machine, which limited some of the actions practically available to BSV to prevent the commission of the offences (at [12]-[18]).
[149]
Despite these efforts and extenuating factors, I nevertheless find that there were further steps BSV could have taken to minimise the potential for harm, including refusing to accept waste tyres in excess of its licence limitation and by directing staff to properly store the tyres.
[150]
Control Over the Causes of the Commission of the Offences
[151]
Section 241(1)(d) of the POEOA requires the Court to take into account the extent to which the person who committed the offence had control over the causes that gave rise to it.
The EPA submitted that BSV had control over the causes of each of the offences, because it could exert control over the number of waste tyres that were accepted at the premises and the way in which those waste tyres were stored. Despite the export of waste tyres being regulated between 2020 and 2021, and BSV's machinery breakdown, BSV nevertheless knew that it could not bring more than 150 tonnes of waste tyres to the premises pursuant to condition L2.2 of the licence.
By contrast, BSV submitted that the commission of the offences was wholly attributable to the conduct of Nath, the controlling mind of BSV at the time the offences were committed.
This submission does not assist BSV. The principles of attribution for the statutory liability of a corporation were identified by Pain J in Aussie Earthmovers (No 2) where she stated (at [37] to [38]):
[152]
37 When determining whether the mental state or conduct of a person should be attributed to a corporation, it is necessary to identify the "rules of attribution" (Director General, Department of Education and Training v MT(2006) 67 NSWLR 237; [2006] NSWCA 270 (MT) at [19] (Spigelman CJ, Ipp JA and Hunt AJA agreeing), citing Meridian Global Funds Management Asia Ltd v Securities Commission[1995] UKPC 5; [1995] 2 AC 500 at 506 (Lord Hoffmann); Environment Protection Authority v Wollondilly Abattoirs Pty Limited & Davis[2019] NSWCCA 312 (Wollondilly Abattoirs) at [19] (Brereton JA, Harrison J and Bellew JJ agreeing). In many cases, the conduct of persons in actual control of particular operations of the company will constitute the company for particular statutory purposes (MT at [17]; Wollondilly Abattoirs at [20]). In Tesco Supermarkets Ltd v Nattrass[1971] UKHL 1; [1972] AC 153 (Tesco) at 170 (Lord Reid) cited in Hamilton v Whitehead(1988) 166 CLR 121; [1988] HCA 65 at 127 (Mason CJ, Wilson and Toohey JJ) said that a company may also be liable for an act performed by a person if the person is:
[153]
...acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company.
[154]
38 Where the question is one which involves the statutory liability of a corporation, the terms of the statute are critical to determining whether a person's conduct or state of mind may be attributed to the corporation (Wollondilly Abattoirs at [14]; Commonwealth Bank of Australia v Kojic(2016) 249 FCR 421; [2016] FCAFC 186 (Kojic) at [100] (Edelman J)). Section 169C(1) of the POEO Act provides that "without limiting any other law or practice regarding the admissibility of evidence, evidence that an officer, employee or agent of a corporation (while acting in his or her capacity as such) had, at any particular time, a particular state of mind, is evidence that the corporation had that state of mind". "State of mind" is defined in s 169C(2) to include the "knowledge, intention, opinion, belief or purpose of the person" and "the person's reasons for the intention, opinion, belief or purpose".
[155]
The conduct of Nath, as the directing mind of BSV, constitutes the conduct of BSV. It should further be noted that BSV has been charged with six additional offences with which Nath was not charged. For these reasons I find that BSV had complete control over the commission of the offences (s 241(1)(d) of the POEOA).
[156]
Whether the Offences Were Committed Without Regard to Public Safety
[157]
If an offence is committed without regard to public safety, this serves to aggravate the seriousness of an offence pursuant to s 21A(2)(i) of the CSPA.
The EPA submitted that the offences were committed without regard to public safety because the acceptance of such a large quantity of waste tyres and their improper storage significantly increased the risk of a tyre fire and its attendant harm (Environment Protection Authority v Carbon MF Pty Ltd; Environment Protection Authority v Fair[2023] NSWLEC 120 at [43]- [44]).
I accept the EPA's submission and find that the offences were committed without regard to public safety.
[158]
Conclusion on the Objective Seriousness of the Offending Conduct
[159]
Considering the objective circumstances of the commission of the offences, I find that all ten offences are of low to moderate objective seriousness.
[160]
Pursuant to s 21A(3)(i) of the CSPA, remorse is only a mitigating factor if:
[161]
(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),
[162]
In Waste Recycling Preston J suggested four ways by which an offender may demonstrate genuine contrition and remorse, which are relied upon without repetition (at [204], [210], [212] and [214]).
The EPA accepted that BSV displayed remorse by entering pleas of guilty and by undertaking remediation upon BSV coming under new directorship. The new directors of BSV removed approximately 257.88 tonnes of waste tyres and waste tyre material from the premises as part of cleaning up the premises at a cost of approximately $500,000.
The affidavit of Taleb also sets out additional measures such as:
[163]
(a) engaging Mark Jackson, an environmental consultant, to assist with the remediation of the premises;
(b) corresponding with the EPA and providing updates regarding the sale of the premises; and
(c) undertaking clean-up activities at the premises that the EPA considered to be satisfactory.
[164]
BSV further relied on its compliance with the requirements of the licence over the 18 months since the new directors were appointed as evidence of its contrition and remorse.
I find that BSV's actions, including investing into cleaning up the premises, engaging environmental consultants and cooperating with the EPA, demonstrate its genuine contrition and remorse, which is a mitigating factor in sentencing (s 21A(3)(i) of the CSPA).
[165]
A guilty plea entered at the earliest available opportunity entitles a defendant to the full 25% discount for the utilitarian value of that early plea (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton[2000] NSWCCA 309; (2000) 49 NSWLR 383 at [160]).
BSV conceded that it did not enter a plea at the earliest opportunity, however, that it did so at the "first reasonable opportunity" (Cameron v The Queen[2002] HCA 6; (2002) 209 CLR 339 at 346 [23]- [25]). Prior to entering the pleas, BSV participated in case management processes and negotiations with the EPA to narrow the issues in dispute.
The EPA submitted that BSV's early pleas of guilty are a mitigating factor, however, that they did not come at the earliest opportunity. I agree. The summonses were filed in March 2023, that is after the change in ownership of the company. The first return date was in May 2023 and it was not until November 2023 that the pleas of guilty were entered. This was not at the first reasonable opportunity. I therefore find that BSV is entitled to a 22% discount for its early pleas.
[166]
BSV provided assistance to the EPA in the prosecution of the offences (ss 21A(3)(m) and 23 of the CSPA), including by participating in the preparation of the SOAF. I take this factor in mitigation into account.
In addition to the Court considering BSV's cooperation with the EPA under s 21A(3)(m) of the CSPA and its early pleas under s 21A(3)(k), BSV submitted that it should take into account BSV's "willingness to facilitate the course of justice" as a separate mitigating factor under s 21A(1) of the CSPA. BSV relied on the following principles in support:
(b) the High Court has recognised that a plea of guilty "may be taken into account in mitigation for the reason that a guilty plea evidences a willingness to facilitate the course of justice and not simply because the plea saves the time and expense of those involved in the administration of criminal justice" (citing at [18] and at ). This principle applies in New South Wales (citing ; at ).
[168]
I accept that BSV has demonstrated a "willingness to facilitate the course of justice" through entering early pleas and cooperating with the EPA. However, this willingness has already been taken into account under ss 21A(3)(k), 21A(3)(m), 22 or 23 of the CSPA (Environment Protection Authority v ACE Demolition & Excavation Pty (No 2)[2023] NSWLEC 3 at [199]- [216], Environment Protection Authority v Mouawad (No 2); Environment Protection Authority v Aussie Earthmovers Pty Ltd (No 3)[2020] NSWLEC 166 at [55], Secretary, Department of Planning and Environment v SingTel Optus Pty Ltd[2019] NSWLEC 44 at [114]- [127] and Environment Protection Authority v Edward Gilder[2018] NSWLEC 119 at [155]- [161]).
[169]
BSV has the following prior convictions for environmental offences (s 21A(2)(d) and 21A(3)(e) of the CSPA):
[170]
(a) on 24 November 2021 the Bankstown Local Court convicted BSV of five offences contrary to s 64(1) of the POEOA. These related to BSV's failure to use a weighbridge at the premises in contravention of condition O5.1 of its licence during 2020, and six offences contrary to cl 36(3)(d)(i) of the Protection of the Environment Operations (Waste) Regulation 2014, relating to trucks owned by other companies failing to use the weighbridge at the premises during 2020. The Court fined BSV a total of $22,000 ($2,000 for each offence), ordered BSV to pay the EPA's legal and investigation costs, and ordered BSV to publish a notice in Inside Waste in relation to its commission of the offences ("the November 2021 offences"); and
(b) on 16 June 2021 the Bankstown Local Court convicted BSV of two offences contrary to s 64(1) of the POEOA, relating to contraventions of condition L2.2 and O4.1 of the licence. The Court fined BSV $9,000 for breach of condition L2.2 and $5,000 for breach of condition O4.1, ordered BSV to pay the EPA's legal and investigation costs, and ordered BSV to publish a notice in Inside Waste in relation to the commission of these offences ("the June 2021 offences").
[171]
The penalties were not paid by the previous owners of BSV and were a continuing debt when the new directors took over BSV in November 2022.
The fines and costs relating to the November 2021 offences and June 2021 offences, which totalled $52,316, were paid by the new directors.
BSV submitted that because Nath was the director of BSV at the time of the commission of the November and June 2021 offences, he was the cause of BSV's prior wrongdoing. Accordingly, in circumstances where there has been a change in directorship since the commission of the offences, the rationale for increasing the sentence due to its prior criminal history does not apply (s 21A(5) of the CSPA). BSV relied on Veen to articulate the proper consideration of antecedent criminal history (at 477-478):
[172]
...the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell(1970) AC 642, at p 650. The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties.
[173]
BSV's submission cannot be accepted. The wording of s 21A(2)(d) of the CSPA permits the Court to take into account, as a factor in aggravation, that "the offender has a record of previous convictions". The offender in this case is BSV. BSV has a criminal history that cannot be ignored because there has been a change of directorship since the commission of the offences. It would be antithetical to the purposes of sentencing if a corporation could mitigate their sentence by appointing new directors (s 3A of the CSPA). I therefore accept BSV's prior criminal history as a factor in aggravation (s 21A(2)(d) of the CSPA).
Having said this, I nevertheless take into account the fact that although BSV has antecedents for environmental crime, as a matter of practical reality these crimes were committed under different ownership and by different directors.
[174]
The Good Character of BSV and its Likelihood of Reoffending
[175]
BSV relied on the Taleb affidavit in support of an assertion that it was unlikely to reoffend and had good prospects of rehabilitation. In particular, it emphasised that:
[176]
(a) in October 2022, it appointed new directors;
(b) in November 2022, prior to the charges being laid, it had expended over $500,000 and worked closely with the EPA to bring the premises into compliance with the licence; and
(c) it had engaged Jackson to prepare a management plan to assist it its ongoing compliance with the licence conditions.
[177]
The EPA submitted that it was open to the Court to find that BSV's likelihood of reoffending was low and that it had good prospects of rehabilitation given the actions taken by the new directors of BSV (ss s 21A(3)(g) and 21A(3)(h) of the CSPA, and R v MAK & MSK[2006] NSWCCA 381 at [41]).
The EPA also submitted that it was open to the Court to find that BSV is currently of good character even if it was not of good character at the time of the commission of the offences (s 21A(3)(f) of the CSPA and Lozanovski v R[2006] NSWCCA 143 at [12]).
I agree with both submissions, however, I find that the likelihood of BSV reoffending is not entirely negligible due to its prior convictions (s 21A(3)(g) of the CSPA).
Relying on R v Bredal[2024] NSWCCA 75 (at [83]-[85]), BSV argued that (by analogy), the change in ownership and directors was akin to the voluntary cessation of criminal activity that ought to be taken into account in determining the appropriate sentence to be imposed in these proceedings. As a consequence, less weight was required to be given to both general and specific deterrence as an aspect of punishment.
The penalty imposed by the Court must serve as a general deterrent (Axer at [359]; Camilleri's Stock Feeds at [701] and Bentley at [139]; and see also s 3A(b) of the CSPA). In Environment Protection Authority v Ballina Shire Council(2006) 148 LGERA 278; [2006] NSWLEC 289 Preston J discussed general deterrence in the context of sentencing for environmental crime (at [66]-[68]). Those principles are applied here without repetition.
I accept that embedded in the determination of the appropriate sentence to be imposed on BSV is an element of general deterrence in order to ensure that holders of environment protection licences comply with the attached conditions when undertaking waste management activities. I do not agree that limited weight ought to be given to this aspect of the sentencing process by reason of the change in BSV's directors, which other entities in the waste industry are unlikely to be aware of. The deterrence to be served by punishing BSV is to ensure that others engaged in the waste industry, especially in waste tyre businesses, comply with the terms of any approval governing their industrial activities. It is specific to the company and not to the individual directors.
[179]
The totality principle was recently considered by Duggan J in Natural Resources Access Regulator v Lidokew Pty Ltd[2024] NSWLEC 59 (at [48]-[50] and [52]):
[180]
48 The principle of totality is a relevant sentencing principle in the present case where each of the offences with which the Defendant has been charged and which it has been found guilty arise from the same identical facts and circumstances (albeit with differing error rates for each offence).
59 The principle has been concisely described by the majority of the High Court in Pearce v The Queen[1998] HCA 57; (1998) 194 CLR 610 (Pearce) at 623 as:
[181]
623 To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often those boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just deserts.
[182]
50 Each party also referred me to the statement of the principle expressed by Preston CJ of LEC in Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd[2015] NSWLEC 109 at [142] that:
[183]
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.
[184]
...
52 I also have had regard to the expression of the principle in Ace Demolition & Excavation Pty Ltd v Environment Protection Authority[2024] NSWCCA 4 at [108]- [111] where Leeming JA considered the application of principle of totality in the following manner:
[185]
108 I turn to totality. The primary judge found that the three offences involving Mr Al Sarray's fraudulent provision of information formed part of a single course of conduct, and was satisfied on the balance of probabilities that the fourth offence was carried out by Mr Al Sarray and was part of the same course of conduct: at [89]-[90]. His Honour regarded that finding as favourable to ACE, as is reflected by his application of the civil standard in respect of the fourth offence. I should proceed on the same basis.
109 EPA v Barnes[2006] NSWCCA 246 at [43]- [50] contains an extensive analysis by Kirby J writing for this Court on the applicable principles, confirming that the principle of totality applied to fines. The principle was applied at [50]:
[186]
Here, the fine in respect of count 1 ($4,000) was significantly different from that in respect of count 2 ($500). However, the disparity by itself does not suggest error. Where there are multiple offences, each punishable by a custodial sentence, the totality principle may find expression through the complete or partial accumulation of sentences, or through making all or some of the sentences concurrent (cf Pearce v The Queen[1998] HCA 57; (1998) 194 CLR 610, per McHugh, Hayne and Callinan JJ at 624 (para 45)). However, there is obviously no room for partial accumulation or concurrence in the case of fines. If the sentencing Judge believed that the totality principle required an adjustment to the fines which may otherwise be appropriate, the amount of each fine had to be altered, applying the sentencing principles suggested in Johnson v The Queen[2004] HCA 15; (2004) 205 ALR 346.
The totality principle applies where an offender has committed, and is to be sentenced for, multiple offences. The effect of the totality principle is to require the court in passing 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: Mill v the Queen[1988] HCA 70; (1988) 166 CLR 59 at 62-63; [1998] HCA 70; Pearce v the Queen(1998) 194 CLR 610; [1998] HCA 57 at [49]; Gittany Constructions Pty Ltd v Sutherland Shire Council(2006) 145 LGERA 189; [2006] NSWLEC 242 at [196]. In the case of a sentence of a fine, if the Court believes the totality principle requires an adjustment to the individual fines that would otherwise be appropriate, the amount of each fine can be altered: Environment Protection Authority v Barnes[2006] NSWCCA 246 at [50].
[189]
111 There is the potential for overlap when considering offending which is a "single course of conduct" and applying the principle of totality. As will be seen below, the third offence overlaps with the first, and properly warrants a discount for that reason. In a sense, whether that is an aspect of the offending being part of the same course of conduct, or through the application of totality does not greatly matter. Nonetheless, the principled approach, as applied by Kirby J and Preston CJ of LEC in the passages reproduced above, is to leave questions of totality to the end, and apply a final check of the aggregate against whether it is a just and appropriate punishment for the entire criminality. That is the course I shall follow.
[190]
The EPA conceded that the tread-up and storage offences had a degree of coincidence and overlap such that the totality principle applies. Regarding the interaction between the tread-up and storage offences, and the exceedance and height offences, the EPA submitted that:
[191]
(a) the exceedance offence occurred on 30 March 2022 only. The totality principle has less application because the decision to store a greater volume of tyres at the premises than was permitted is distinct from the method of storage, which is the relevant point of enquiry for the tread-up and storage offences. To the extent that the totality principle does apply between the exceedance offence and the tread-up and storage offences, its application is limited to the fact that the greater the exceedance of the volume of waste tyres that was permitted by the licence, the more difficult it was for BSV to comply with conditions O4.1 and O4.2 of the licence because there was less space to store the waste tyres at the premises; and
(b) the height offence was also committed on 30 March 2022 only. This offence has some overlap with the commission of the exceedance offence insofar as the more tyres present on the premises, the more difficult it was to keep the height of the tyres below the required 3.7 m limit. However, the height offence had limited overlap with the tread-up and storage offences because neither of these offences related to the height that tyres were piled above ground level at the premises.
[192]
I do not accept the EPA's submissions that the totality principle applies in the limited manner set out above. Because the ten offences arise out of the same, common or related conduct at the premises, I find that the totality principle applies to the commission of all of the offences.
[193]
The EPA submitted that the parity principle arose between this prosecution and that of Nath in Environment Protection Authority v Nath[2024] NSWLEC 10. Nath was prosecuted on the basis of his executive liability under s 169 of the POEOA in respect of BSV's contraventions the subject of these proceedings. While BSV and Nath are not strictly co-offenders, the parity principle applies by virtue of the relationship between the offending of BSV and Nath.
The EPA further submitted, however, that the Court should have regard to differences between the objective and subjective factors of the offending of Nath and BSV when applying the parity principle. For instance:
[194]
(a) the maximum penalty for Nath's offending was $250,000 whereas the maximum penalty for BSV is $1,000,000; and
(b) BSV has different subjective features than Nath. For example, Nath received a 25% utilitarian discount for his early plea of guilty, had no prior convictions, his likelihood of reoffending was found to be extremely low, and he was found to be unable to pay a significant monetary penalty due to his financial circumstances.
[195]
The parity principle is concerned with sentencing consistency and equality before the law (Green v The Queen[2011] HCA 49; (2011) 244 CLR 462 at [28]). Sentencing disparity imposed on co-offenders breaches the parity principle (Green at [28]). Because the principle is governed by substance rather than form, it applies not only to co-offenders but also to persons involved in the same criminal enterprise (Green at [30] and Elias v The Queen[2013] HCA 31; (2013) 248 CLR 483 at [30])
Discrepancy or disparity is not simply a question of the imposition of different sentences for the same offence. Rather, it is a question of due proportion between those sentences, that being a matter to be determined having regard to the different circumstances of the co-offenders in question and their different degrees of criminality.
...
...as between co-offenders, different criminal histories and custodial patterns may be such as to justify a real difference in the time each will serve in prison. And, of course, it is necessary when applying the parity principle that like be compared with like. There may be some aspect of one offender's criminal history or custodial situation which has no counterpart in the case of his or her co-accused. If so, it may justify the imposition of a different sentence or the structuring of the sentence in such a way that it results in some difference in the period actually spent in custody...
[197]
I find that the parity principle applies between BSV and Nath. I have regard to the differences between the prosecutions referred to above, mindful, however, of the fact that the issue for the Court on sentence is the criminality disclosed by the offence and not the number of charges (R v Knight[2004] NSWCCA 145 at [25]- [26]). This means that there is no warrant in imposing a greater sentence in these proceedings than in Nath merely because BSV faces more charges. To do otherwise would be contrary to the parity principle.
[198]
The task of the sentencing court is to seek even-handedness in the imposition of a sentence (R v Oliver(1980) 7 A Crim R 174 at [177] and R v Visconti[1982] 2 NSWLR 104 at [107]). Care must be taken in comparing cases where the circumstances of, and facts relating to, the offences may be different (Axer at 365).
The EPA provided to the Court a table of six comparable cases that it submitted were of assistance in ensuring even-handedness in sentencing. These included: Eveston (No 3); Environment Protection Authority v Minto Recycling Pty Ltd[2019] NSWLEC 193; Environment Protection Authority v MA Roche Group Pty Ltd[2015] NSWLEC 29; Nath ; Environment Protection Authority v BSV Tyre Recycling Australia Pty Ltd (Local Court proceedings 2021/00245615, 2021/00245642, 2021/00245655, 2021/00245660, 2021/00245665, 2021/00245683, 2021/00245685, 2021/00245700, 2021/00245714, 2021/00245722 and 2021/00245731); and Environment Protection Authority v BSV Tyre Recycling Australia Pty Ltd (Local Court proceedings number 2021/0096161-2).
I have considered the cases referred to the Court by the EPA in sentencing BSV for the offences that it has committed. I have had particular regard to Nath.
[199]
The EPA sought an order for its professional costs pursuant to s 257B of the Criminal Procedure Act 1986 in the sum of $45,000. BSV agreed to the making of such an order.
In the exercise of its sentencing discretion the Court can take into account any costs payable by the defendant (Environment Protection Authority v Causmag Ore Company Pty Ltd[2015] NSWLEC 58 at [123] and Environment Protection Authority v Barnes[2006] NSWCCA 246 at [78]- [88]).
I have taken the payment of the costs by BSV, which are likely to be substantial, into account in determining the appropriate sentence to be imposed upon it.
[200]
Having regard to the objective seriousness of the offences and the mitigating subjective factors of BSV, together with the penalties imposed in the relevant comparable cases, I find that the imposition of a monetary penalty is warranted for each offence as follows:
[201]
(a) for the exceedance offence a monetary penalty of $40,000;
(b) for the height offence a monetary penalty of $40,000;
(c) for the tread-up offences a monetary penalty of $120,000; and
(d) for the storage offences a monetary penalty of $120,000.
[202]
After the application of the 22% discount for the utilitarian value of the early guilty pleas, the penalty for the commission of each offence is reduced to:
[203]
(a) for the exceedance offence a monetary penalty of $31,200;
(b) for the height offence a monetary penalty of $31,200;
(c) for the tread-up offences a monetary penalty of $93,600; and
(d) for the storage offences a monetary penalty of $93,600.
[204]
Applying the totality principle, the final penalty for the commission of the offences is as follows:
[205]
(a) for the exceedance offence a monetary penalty of $31,200;
(b) for the height offence a monetary penalty of $15,000;
(c) for the tread-up offences a total monetary penalty of $75,000; and
(d) for the storage offences a total monetary penalty of $40,000.
[206]
This brings the combined amount of the monetary penalty to be imposed to $161,200.
There was no suggestion that BSV could not afford to pay a penalty of this magnitude (s 6 of the Fines Act 1996).
[207]
The EPA contended that half of any monetary penalty imposed by the Court ought to be paid to it pursuant to s 122 of the Fines Act. Having regard to all of the circumstances of the case, I find that it is appropriate to make such an order.
[208]
The EPA seeks a publication order pursuant to s 250(1)(a) of the POEOA. The terms of the publication order are set out at annexure 'A' to this judgment.
While BSV accepts that there is a need for general deterrence, it submitted that imposing a publication order would create an unfair burden because:
[209]
(a) BSV has demonstrated remorse and has good prospects of rehabilitation under the new directors;
(b) BSV's new shareholders have spent approximately $500,000 to bring the premises into compliance with its licence and will have to pay the monetary penalty and the costs of these proceedings;
(c) the offending conduct is attributable to Nath, as the controlling mind of BSV at the time of the commission of the offences, who has already been ordered to publicise the same breaches. The purpose of general deterrence has therefore been satisfied by the publication ordered in Nath, which specifically referred to BSV;
(d) the mere fact of the publication of the sentence judgment will serve as a deterrent to others; and
(e) the publication order will impact upon BSV's ability to trade and adversely affect public confidence in the company, despite the fact that those matters arose out of the conduct of Nath and the previous directors. Any commercial implications of the publication are extremely punitive.
[210]
For the following reasons I do not accept BSV's submission that making a publication order would impose an unfair burden on BSV:
[211]
(a) first, because a publication order serves the functions of general deterrence, denunciation and a recognition of the harm caused by the offending conduct (Bartter Enterprises Pty Ltd (No 4) at [105] and Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90 at [76]). That is, the purposes served by the making of a publication order are wider than general deterrence as BSV submitted;
(b) second, Nath has been separately sentenced for his offending conduct, which is different to that of BSV because BSV has been charged with six additional offences and BSV is a corporation. A publication order made against BSV is in different terms and will serve to deter corporations, as opposed to individual directors, from committing environmental offences;
(c) third, I do not accept that the mere fact of publication of this judgment will have a sufficiently deterrent effect. In the age of social media, with the exception of the parties, the judgment is unlikely to be read widely by others; and
(d) fourth, there was no evidence that the making of the order would have an adverse impact on BSV's ability to trade.
[212]
In addition, BSV's offending conduct was not trivial and occasioned considerable potential environmental harm. BSV continues to operate in the waste management industry. These factors weigh heavily in favour of making a publication order. The order reflects the seriousness of BSV's illicit conduct and serves as a deterrent to others.
Nevertheless, at the hearing it was agreed by the parties, and the Court, that if a publication order was made, then its wording should be amended to reflect the fact that the offences were committed by BSV under different directors.
[213]
In conformity with the reasons given above, the Court makes the following orders:
[214]
In proceedings 2023/100401 (the exceedance offence)
[215]
(1) the defendant is convicted of the offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
[216]
(2) the defendant must pay a monetary penalty in the sum of $31,200;
[217]
In proceedings 2023/100402 (the height offence)
[218]
(3) the defendant is convicted of the offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
[219]
(4) the defendant must pay a monetary penalty in the sum of $15,000;
[220]
In proceedings 2023/100403, 100405, 100407 and 100409 (the tread-up offences)
[221]
(5) the defendant is convicted of each offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
[222]
(6) the defendant must pay a monetary penalty in the sum of $18,750 for each offence, for a combined total of $75,000;
[223]
In proceedings 2023/100404, 100406, 100408 and 100410 (the storage offences)
[224]
(7) the defendant is convicted of each offence contrary to s 64(1) of the Protection of the Environment Operations Act 1997 as charged;
[225]
(8) the defendant must pay a monetary penalty in the sum of $10,000 for each offence, for a combined total of $40,000;
[226]
In proceedings 2023/100401-1004010 (all offences)
[227]
(9) pursuant to s 122 of the Fines Act 1996, 50% of the monetary penalty imposed on the defendant is to be paid to the prosecutor as a moiety;
(11) within 28 days of the date of this order or in the next edition, whichever comes first, and pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, the defendant must, at its expense cause a notice in the form of annexure "A" to these orders to be published within the first 12 pages of the following publications, at the size of a quarter of a page:
[230]
(a) The Daily Telegraph; and
(b) Inside Waste;
[231]
(12) within seven days of the date of publications of the notices referred to in order 11, the defendant must provide the prosecutor with a complete copy of the notices as published pursuant to order 11; and
[232]
BSV Tyre Recycling Australia Pty Ltd Convicted and Penalised for Improper Storage of Tyres at its Facility in Revesby, NSW
[233]
BSV Tyre Recycling Australia Pty Ltd ("BSV") has been prosecuted by the Environment Protection Authority ("EPA") for ten offences of contravening an environment protection licence ("licence") that were committed in 2022. The prosecutions were brought because BSV stored waste tyres and waste tyre products in contravention of its licence at its facility in Revesby, NSW. The offences occurred on 30 March, 10 May, 31 May and 26 July 2022, respectively. Since this time, however, BSV has changed ownership. The offences were committed by its previous directors. Moreover, since the change of ownership BSV has complied with the terms of the licence.
[234]
Waste tyres and waste tyre products represent a fire hazard if not stored in a proper manner. If waste tyres and waste tyre products catch alight, they are capable of causing actual harm to the environment. In this case, although no fires occurred, the offences caused potential harm to the environment. This included potential harm to air quality, nearby land and waters, human health, and property on neighbouring premises.
[235]
On 24 June 2024, the Land and Environment Court of NSW convicted BSV of ten offences of contravening an EPL and ordered BSV to:
[236]
(3) cause this notice to be published at its own expense.
[237]
18 October 2024 - Paragraph 59, line 2 - "s 241(1)" deleted and replaced with "s 241(2)"
Parties
Applicant/Plaintiff:
Environment Protection Authority
Respondent/Defendant:
BSV Tyre Recycling Australia Pty Ltd
Legislation Cited (9)
Recycling and Waste Reduction (Export-Waste Tyres) Rules 2021(Cth)
Finally, the MRA Report contained a "BSV Site Compliance Plan" which included the following:
BSV is committed to ensuring that the flow of tyres arriving on site for processing is compatible with the maximum number of tyres that can be dealt with in one day to prevent undesirable stockpile build-up. If the number of tyres and/or volume of tyre product are approaching the limits permitted in the EPL (once issued), no further tyres will be accepted on site until shipping containers of reusable, shredded or baled tyres are transported off-site.
A prosecutor carries the onus of proving any aggravating factors beyond reasonable doubt, whereas a defendant must establish mitigating factors on the balance of probabilities (R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at [27] and Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100 at [131]).
The appropriate sentence for BSV is to be determined by an instinctive synthesis of all of the relevant objective and subjective circumstances of the case (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).
It contended that Nath's recklessness could be inferred from the following facts:
1. at all relevant times BSV was aware of the requirements contained in the licence, the Fire Brigade Policy and the MRA Report. Therefore, BSV knew how many waste tyres ought to be stored at the premises, the correct manner of their storage, and the likely consequences of any improper storage;
2. Nath was in the outdoor yard of the premises every day, and therefore, he therefore had the opportunity to observe how and where waste tyres were being stored and to note whether their storage was in compliance with the licence;
3. Nath and Hamdan met with Koufelos every Friday regarding the storage of waste tyres and waste tyre products on the premises. Issues of tyre storage were frequently discussed between Nath, Hamdan and Koufelos;
4. Hamdan, when bringing tyres onto the premises, would not always weigh tyres at BSV's weighbridge at the premises. This made it difficult for BSV to keep a precise record of the volume of waste tyres and waste tyre products at the premises; and
5. pursuant to condition O5.1 of the licence, vehicles had to be weighed when they entered and left the premises. If BSV was complying with this condition of the licence, BSV would have been aware of the volume of waste tyres entering the premises for the purposes of the exceedance offence.
BSV conceded that through the controlling minds of Nath and Hamdan, it acted recklessly in the commission of the offences. I agree and take this factor into account in aggravation (s 241(1) of the POEOA).
As a consequence of the commission of the offences, the potential harm to the environment that occurred on 30 March, 10 May, 31 May and 26 July 2022, included:
1. harm to air quality: as stated above, when tyre fires burn, or when they continue to smoulder following extinguishment, carbon monoxide, sulphur oxides, nitrogen oxides, volatile organic compounds, cyclic aromatic hydrocarbons, hydrogen chloride, benzene, and polychlorinated biphenyls are emitted into the air. Further, a considerable amount of smoke is typically emitted from a tyre fire. The MRA Report described the pollutants released into the air from tyre fires as being "hazardous" and including "gases, heavy metals and oils", stating that such smoke is "thick and includes a large number of toxic gases";
2. harm to land and waters: when waste tyres or waste tyre products burn, liquids in the form of oil or hydrocarbons are emitted, which can impact the land over which the liquid flows and any waterways that the liquids enter. This oily by-product contains substances including, naphthalene, benzene, anthracene, sulphur compounds, arsenic, and cyanide;
3. harm to human health: if waste tyres and waste tyre products were to catch fire at the premises this could pose a risk to human health. Those potentially impacted include people working at the premises, people nearby if the fire spreads, and firefighters required to attend the fire. The Fire Brigade Policy indicated that the smoke being released from a tyre fire is "a high hazard to the community, environment and firefighters". Tyre fires can be deadly and those exposed to fires risk burns and serious injuries; and
4. harm to neighbouring premises: if waste tyres and waste tyre products caught alight at the premises, this could pose a risk to neighbouring properties, which were predominately commercial in nature.
The EPA submitted that such harm was a real possibility and not merely a remote chance (Newcastle City Council v Pace Farm Egg Products [2002] NSWLEC 66, at [44]).
BSV, while not denying the potential for harm caused by the commission of the offences, submitted that because the offences did not cause actual harm, the harm was not substantial (s 21A(3)(a) of the CSPA).
I am satisfied beyond reasonable doubt that the commission of the offences caused potential harm in the manner set out above. I am further satisfied that the harm caused was not substantial (s 21A(3)(a) of the CSPA).
The conduct of Nath, as the directing mind of BSV, constitutes the conduct of BSV. It should further be noted that BSV has been charged with six additional offences with which Nath was not charged. For these reasons I find that BSV had complete control over the commission of the offences (s 241(1)(d) of the POEOA).
BSV's submission cannot be accepted. The wording of s 21A(2)(d) of the CSPA permits the Court to take into account, as a factor in aggravation, that "the offender has a record of previous convictions". The offender in this case is BSV. BSV has a criminal history that cannot be ignored because there has been a change of directorship since the commission of the offences. It would be antithetical to the purposes of sentencing if a corporation could mitigate their sentence by appointing new directors (s 3A of the CSPA). I therefore accept BSV's prior criminal history as a factor in aggravation (s 21A(2)(d) of the CSPA).
Having said this, I nevertheless take into account the fact that although BSV has antecedents for environmental crime, as a matter of practical reality these crimes were committed under different ownership and by different directors.
Finally, the Court must impose a sentence that achieves the purposes of denouncing the conduct the subject of the offences and making BSV accountable for its actions.
The EPA conceded that the tread-up and storage offences had a degree of coincidence and overlap such that the totality principle applies. Regarding the interaction between the tread-up and storage offences, and the exceedance and height offences, the EPA submitted that:
1. the exceedance offence occurred on 30 March 2022 only. The totality principle has less application because the decision to store a greater volume of tyres at the premises than was permitted is distinct from the method of storage, which is the relevant point of enquiry for the tread-up and storage offences. To the extent that the totality principle does apply between the exceedance offence and the tread-up and storage offences, its application is limited to the fact that the greater the exceedance of the volume of waste tyres that was permitted by the licence, the more difficult it was for BSV to comply with conditions O4.1 and O4.2 of the licence because there was less space to store the waste tyres at the premises; and
2. the height offence was also committed on 30 March 2022 only. This offence has some overlap with the commission of the exceedance offence insofar as the more tyres present on the premises, the more difficult it was to keep the height of the tyres below the required 3.7 m limit. However, the height offence had limited overlap with the tread-up and storage offences because neither of these offences related to the height that tyres were piled above ground level at the premises.
I do not accept the EPA's submissions that the totality principle applies in the limited manner set out above. Because the ten offences arise out of the same, common or related conduct at the premises, I find that the totality principle applies to the commission of all of the offences.
I find that the parity principle applies between BSV and Nath. I have regard to the differences between the prosecutions referred to above, mindful, however, of the fact that the issue for the Court on sentence is the criminality disclosed by the offence and not the number of charges (R v Knight [2004] NSWCCA 145 at [25]-[26]). This means that there is no warrant in imposing a greater sentence in these proceedings than in Nath merely because BSV faces more charges. To do otherwise would be contrary to the parity principle.
In addition, BSV's offending conduct was not trivial and occasioned considerable potential environmental harm. BSV continues to operate in the waste management industry. These factors weigh heavily in favour of making a publication order. The order reflects the seriousness of BSV's illicit conduct and serves as a deterrent to others.
Nevertheless, at the hearing it was agreed by the parties, and the Court, that if a publication order was made, then its wording should be amended to reflect the fact that the offences were committed by BSV under different directors.
The storage of waste, including waste tyres, contrary to the licence undermined the regulatory scheme as it relates to waste generally, and more specifically, to tyre waste (Environment Protection Authority v Albiston[2020] NSWLEC 80 at [76]). It also risked harm to the environment.
The POEOA does not contain an offence that has mens rea as an element of it in respect of a contravention of an environment protection licence. Accordingly, the principle in The Queen v De Simoni[1981] HCA 31; (1981) 147 CLR 383 does not arise.
In relation to specific deterrence (s 3A(b) of the CSPA), the EPA submitted that specific deterrence is necessary because BSV has prior convictions (Veen at 477, R v Abboud[2005] NSWCCA 251 at [33] and R v McNaughton[2006] NSWCCA 242; (2006) 66 NSWLR 566 at [54]), and has previously displayed an attitude of disobedience toward, and disregard for, environment protection legislation. Further, BSV continues to hold the licence and will continue to be involved in the waste tyre industry.
There is some force to this submission. BSV has now committed 23 environmental offences. The penalty imposed upon BSV must serve to ensure that all future waste related activities carried out by it are in compliance with its licence. But having said this, I also accept that the change in directors means that less weight should be accorded to this factor than would otherwise be the case. The new directors have, through their actions in remediating the site and implementing practical measures to ensure that no further offences are committed, demonstrated a willingness to comply with the terms of BSV's licence.
Finally, the Court must impose a sentence that achieves the purposes of denouncing the conduct the subject of the offences and making BSV accountable for its actions.