Environment Protection Authority v Carbon MF Pty Ltd; Environment Protection Authority v Fair

Facts

1. The parties rely upon a Statement of Agreed Facts (SOAF) filed 2 August 2023 identifying those facts admitted by the Defendants (Exhibit A). The most relevant facts are extracted below.
2. Each of the offences relate to the placing of over 28,000 waste tyres on the Land from 21 January 2022 to 28 February 2023 and failing to clean up those tyres after being required to do so by the EPA.
3. Carbon MF has leased warehouse 1A on the Land since 1 February 2021 (the Premises). The lease sets out the permitted uses of the Premises as processing, recycling and storage of rubber tyres. Additionally, Carbon MF has exclusive use of the yard area directly outside the warehouse to be used for carparking.
4. Carbon MF obtained development consent from Albury Council in 2020 for tyre processing and storage on the Premises provided the combined storage of product on site (awaiting processing or after processing) did not exceed a total of 5 tonnes of waste tyres, 500 waste tyres or 50 cubic metres of waste tyres.
5. Carbon MF operated a business at the Premises and charged to receive waste tyres from businesses around Albury and the surrounding area for less than the cost of lawful disposal of waste tyres at a landfill. Carbon MF stores the tyres at the Premises until such time they are processed to the extent necessary for the recycled tyre material to be on-sold for re-use, or for the tyres to be otherwise disposed of at a place that could lawfully receive the tyres.
6. During the period from 1 February 2021 to 21 January 2022, Carbon MF was paid over $303,639.35 to receive over 22,000 4WD tyres, over 45,000 car tyres, and over 12,000 truck tyres.
7. On 21 January 2022, EPA officers attended the Premises and observed thousands of waste tyres piled inside the warehouse and in the yard adjacent to warehouse 1A.
8. On 3 February 2022, EPA officers attended the Premises with a representative of Fire and Rescue NSW. At the Premises: 1. An LPG gas filling station was on the neighbouring property. There was only a chain fence separating it from the tyres. This posed a high fire risk; 2. Within warehouse 1A there was a tyre shredder. Around the shredder there were lots of off cuts and small shredded rubber on the floor and close to the moving parts of the shredder. This posed a fire risk due to the risk that fragments could jam the shredder, and friction and heat cause ignition. The tyre shredder had an internal sprinkler mechanism; and 3. In one area inside warehouse 1A, tyres were within close proximity to welding and grinding equipment. The proximity of the tyres to where welding or grinding was taking place posed a significant risk because welding and grinding generates sparks which could ignite a fire.
9. On 9 February 2022, EPA officers attended the Premises with a volumetric surveyor. It was determined that there was a volume of 6,543 cubic metres of tyres at the Premises, equivalent to more than 184.26 tonnes and 23,000 tyres.
10. On 15 February 2022, the EPA sent Carbon MF a draft clean-up notice requiring the removal of tyres from the Land.
11. On 25 February 2022, an EPA officer spoke to Mr Fair by telephone to confirm Mr Fair had received the draft clean-up notice, was aware of the requirements, and to discuss the time required for compliance with the notice. Mr Fair stated he could comply with the notice by the end of April.
12. On 1 March 2022, the clean-up notice was issued to Carbon MF requiring the number of tyres stored at the Premises be reduced to below 500 whole tyres by 5:00pm on 31 May 2022.
13. During May 2022, tyres continued to be delivered to the Premises.
14. On 9 June 2022, EPA officers attended the Premises with a volumetric surveyor. It was determined that there was 8,125 cubic metres of waste tyres at the Premises, equating to over 224.64 tonnes and 28,000 tyres. The tyres stored at the Premises had increased in number by approximately 5,000 since the clean-up notice was issued.
15. On 17 June 2022, the EPA issued a clean-up notice to Mr Fair that required him to restrict access to the Premises, while continuing to allow tyres to be removed.
16. On 16 May 2023, the EPA issued a variation to the clean-up notice requiring access to the Premises to be further restricted to ensure no person could enter the Premises to dispose of waste tyres. Mr Fair and Carbon MF were unable to enter the Premises while access was restricted.

Environmental harm

1. Any place where tyres are stored is a fire risk because alight tyres are extremely difficult to extinguish.
2. Burning tyres result in a very hot fire and a thick dark smoke, both of which are a high hazard to the community, the environment and firefighters.
3. The tyres at the Premises were not stored in a way consistent with the guidance in the Fire and Rescue NSW publication Fire Safety Guideline: Guideline for Bulk Storage of Rubber Tyres (the Guideline) because: 1. The external tyre storage site was not clear of all rubbish and combustible materials (see 6.1 of the Guideline); 2. More than 4 individual tyre stacks were grouped into stack piles (see 6.2 of the Guideline); 3. Stacks of tyres were not separated at the base by a minimum of 2.5m (see 6.2 of the Guideline); 4. There was no minimum clear separation of 18m maintained between each stack pile of tyres (see 6.2 of the Guideline); 5. Tyre stacks were not at least 18m from any boundary or building (see 6.3 of the Guideline); and 6. There was no sprinkler system in warehouse 1A at the Premises and the tyres inside warehouse 1A did not have a minimum clearance of 3m between tyre stacks and between tyres and the building walls (see 7.2 of the Guideline).
4. The failure to store tyres in accordance with the Guideline means any fire would be much more difficult to extinguish, and therefore pose a greater risk.
5. Due to the number of tyres at the Premises and the way the tyres were stored, if there was fire at the Premises, there would be extensive smoke. The Premises is directly next to Albury Airport. Tyre fires generate thick, black, acrid smoke that would block the view of planes entering and leaving the airport. In the event of a fire at the Premises, Albury Airport could need to be closed down. Tyre fire smoke is highly toxic if inhaled so any fire would pose a risk to the community.
6. Putting out tyre fires requires large volumes of water and generates runoff contaminated with firefighting foam concentrates, rubber and contaminants from the tyres which are all toxic to aquatic life. The Premises is located next to a creek that flows into the Murray River. There is a significant risk any contaminated runoff would enter the nearby creek and the Murray River.
7. Depending on the scale of any fire at the Premises, hundreds of thousands of litres of water and multiple days of firefighting effort could be required to extinguish it.
8. The Defendants could have taken practical steps to avoid the risk of environmental harm at the Premises, including by lawfully disposing of the tyres stored at the Premises.

Statutory provisions

1. At the time of the offence, the relevant statutory provisions of the POEO Act creating the offences were: 1. The Clean-up Notice Offence: 91B Offence A person who, without reasonable excuse, does not comply with a clean-up notice given to the person is guilty of an offence. Maximum penalty - (a) for a corporation - $1,000,000 and, for a continuing offence, a further penalty of $120,000 for each day the offence continues, or (b) for an individual - $250,000 and, for a continuing offence, a further penalty of $60,000 for each day the offence continues. 1. The Pollution of Land Offence: 142A Pollution of land (1) A person who pollutes land is guilty of an offence. Maximum penalty - (a) in the case of a corporation - $2,000,000 (if the offence involves asbestos waste) or $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 - $500,000 (if the offence involves asbestos waste) or $250,000, and in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues. 1. The Special Executive Liability Offence: 169 Liability of directors etc for offences by corporation - offences attracting special executive liability (1) If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that - (a) (Repealed) (b) the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (c) the person, if in such a position, used all due diligence to prevent the contravention by the corporation. (1A) For the purposes of this section, each of the following provisions attract special executive liability - … (n) section 142A (1), … 1. The Executive Liability Offence: 169A Liability of directors etc for offences by corporation - offences attracting executive liability generally (1) For the purposes of this section, an executive liability offence is an offence against any of the following provisions of this Act that is committed by a corporation - … (d) section 91B, … (2) A person commits an offence against this section if - (a) a corporation commits an executive liability offence, and (b) the person is - (i) a director of the corporation, or (ii) an individual who is involved in the management of the corporation and who is in a position to influence the conduct of the corporation in relation to the commission of the executive liability offence, and (c) the person - (i) knows or ought reasonably to know that the executive liability offence (or an offence of the same type) would be or is being committed, and (ii) fails to take all reasonable steps to prevent or stop the commission of that offence. Maximum penalty - The maximum penalty for the executive liability offence if committed by an individual.

The purposes of sentencing

1. The purposes of sentencing are contained at s 3A of the Crimes (Sentencing and Procedure) Act 1999 (NSW) (CSP Act) as follows: 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows - (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community.

Statutory matters required to be taken into account in sentencing

1. For the purposes of sentencing in this matter the following factors as provided for in s 21A of the CSP Act are relevant: 21A Aggravating, mitigating and other factors in sentencing (1) General In determining the appropriate sentence for an offence, the court is to take into account the following matters - (a) the aggravating factors referred to in subsection (2) that are relevant and known to the court, (b) the mitigating factors referred to in subsection (3) that are relevant and known to the court, (c) any other objective or subjective factor that affects the relative seriousness of the offence. The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law. … (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), … (g) the injury, emotional harm, loss or damage caused by the offence was substantial, … (i) the offence was committed without regard for public safety, … (o) the offence was committed for financial gain, … 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, … (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), … (4) The court is not to have regard to any such aggravating or mitigating factor in sentencing if it would be contrary to any Act or rule of law to do so. (5) The fact that any such aggravating or mitigating factor is relevant and known to the court does not require the court to increase or reduce the sentence for the offence.
2. In addition, the provisions of s 241 of the POEO Act require the following relevant matters to be considered in sentencing: 241 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. (2) The court may take into consideration other matters that it considers relevant.
3. It is to be noted that where the Prosecutor contends that a particular sentencing consideration should be treated as an aggravating factor it must establish by evidence, beyond a reasonable doubt the presence of such aggravating factor. Where the Defendants contend for the presence of a mitigating factor, it must be established on the balance of probabilities: Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100 at [131].

Objective seriousness of offences

1. The determination of an appropriate sentence is to be undertaken bearing in mind that: A sentence should never exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its subjective circumstances: Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234 at [162].
2. The primary factor to be considered in sentencing is the objective seriousness of the offences. The objective seriousness of the offence fixes both the upper and lower limits of proportionate punishment: the upper, as a sentence should never exceed that which can be identified as proportionate to the gravity of the particular crime; and the lower, as an allowance for the subjective considerations can never produce a punishment that does not reflect the objective seriousness of the offence: Environment Protection Authority v Waste Recycling and Processing Corporation (2006) 148 LGERA 299 at [139]-[140].
3. The objective gravity of the offence is to be judged by two principal components: the precise acts or omissions of the offender; and, the consequences of those acts or omissions: Environment Protection Authority v Baiada Poultry Pty Ltd (2008) 163 LGERA 71 at [22].

Nature of offences and maximum penalty

1. The provisions of the POEO Act that, for the purposes of the consideration of sentence in these proceedings, relevantly includes as its stated objects: 3 Objects of Act The objects of this Act are as follows: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, … (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, (f) to improve the efficiency of administration of the environment protection legislation, …
2. These relevant objects reinforce the public protective nature of the legislative regime and the essential role that the regulation of pollution - through the licensing regime and the prohibition on nominated types of pollution outside that regime (such as the pollution of land) - plays in achieving those objects.
3. As to Carbon MF each of the two offences are strict liability offences and carry the maximum penalty for a corporation of $1,000,000: s 91B and 142A of the POEO Act. There is also a daily penalty in connection with each offence. The strict liability nature of the offence and the quantum of the maximum penalty are indicators of the public expression by Parliament of the seriousness of the offence and the gravity of the offences as perceived by the community: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 359 (Axer); Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698.
4. As to Mr Fair he is liable for each of the offences as if charged as an individual which carry the maximum penalty of $250,000 under s 91B and $500,000 under s 142A together with a daily penalty for each offence. As the charges against Mr Fair are on the basis of special executive liability, the offences are not strict liability but require proof of knowledge.

The extent of the harm caused or likely to be caused to the environment by the commission of the offence: s 241(1)(a) of the POEO Act

1. The POEO Act contains in the dictionary the following relevant definitions for a consideration of this aspect of sentencing: 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. environment means components of the earth, including: (a) land, air and water, and (b) any layer of the atmosphere, and (c) any organic or inorganic matter and any living organism, and (d) human-made or modified structures and areas, and includes interacting natural ecosystems that include components referred to in paragraphs (a)-(c).
2. These defined terms raise wide ranging considerations relating to this aspect of sentencing.
3. In this case, there is no evidence of actual harm. The evidence does disclose a real risk of potential harm. That risk arose from the placement and maintenance of the tyres upon the Land having regard to the quantum of tyres together with the location of their placement.
4. As was observed in the SOAF at [19]-[26] the risk of environmental harm in the event of fire was real and substantial. The proximity of fire sources such as the LPG gas filling station on the neighbouring property and the tyre shredding device and the location of the welding and grinding activities both increased the likely risk of harm. The proximity of an adjoining waterway that flows to the Murray River also gave rise to the risk that the harm from fire suppression efforts would escape the boundaries of the Land thereby being likely to cause harm to adjoining land and the environment.
5. Further, the Prosecutor contended that the offences were committed without regard for public safety - having regard to the nature of the potential risk and risk to the public and the environment. Such is an aggravating feature as provided for in s 21A(2)(i) of the CSP Act.
6. In light of the volume of the tyres stored and the risk of fire and the consequences in the event of fire I am satisfied beyond reasonable doubt that the offences were committed without regard to public safety and that such is an aggravating feature of the offending conduct. The evidence discloses that there appears to have been no conscious or other regard had to the risks associated with the collection and storage of the tyres or the capacity for fire to be managed or firefighting to be efficiently and safely undertaken in the event of ignition.

Reasons for committing the offence and state of mind of the offender

1. Each of the offences with which Carbon MF is charged are strict liability offences. The state of mind of the offender, having regard to the nature of these charges, is not a matter that increases the objective seriousness of the offences.
2. However, where a strict liability offence is committed negligently, intentionally or recklessly it will be more objectively serious than one that is not: Plath v Rawson (2009) 170 LGERA 253 at [98]. In this case, I find that the commission of the offences was deliberate. Firstly, the Defendants were the subject of a condition imposed upon the development consent that limited the number of tyres to a level below which it would not have been in breach of the land pollution controls in the POEO Act. Second, the Defendants had control of the Premises and had to consent to the bringing of tyres on to the Land. Therefore, the Defendants could not be unaware of the number and storage of the tyres at any given time and notwithstanding continued to accept delivery of tyres.
3. Each Defendant, through the admission of Mr Fair, was aware of the requirements of a draft clean-up notice that made clear and apparent the extent and nature of the breaches alleged and no action was taken to comply at that time.
4. As to the failure to comply with the clean-up notice (once served) again, there is no suggestion that the Defendants were unaware of its requirements and the obligation to comply. No steps were taken to comply with the clean-up notice, and a delivery of a further 5,000 tyres was taken by the Defendants after service of the clean-up notice.

The offence committed for financial gain - s 21A(2)(o) of the CSP Act

1. The Prosecutor submitted that the fact that the Defendants took delivery of and stored the volume of tyres was for financial gain and this was an aggravating feature of the offending conduct. The Defendants submitted that they were merely conducting a commercial enterprise and the offending did not result in a financial windfall.
2. I accept that the Defendants were motivated to accept the volume of tyres to achieve financial reward greater than would have been obtained if the offending conduct had not been committed. Such is an aggravating feature of the offending conduct and adds to the objective seriousness.

Reasonable foreseeability of the harm caused or likely to be caused by the commission of the offences

1. As identified in the SOAF the foreseeability of ignition of the tyres and the existence of ignition sources were matters with which the Defendants were or should have been familiar. The risk of ignition and the consequence of fire was foreseeable, as were the consequences in the event of fire.

Control over causes

1. The Defendants had control over the Land and the receipt of tyres thereon. The manner of storage and the numbers of tyres on the Land at any given time was solely in the control of the Defendants.

Conclusions on objective seriousness

1. For the reasons outlined above, I accept the submissions of both parties that the objective seriousness of each of the offences were within the mid-range of objective seriousness.

Contrition and remorse - s 21A(3)(i) of the CSP Act

1. Neither Defendant has made an expression of contrition or remorse. Mr Fair provided affidavit evidence and oral evidence in the proceedings. On neither opportunity did Mr Fair, either on his own behalf or on behalf of the company, express contrition in connection with the commission of the offences.
2. Further, the actions of the Defendants after becoming aware of the actions of the EPA in connection with the investigation did not take any action that could be considered reflective of contrition.
3. Mr Fair submitted that he had attempted to take action after the service of the clean-up notice but he had been prevented from entering the Premises. The fact that the Defendants were prevented access to the Premises was a consequence of the breaches and not a reason for the breach. I do not consider that the late attempts to take action demonstrates a real understanding of the nature of the offences sufficient for this factor to evidence any real contrition or remorse.
4. Accordingly, I do not consider that there is evidence of contrition such that I would take it into account in respect of either Defendant in the mitigation.

Assistance to EPA - s 21A(3)(m) and s 23 of the CSP Act

1. The evidence discloses that the Defendants have provided a degree of assistance to the EPA both during the investigation and in the preparation of a comprehensive statement of facts relating to these pleas of guilty. I will take such matters into account in the determination of the appropriate sentence in these matters.

Early plea of guilty - s 22 and s 21A(3)(k) of the CSP Act

1. In this matter, pleas of guilty were entered at the first reasonable opportunity. The Prosecutor and the Defendants both submit that a discount at the higher end of the range available for the utilitarian value of the early plea should be afforded to the Defendant in each proceeding. I accept this submission and will apply the full 25% discount for the early guilty pleas.

Prior convictions - s 21A(2)(d) of the CSP Act

1. The Defendants have no prior convictions for environmental offences.
2. Mr Fair has three prior convictions: one dated 1999 for behaving in an offensive manner (fine of $150 imposed) and two dated 2004 for assault and assault occasioning actual bodily harm (fine of $250 and $400 imposed respectively).
3. The prior convictions of Mr Fair are of a nature and type that I do not consider them as aggravating the circumstances of this case. I further note that the convictions were a considerable time ago such that the existence of the convictions has no impact upon my consideration of an appropriate sentence in this case.

Deterrence retribution and denunciation

1. The Prosecutor submitted that the offending conduct by each Defendant indicated a need for both general and specific deterrence. It noted that general deterrence is an important factor in environmental crime to ensure that others are encouraged to comply with the law and to ensure that the environment is not exposed to risk of harm. In the circumstances of this case, I accept the need for general deterrence.
2. As to specific deterrence the Prosecutor submitted that the Defendants' conduct was deliberate and intentional. There was no question that they were aware of the 500 waste tyre limitation in the development consent and were aware of the requirements of the clean-up notice. Mr Fair knew that bringing in thousands of waste tyres and storing them on the Land was wrong. The Defendants simply ignored the requirements of the clean-up notice and, instead, elected to receive more waste tyres after it was issued.
3. Whilst I acknowledge that the Defendants have not been charged with a breach of the development consent, I accept that the presence of the condition limiting the number of tyres on the Land was the same quantum as would have ensured that land pollution did not occur. If the condition had been met these offences would not have been committed. The knowledge of the need to limit tyre numbers was clear and apparent. However, the evidence discloses that it is extremely unlikely that either Defendant will engage in waste management of this type where they are in a position to offend again. Mr Fair has been declared bankrupt and if he is to gain any income it is likely to be as an employee rather than a manger of such facility. The company is likely to be wound up and holds no material assets. For those reasons, I do not consider that there is a need for specific deterrence.

Consistency in decision-making

1. The principle of even-handedness requires that the Court consider if there is any sentencing pattern for like offences in order to ensure that there is a consistent approach to penalty. This approach, however, must also acknowledge that care must be taken in comparing cases where the circumstances of and facts relating to the offences may be quite different: R v Visconti [1982] 2 NSWLR 104; Axer at 365.
2. Neither the Prosecutor nor the Defendants were able to identify any prior decision that was sufficiently similar to the nature of the offences charged to permit a finding that there was a sentencing pattern that should be considered in the determination of sentence in these matters.

Legal costs and investigative costs

1. The Defendants have agreed to pay the Prosecutor's legal costs for these proceedings in an amount to be agreed or assessed. The payment of legal costs is a relevant consideration in determining the quantum of any penalty: Environment Protection Authority v Barnes [2006] NSWCCA 246 at [88]. In this case, however, as the Defendants have not agreed on a fixed sum and there is no evidence indicating the likely liability for any cost order I am unable to meaningfully take this factor into account, I will however, take into consideration the agreement to pay costs.
2. The Defendants have also agreed to pay the EPA's investigative costs pursuant to s 248 of the POEO Act in the amount of $33,228.55. I will also take this factor into account in determining the appropriate penalty and will make an appropriate order for payment.

Totality principle

1. The principle of totality is a relevant sentencing principle in the present case where both offences with which each of the Defendants have been charged and which they have pleaded guilty arise from the same identical facts and circumstances.
2. The principle has been concisely described by the majority of the High Court in Pearce v The Queen (1998) 194 CLR 610 at 623 as: 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.
3. The Prosecutor submitted that the principle of totality applied in determining the appropriate penalty as between the corporate defendant and the individual defendant - as the circumstances that give rise to the individual defendant's liability arise directly from the actions of the corporate defendant. However, the circumstances as between the two charges for each defendant were not sufficiently similar as to warrant the application of the principle.
4. I accept the Prosecutor's submission that the principle of totality applies as it relates to the two Defendants. As the individual defendant's liability springs from the conduct of the corporate defendant I consider that the sentencing of the individual defendant should be reduced to take into account the principle of totality.
5. I also accept the Prosecutor's submission that the principle of totality does not apply to the two offences for which each Defendant has been charged. The offence relating to the failure to comply with the clean-up notice does relate to the storage of tyres the subject of the Pollution of Land Offence, however, the criminal conduct of the two charges is different. The first related to the placement of the tyres, the second related to a failure to comply with a lawfully given notice. The subject matter and nature of the offence are not sufficient to overlap in the sense anticipated in the principle of totality.

Fines Act - capacity to pay

1. Section 6 of the Fines Act 1996 (NSW) (Fines Act) provides: 6 Consideration of accused's means to pay In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider - (a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and (b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount.
2. The Defendants adduced evidence as to their capacity to pay a fine by way of an affidavit sworn by Mr Fair and additional oral evidence adduced to supplement the affidavit. The affidavit evidence attested that: 1. The mortgagee of Mr Fair's residential home, Strive Financial Pty Limited, was exercising its power of sale based upon a debt to them of $136,045.57; 2. In addition to the mortgage referred to in (1), Mr Fair also has a mortgage over the same property to BankWest; 3. Mr Fair was declared bankrupt on 1 August 2023. The Creditor's petition to which the Bankruptcy related was a debt due to Scottpac in the sum of $240,439.58; 4. Mr Fair had not yet completed his obligations to the Trustee in Bankruptcy relating to the provision of information relating to his financial position but was in the process of compliance; 5. Mr Fair was currently unemployed and had no income stream. Whilst he had experience in the waste trade and in the past had been employed in that industry at present, he had no expectation of employment in the short term and did not know what the future would bring; 6. On 22 August 2023, Carbon MF was served with a Winding Up application as a consequence of a failure to comply with a statutory demand in the amount of $42,313.09. The company has also received a further demand from another creditor for payment of a debt in the amount of $31,025.43 which is disputed but the dispute has not yet been resolved; and 7. Mr Fair attested that the company is not in a position to contest the winding up of the company. He identified in oral evidence the costs that the company incurred in shredding the tyres and did not believe the company had any capacity to trade out of the debt and that it did not have sufficient assets to meet its outstanding debts.
3. The primary submissions made by the Defendants related to the capacity to pay. As to Mr Fair, it was submitted that any fine would continue as an obligation notwithstanding the bankruptcy. As to Carbon MF, if it was wound up, any fine would not have priority but would rank with other creditors and was therefore unlikely to be paid.
4. The Defendants submitted that, on the basis of the evidence adduced, the Court would be satisfied that neither Defendant had any capacity to pay and that any fine should be "a downward adjustment to the individual fines that may otherwise be deemed appropriate by the Court…".
5. The Prosecutor submitted that the evidence adduced by the Defendants was limited and did not disclose the full financial position of either Defendant. Whilst the capacity to pay was a mandatory consideration in the fixing of the quantum of any fine, the Court would be disinclined to reduce the fine based upon the limited information available. Notwithstanding the primary submission the Prosecutor accepted that Mr Fair, as a bankrupt, would have limited capacity to pay any fine.
6. As to Mr Fair, I accept that he has been declared bankrupt and that his present capacity to pay is extremely limited. I do anticipate, however, that Mr Fair has the capacity to continue in employment - he appeared to me to be a relatively young and moderately fit gentleman with experience in the waste trade. The fine will persist after the period of bankruptcy and his capacity to pay the fine will be reflected by the circumstances at that time. On that basis, I consider it appropriate to reduce the fine imposed upon Mr Fair by an amount of 70% below that which I would otherwise determine to reflect his strained financial circumstances.
7. As to Carbon MF, it is yet to be wound up. Mr Fair has the expectation that the proceedings will be unable to be resisted due to the company's limited assets, which evidence I accept. If the company is wound up then the likelihood that the fine would be paid would be extremely low, and therefore not impose any financial burden upon the company or its creditors. However, as I observed above in connection with the principle of totality, the primary culpability for the offending conduct rests on the corporate defendant. There is a need to fix a fine that reflects that culpability.
8. Reduction of a fine upon a corporate defendant that has no subsisting business other than the business to which these offences relate undermine general deterrent effect that the imposition of a fine will achieve. Further, the risk of winding up the company so as to avoid the payment of a fine - or to effect a reduction in any such fine is a consequence antithetical to the objects of the legislative regime that created the offences and the purposes of sentencing.
9. In the circumstances of this case, the likely winding up of Carbon MF was caused by factors unrelated to the amount of any fine in these proceedings. In accepting that any fine is unlikely to be paid due to those circumstances I consider that it would be detrimental to the underlying purpose of sentencing to reduce any fine to reflect this likelihood. The imposition of the fine and the publication of an amount that reflects the appropriate penalty will better serve the administration of justice even if the consequence is that the fine itself will not be paid. Accordingly, I decline to fix the sum of any fine in connection with Carbon MF to reflect its capacity to pay.

Publication order

1. In addition to any penalty imposed the Court may make further orders as identified in Div 5 Pt 8.3 of the POEO Act. Section 250(1)(a) of the POEO Act provides that an order requiring the offender to publicise the offence may be made.
2. The Prosecutor and the Defendants have agreed a form of publication order. The Defendants agree that a publication order is appropriate in the circumstances.
3. For the reasons I have identified in connection with the other considerations on sentence above, I agree that a publication order in the form agreed by the parties is appropriate and such an order shall be made.

Moiety

1. The Prosecutor seeks an order that one half of any monetary penalty imposed by the Court be paid to the Prosecutor pursuant to s 122 of the Fines Act, which provides: 122 Payment of share of fine to prosecutor (1) This section applies where - (a) the Act imposing or authorising the imposition of a fine or other penalty does not make any provisions for its application when recovered, and (b) the prosecutor is not a police officer. (2) The court before which proceedings are taken to recover any such fine or other penalty may direct that such portion of it (not exceeding one-half) is to be paid to the prosecutor. (3) For the purposes of this section, fine does not include an amount of the kind referred to in section 4 (1) (e) or (f).
2. As Pain J held in Environment Protection Authority v Sydney Water Corporation [2020] NSWLEC 153 at [116]-[118], there is power to make such an order in relation to POEO Act offences because s 122(1)(a) and (b) of the Fines Act are satisfied. Pepper J similarly considered that an order for a moiety was appropriate in Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 4 at [242]-[246].
3. The Prosecutor submitted that such an order was appropriate in the circumstances of this case as notwithstanding the order sought for payment of investigation costs and its legal costs, such sums would not compensate the EPA for the total time spent by its officers investigating the commission of the offences and in the prosecution of these proceedings. I accept the Prosecutor's submission and will make the order for the moiety.

Appropriate sentence

1. The appropriate sentence is to be derived by an "instinctive synthesis" of all of the relevant factors in order to determine an appropriate proportionate sentence: Markarian v The Queen (2005) 228 CLR 357.
2. Taking into account the objective seriousness of the charges and the factors identified above, I have determined that the appropriate sentence in this case includes the imposition of a monetary penalty (in addition to the publication order and the additional orders relating to legal and investigative costs). Whilst it is open for an additional daily penalty, the Prosecutor has made no submission that such daily penalty is necessary. Having regard to the evidence and submissions in this case I consider that the appropriate sentence can be determined to achieve the purposes of sentencing by the imposition of a monetary penalty with no daily penalty. Accordingly, I determine the appropriate sentence in the circumstances of this case to be in the following amounts: 1. With respect to the Pollution of Land Offence pursuant to s 142A(1) and by virtue of s 169(1) of the POEO Act Mr Fair is to be fined the sum of $175,000 less 25% for the early guilty plea with such fine to be reduced by 70% of that amount having regard to his capacity to pay a fine, resulting in a fine in the amount of $39,375; 2. With respect to the failure to comply with the Clean-up Notice Offence pursuant to s 91B and by virtue of s 169A(2) of the POEO Act Mr Fair is to be fined the sum of $80,000 less 25% for the early guilty plea with such fine to be reduced by 70% of that amount having regard to his capacity to pay a fine resulting in a fine in the amount of $18,000; 3. With respect to the Pollution of Land Offence pursuant to s 142A(1) of the POEO Act Carbon MF is to be fined the sum of $350,000 less 25% for the early guilty plea resulting in a fine in the amount $262,500; and 4. With respect to the failure to comply with the Clean-up Notice Offence pursuant to s 91B of the POEO Act Carbon MF is to be fined the sum of $350,000 less 25% for the early guilty plea resulting in a fine in the amount of $262,500.

Orders

1. For the foregoing reasons, it is appropriate that each Defendant be convicted of each of the charges and the following orders be made upon the sentencing of each Defendant in each of the matters. 1. In proceedings 2023/00094706: 1. The Defendant, Carbon MF Pty Ltd, is convicted of the continuing offence against s 91B of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act) as charged. 2. Carbon MF Pty Ltd is to pay a fine in the amount of $262,500. 1. In proceedings 2023/00094707: 1. The Defendant, Carbon MF Pty Ltd, is convicted of the offence against s 142A(1) of the POEO Act as charged. 2. Carbon MF Pty Ltd is to pay a fine in the amount of $262,500. 1. In proceedings 2023/00094708: 1. The Defendant, Mark Fair, is convicted of the offence against s 142A(1) of the POEO Act as charged by virtue of s 169(1) of the POEO Act. 2. Mark Fair is to pay a fine in the amount of $39,375. 1. In proceedings 2023/00094709: 1. The Defendant, Mark Fair, is convicted of the continuing offence against s 91B of the POEO Act as charged by virtue of s 169A(2) of the POEO Act. 2. Mark Fair is to pay a fine in the amount of $18,000. 1. In proceedings 2023/00094706, 2023/00094707, 2023/00094708 and 2023/00094709: 1. Pursuant to s 122 of the Fines Act 1996 (NSW), a moiety of 50% of any fine determined by the Court be paid to the EPA. 2. Pursuant to s 248 of the POEO Act, the Defendants are to pay 50% each of the sum of $33,228.55 to the EPA for the EPA's reasonably incurred costs and expenses during the EPA's investigation of the offences.
2. Pursuant to ss 257B and 257G of the Criminal Procedure Act 1986 (NSW): 1. Carbon MF Pty Ltd is to pay 50% of the EPA's costs of the proceedings. 2. Mark Fair is to pay 50% of the EPA's costs of the proceedings.
3. Pursuant to s 250(1)(b) of the POEO Act, the Defendants, at their expense, are to within 28 days of the date of this order, cause a notice as set out in Annexure A to these orders be printed on an A4 page and delivered to the billing address of all businesses listed in the document provided by the Defendants to the EPA titled "Carbon MF Pty Ltd Customer Contact List". Annexure A

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: 09 November 2023