Environment Protection Authority v Clarence Valley Metal Recyclers Pty Ltd

Land and Environment Court (NSW)|2023-08-28|Before: Moore J

Introduction

The Prosecutor appeals each of the three Local Court sentences pursuant to s 42(2) of the Appeal and Review Act. It does so on the basis that the Local Court's sentencing was infected by two errors of a House v The King (1936) 55 CLR 499) type. The errors said by the Prosecutor to arise are (Prosecutor's written sentencing submissions at (33)): The appellant relies on one ground of appeal, namely, that the sentence imposed was manifestly inadequate. While it is not necessary to identify any particular error to make out the ground of manifest inadequacy, there are two discernible errors in her Honour's remarks. First, her Honour conflated the Local Court's jurisdictional limit with the maximum penalty for the offence and proceeded to sentence the Respondent on that basis. Second, it appears that her Honour approached the sentence on the basis that the jurisdictional limit of $110,000 applied collectively to all three offences, and not that it was the jurisdictional limit in respect of each offence.

Introduction

It is also to be noted that, in addition to the above quoted passage from the Prosecutor's written submissions, the Prosecutor also added, during the course of her oral submissions, a third basis upon which I should conclude that the sentences overall were manifestly inadequate, this being consideration of whether "an overall assessment of the sentence and whether it was within range" demonstrated that the penalties imposed were not appropriate to reflect the Company's offending conduct (Transcript 28 August 2023, page 11, line 50 to page 12, line 1).

Introduction

In support of the first of the errors alleged by the Prosecutor, the Prosecutor said in her written submissions, at paragraphs 39 to 40: It is evident from the sentencing Magistrate's remarks that her Honour erroneously had regard to the Local Court's jurisdictional limit, as opposed to the maximum sentences for the offences provided by law, and sentenced the Respondent by reference to the jurisdictional limit. Rather than considering the maximum penalty as the relevant yardstick, her Honour had regard to the jurisdictional limit in assessing the range of appropriate penalties. Essentially, in the absence of any history of sentencing of the offence under section 44(1), her Honour should have paid careful attention to the maximum sentence provided by law and order to determine an appropriate sentence. Having failed to take the maximum sentence into account, and having considered instead that the jurisdictional limit provided the appropriate yardstick for a sentence, her Honour fell into error.
It is to be noted that, antecedent to these paragraphs, the Prosecutor had set out (in 35 to 38 of the written submissions), extracts from authorities which she advanced as providing a proper foundation for the principle that underlie the complaint made in the quoted paragraphs of her written submissions.

Local Court submissions on characterisation of the offending conduct

In the submissions made on behalf of the Prosecutor before her Honour, the Prosecutor made no express submission as to how the Company's offending conduct should be characterised.
No submission was made to her Honour by the Company's legal representative as to how the Company's offending conduct should be characterised.
In her Honour's sentencing remarks, she correctly described the Company's offending conduct as constituting fraud - indeed, it was fraud on a significant and systematic basis.
During the course of the hearing before the Local Court, the Company's then legal representative conceded that none of the money which had been obtained by the Company as a consequence of its offending conduct had been repaid (Local Court transcript, page 5, line 50). This remains the position.
Her Honour addressed characterisation of the Company's offending conduct at three points during the course of her Honour's decision. First, she characterised the Company's offending conduct, early in her sentencing remarks, in the following terms (Local Court transcript, page 9, lines 24 to 29): The objective seriousness of the offending, in my view, is high. I have already indicated that the scheme is in place so that large numbers of recyclable material may be returned easily by all members of the community. The scheme itself is, therefore, a scheme that is administered with limited administration and, therefore, any attempt to undermine the integrity of that scheme must be regarded as significant and I do regard it as significant.
Her Honour further addressed characterisation of the Company's offending conduct, saying (Local Court transcript, page 10, lines 4 to 7): I, therefore, assess the objective seriousness as no less than mid-range. It is certainly not below mid-range, given the aspect of financial gain, given the knowledge and given the degree of planning and wilfulness in obtaining those refunds for such a significant period of time.
However, later in her sentencing remarks (shortly before her indication of what she considered to be the range of the appropriate sentences for the Company's offending conduct), her Honour characterised the Company's offending conduct in different terms, saying (Local Court transcript, page 11, lines 6 to 9): Having identified that the maximum amount of the penalty is $110,000 in this jurisdiction, having identified that the objective seriousness must sit at no less than mid-range, it is my view that the starting point for the financial penalty should be in the region of $40,000 to $50,000.

The Prosecutor's submissions

Relevant to this point, the Prosecutor said (Transcript 28 August 2023, page 11, lines 35 to 46): I did refer your Honour to the finding of the Magistrate that this was an offence falling within the high range. On p 86 at line 6 her Honour then makes a different conclusion as to the objective seriousness and says at line 7, "Having identified that the objective seriousness must sit at no less than mid‑range, her Honour makes comments as to the appropriate starting point for any financial position. I have already submitted to your Honour that in my submission this is an offence falling in the high range, however in any event her Honour's conclusion that this is an offence falling at no less than a mid‑range and therefore the starting point for the fine in my submission is incongruent with the ultimate fine that was ultimately applied in this case. Your Honour will see there on p 86 the fines that were imposed, the $15,000 per offence and costs were also imposed in the order of $26,117.
As I understood the tenor of the Prosecutor's submission on this point, the sentences actually imposed demonstrated a lack of regard by her Honour of the maximum penalty - the maximum being the relevant sentencing reference (while sentencing within the Local Court's jurisdictional limit).

Alleged error 2

With respect to the proposition that her Honour had assessed the appropriate penalty to be imposed on the Company on the basis that they could not, in total, exceed the Local Court's jurisdictional limit of $110,000, the Prosecutor submitted (written submissions at paragraphs 42 to 44): Further, the sentencing Magistrate appears to have misapprehended the jurisdictional limit applicable to all three offences. Her Honour started on the premise that the jurisdictional limit was $110,000, and that the starting point for the financial penalty should be in the region of $40,000 to $50,000. Properly applied, that reasoning should have led to a fine of around $40,000 to $50,000 per offence. However, instead, her Honour imposed sentences of $15,000 per offence, a total of $45,000. The sentencing Magistrate erred in the application of the jurisdictional limit in determining the total sentence. Applying her Honour's reasoning, the total fine across all offences should have been in the vicinity of $120,000 to $150,000. Take the lower amount of $40,000 as the example, and taking into account the utilitarian value of the plea being 25%, the result would still be a fine of $30,000. Yet her Honour further discounted that amount by 50%. It is entirely unclear how, given her Honour's comments, her Honour arrived at a fine of $15,000 per offence. The only logical explanation is that her Honour misapplied the jurisdictional limit and understood it to apply to all three offences collectively, not to each offence separately.

Alleged error 3

In support of the proposition that the sentences imposed were otherwise manifestly inadequate, the Prosecutor set out a lengthy extract from R v Ferguson [2022] NSWCCA 147 (R v Ferguson) where R A Hulme J (Ward P and Bellew J agreeing) noted, at [8], that counsel for the respondent helpfully provided a summary of the principles applicable to a Crown appeal against sentence. It is clear that their Honours adopted the summary as an accurate reflection of the principles to be considered.
It is appropriate to set out this summary in its entirety. It is, however, appropriate to note that, in this instance, the second paragraph in the quotation is irrelevant - given that the penalties here involved are purely financial. The third paragraph is also irrelevant given that, as the Prosecutor has acknowledged, the charges laid against the Company are the first charges for breaches of the Regulation and, therefore, there are no other comparable cases to be considered. The summary from R v Ferguson is in the following terms: "The assertion that a sentence is manifestly inadequate is an assertion that the sentence was "unreasonable or plainly unjust", as that expression is used in House v The King: see Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [25] (Markarian). In other words, the Court must be satisfied that the non-parole periods and total sentences imposed were outside the range of sentences that could have been imposed: see R v Mereb; R v Younan [2014] NSWCCA 149 at [32]. However, appellate intervention is not justified simply because the result arrived at below is markedly different from other sentences imposed in other cases. The Court must be driven to conclude that there must have been some misapplication of principle: Wong v R at [58]; Hili v The Queen; Jones v The Queen [2010] HCA 45; (2010) 242 CLR 520 at [58]-[59]; [75]-[76] (Hili); The Queen v Pham [2015] HCA 39; (2015) 256 CLR 550 at [28]. In assessing whether the sentence imposed was "unreasonable or plainly unjust", the following principles apply: (a) It must be recalled that sentencing is a discretionary judgment and there is no single correct sentence: Bugmy v The Queen [2013] HCA 37; (2013) 249 CLR 571 at [24] (Bugmy). (b) The Court of Criminal Appeal must not substitute its own opinion merely because it would have exercised the sentencing discretion differently to the sentencing judge: Lowndes v The Queen [1999] HCA 29; (1999) 195 CLR 665 at [15]. (c) Judges at first instance are to be allowed as much flexibility in sentencing as is consonant with the application of proper principle and consistency of approach: Dinsdale v The Queen [2000] HCA 54; (2000) 202 CLR 321 at [6]; Markarian at [25]; Hili at [58]. (d) The weight to be given to the various factors to be taken into account (including the evidence and various purposes of sentencing) is a matter for the sentencing judge: Bugmy at [24], [99]. (e) The Court of Criminal Appeal will be slow to substitute its own assessment for the objective seriousness of the offending. … (f) Whether or not manifest error has occurred is not "fundamentally intuitive". What reveals manifest inadequacy is a consideration of all of the matters that are relevant to fixing the sentence: Hili at [60]. (g) Reviewing a history of sentencing can establish a range of sentences that have in fact been imposed. However, that history does not establish either that (i) that range is the correct range; or (ii) that the upper or lower limits to the range are the correct limits. They are only a yardstick against which to examine a proposed sentence: Hili at [54] approving Director of Public Prosecutions (Cth) v De La Rosa (2010) 205 A Crim R 1 at [303] to [304] (Simpson J)."
The Prosecutor advanced four reasons why I should conclude that there was a misapplication of the relevant sentencing principles, causing an error resulting in her Honour determining to impose sentences that were manifestly inadequate.
The first reason advanced was that the Company's offending conduct resulted in a very significant financial gain to it and that none of this had been repaid. The Prosecutor noted that committing the offences for financial gain constituted an aggravating factor pursuant to s 21A(2)(o) of the Sentencing Procedure Act.
The second reason to which the Prosecutor drew attention to was that her Honour had initially identified the objective seriousness of the Company's offending conduct as "high" (although later described by her Honour in revised terms as being in the mid-range - see Local Court transcript extracts at [40] to [42]). The Prosecutor submitted that the initial characterisation of the Company's offending conduct as being "high" was correct. This was not only because of the significant financial gain but also because the offences were committed in circumstances where Mr Walsh, as the guiding mind of the Company, knew that container deposit refunds had already been paid for the containers which the Company had subsequently submitted for further refund.
The Prosecutor also pointed to the fact that Mr Walsh had advised a supplier of the containers to the Company that they would not be used subject of any further container deposit scheme claim. This, the Prosecutor submitted, should lead me to conclude that the Company's offending conduct was deliberate. Finally, in support of the proposition that it should have been concluded that the Company's offending conduct was of high objective seriousness, the Prosecutor noted the fact that the offending conduct had taken place over an almost 12-month period.
With respect to these factors, the Prosecutor submitted (paragraph 51 of the Prosecutor's written submissions): The objective seriousness of the offending established error in the imposition of such a low fine. There were no countervailing mitigating factors that warranted the imposition of a fine of $15,000 per offence for offending falling no lower than mid range.
The third reason advanced was that a significant penalty had been warranted to reflect the need for general deterrence - a factor acknowledged by her Honour in her Local Court sentencing remarks later noted in my consideration of general deterrence in my resentencing process. It is unnecessary to set out the material developed for the Prosecutor on this point - as the overall nature of the Company's offending conduct coupled with the fact that these charges were the first prosecuted for breaches of the Regulation, rendered it self-evident that general deterrence needed to play a significant role in her Honour's sentencing process.
The final reason advanced by the Prosecutor as demonstrating the manifest inadequacy of her Honour's decision was that her Honour had had regarded to what she considered was the Company's inability to pay any significant fines that might be imposed in circumstances where there was no evidence before her Honour as to the truth of the submissions advanced by the Company's then legal representative as to the Company's financial circumstances.

Introduction

I am not satisfied that the first of the reasons advanced by the Prosecutor has been established. However, I am satisfied that, for the second and third of the reasons advanced by the Prosecutor, the sentencing process in the Local Court miscarried.
The first of the Prosecutor's complaints can be dealt with in comparatively short compass. It is clear that, in her initial indication of a starting sentence range of $40,000-$50,000, her Honour struck that range as being in the middle of the sentencing range available to her (the range being one limited to fines of up to $110,000). The Prosecutor has not established how, given the final determination by her Honour as to the objective seriousness of the Company's offending conduct falling in the mid-range, her ascribing a starting sentence band which fell at that point within the maximum sentencing limit she was permitted to exercise demonstrates, in any way, that she had not had proper regard to the maximum penalty. Indeed, as earlier quoted, her Honour had said (Local Court transcript, page 11 lines 6 to 9): Having identified that the maximum amount of the penalty is $110,000 in this jurisdiction, having identified that the objective seriousness must sit at no less than mid-range, it is my view that the starting point for the financial penalty should be in the region of $40,000 to $50,000.
However, I am satisfied that the second and third complaints made by the Prosecutor are well founded and warrant my intervention. I have concluded that the sentences imposed on the Company for each of the offences were manifestly inadequate for several reasons.
First, I am satisfied that the only possible way that the total overall penalties imposed by her Honour of $45,000 (even having regard to the early guilty pleas and how such assistance as was given to the Prosecutor) could be understood was that the total penalty was to be seen as being, after those considerations, reflective of commencing at the midpoint of the jurisdictional limit available to her Honour to sentence the company for its offending conduct.

The Local Court discounts on sentence

Her Honour indicated that she considered the appropriate starting sentences for each of the offences was in the range of $40,000 to $50,000 (Local Court transcript, page 11, line 9). Having done so, her Honour then determined that the actual sentence to be imposed for each of the offences was $15,000.
From the top of the range nominated by her Honour as the high end of this range of appropriate penalties, the sentence imposed for each offence would have represented a discount of 70%. At the bottom of the nominated range, the discount would have been 62.5%.
In this context, it is to be noted that her Honour observed that the reasons for granting discounts on each of the relevant indicative starting sentences were (Local Court transcript, page 11, lines 11 to 18): Taking into account the significance of Mr Walsh's assistance to the prosecutor and, of course, the utilitarian benefit of his plea, I am satisfied that the penalty should be significantly reduced as a consequence of that assistance and that plea. Therefore, in my view, a penalty in the region of $15,000 for each of the offences before the court is the appropriate outcome.
It is also to be observed that, it being not in contest before her Honour or before me that the Company's guilty pleas to each of the charges laid against it had been entered at the earliest opportunity, the maximum discount appropriate to be granted to the Company for those pleas was 25% (R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383 - R v Thomson; R v Houlton).
On this basis, the discounts awarded by her Honour for what was described as the Company's cooperation with the Prosecutor were between 45 percent and 37.5 percent.
No submission was advanced to her Honour by the Prosecutor concerning co-operation which could justify such additional discounts above the maximum for the guilty pleas. Similarly, no submission, potentially justifying the extent of such discounts was advanced by the legal representative of the Company.
I have earlier set out the terms of ss 21A(3) and 23 of the Sentencing Procedure Act - these being the provisions requiring the taking into account of such assistance for sentencing purposes. Absent some explanation by her Honour (there being none) explaining why her Honour considered that these were what might be regarded as extraordinarily generous discounts above the maximum discount for the Company's early guilty pleas, this failure constitutes an error of a House v The King nature.
For the reasons set out above, the sentences imposed on the Company for each of the offences to which it had pleaded guilty were manifestly inadequate and, as a consequence, it is therefore necessary for the sentencing process to be undertaken afresh.

Capacity to pay

Her Honour said (Local Court transcript, page 11, lines 20 to 23): There may be some argument that the amount should be more, but I take into account that this is not a significantly well-resourced corporation and it is appropriate that I have to take into account the ability to pay.
As Preston CJ observed in Bankstown City Council v Hanna (2014) 205 LGERA 39; [2014] NSWLEC 152 (Hanna), at [181], a sentencing court needs to have sufficient and appropriate evidence to satisfy it that a defendant is not capable of paying the financial penalties that would otherwise be appropriate to be imposed on it. In this instance, her Honour had no evidence - merely unsupported assertions from the Company's then legal representative. This defect in her Honour's sentencing process also constitutes an error of a House v The King nature.
As a consequence of the above errors made by her Honour, I am satisfied that her sentencing miscarried in a fashion warranting intervention by me to resentence the Company in accord with proper principles.

Introduction

I have earlier noted that the Sentencing Procedure Act, in s 21A(2) and (3), sets out the potential aggravating factors to be considered in determining the objective seriousness of the Company's offending conduct and what are the relevant subjective factors applicable to the Company, ones which also have to be taken into account in resentencing the Company.

An aggravating factor - the offending conduct was carried out for financial gain

It is sufficient for the purposes of these proceedings to note that s 21A(2)(o) provides that the commission of offending conduct for financial gain (as is here the case) gives rise to a factor of aggravation to be taken into account in sentencing.
This provision is engaged in these proceedings because, as is clear from the Prosecutor's Statement of Facts, the Company's offending conduct was carried out for financial gain. The total net financial gain to the Company as a consequence of its course of offending conduct giving rise to the three charges to which it is pleaded guilty was at least of the order of $200,000.
This constitutes a factor of aggravation for sentencing purposes.

The Company's subjective factors

I now turn to consider the relevant elements of s 21A(3) that are potentially engaged as mitigating factors requiring consideration in my instinctive synthesis process for deriving the appropriate sentences for the Company for its offending conduct. I have earlier set out the potentially relevant elements of s 21A(3). I now address each in turn. 1. Harm caused by the offending conduct Although the Company benefited, financially, by some $200,000 as a consequence of its offending conduct, the Prosecutor did not press for this to be found to be a sufficient breach of the Regulation to warrant it being regarded as a factor of aggravation because of the damage done to the regulatory scheme established by the Regulation. However, the financial benefit to the Company and the damage to the regulatory scheme cannot be regarded as "not substantial". The Prosecutor acknowledged this position before her Honour (Local Court transcript page 3, lines 43 to 45). This means that the factor in s 21A(3)(a) of the Sentencing Procedure Act is neutral for present purposes. 1. No prior convictions It is not suggested that the Company has any record of prior convictions of any relevant nature. As a consequence, pursuant to s 21A(3)(e) of the Sentencing Procedure Act, this is a factor weighing in the Company's favour. 1. Good character I have no evidence of any relevant type that would enable me to consider whether or not the Company was of good corporate character as required to be assessed by s 21A(3)(f) of the Sentencing Procedure Act. This is, therefore, neutral for resentencing purposes. 1. Likelihood of reoffending As her Honour observed in her sentencing remarks, she considered it unlikely that the Company would reoffend. I have reached a similar conclusion - one particularly appropriate in light of Mr Walsh's submissions that he intended to wind up the Company after necessary final accounting processes had been undertaken. As a consequence, pursuant to s 21A(3)(g) of the Sentencing Procedure Act, this is a factor weighing in the Company's favour. 1. Prospects of rehabilitation Although her Honour observed that, in conjunction with her Honour's finding noted in the immediately preceding paragraph concerning the likelihood of the Company reoffending, the Company had good prospects of rehabilitation, I am also satisfied that this can be taken into account in the Company's favour (despite the fact that the Company will not be continuing as a corporate entity into the future after its accounts are finalised). As a consequence, pursuant to s 21A(3)(h) of the Sentencing Procedure Act, this is a factor weighing in the Company's favour. 1. Remorse Although Mr Walsh was provided with the opportunity to make such submissions as he wished concerning the Company's offending conduct, the matters that he advanced (Transcript 28 August 2023, page 19, line 34 to page 20, line 27) addressed only his and the Company's financial positions and his personal circumstances which gave rise to the Company's offending conduct. None of this material (whilst eliciting sympathy from me for his position) can comprise any expression of contrition or remorse in the sense envisaged by s 21A(3)(i) in the fashion summarised by Pepper J in Chief Executive, Office of Environment and Heritage v Ausgrid (2013) 199 LGERA 1; [2013] NSWLEC 51 - this summary being regularly adopted as appropriate by other members of the Court. Therefore, this absence of contrition and remorse cannot assist the Company. 1. The Company's guilty pleas The Company entered guilty pleas at the earliest opportunity to each of the offences with which it was charged. As a consequence, this is a factor to be weighed in the Company's favour (as provided by ss 21A(3)(k) and 22 of the Sentencing Procedure Act). The discount to which the Company is entitled because of this assistance to the administration of justice is later separately discussed. 1. Assistance to the Prosecutor The Prosecutor acknowledged that the Company had provided assistance to it by Mr Walsh's agreement to the Statement of Facts which was tendered to the Local Court and also acknowledged Mr Walsh's cooperation with the Prosecutor by making appropriate admissions assisting in matters leading up to the hearing in the Local Court. This is a matter also to weigh in the Company's favour (ss 21A(3)(m) and 23 of the Sentencing Procedure Act).

Characterisation of the Company's offending conduct

Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 (at [698]) confirmed that: The task of a court is to assess the relative seriousness of the offender's particular offence in relation to a worst case for which the maximum penalty is provided. Having determined the relative seriousness of the offence, the penalty to be imposed is that which approximately correlates upon the scale of penalty set by the legislature from zero to the maximum.
Consistent with this, it is necessary to categorise the objective seriousness of the behaviour constituting the Company's offences as falling somewhere within a range between the "least bad" case and the worst case of such conduct. This is not a matter of mathematical precision, merely a tool to assist with the instinctive synthesis process needing to be undertaken to assess the appropriate penalties to be imposed on the Company.
This is why it is appropriate to conclude whereabouts, in the range of potential offending conduct within the scope of a particular offence creating provision, the objective facts of the Company's offending conduct are to be described. In this instance, given that the offending conduct was carried out systematically over a period of time and was conducted for the purpose of obtaining significant financial gain, it is appropriate to characterise the Company's offending conduct at least at the top of the middle range of culpability.

Specific deterrence

Her Honour accepted (in the context of addressing the Company's cooperation with the Prosecutor) that there was no need for specific deterrence. Her Honour said (Local Court transcript, page 10, lines 13 to 21): Acceptance of responsibility is important on a sentencing exercise because it gives the court an indication of the prospects of rehabilitation, that is the chances of the corporation being subject to criminal offences in the future. Whilst Mr Walsh is at the helm of this corporation, it is my view that it is unlikely that the corporation will face criminal prosecutions in the future. Therefore, I assess the prospects of rehabilitation as good. That is important in terms of appropriate penalty.
It is to be observed that the Prosecutor has not cavilled with the above conclusion. I am also satisfied that there is no need for specific deterrence.

General deterrence

It is to be noted that, in her Honour's sentencing remarks, she made the following observations concerning general deterrence (Local Court transcript page 10, lines 28 to 33): There is, in my view, a need for the court to reflect mostly general deterrence. I have addressed specific deterrence in my assessment of rehabilitation, but general deterrence looms large, for all of the reasons I have indicated. The scheme itself cannot be undermined and members of the community who may be tempted to defraud that scheme should be deterred by the court acting appropriately in this matter.
These remarks reflected a conclusion that there was a necessity for general deterrence to be incorporated in the sentencing outcomes for the Company's conduct. That aspiration is, I am satisfied, an appropriate one. It is to be observed that her Honour's aspiration (which I obviously share) was not, in fact, reflected in the sentencing outcomes which her Honour imposed. However, it is necessary for me to take the necessity for general deterrence into account in my resentencing process.

The appropriate starting sentence for each offence

In determining the appropriate starting penalties for the Company, I must undertake a mandated process of instinctive synthesis (Markarian v R (2005) 229 CLR 357; [2005] HCA 25) having regard to all the objective factors of the offending conduct (as earlier discussed) and the subjective factors peculiar to the Company that temper what might otherwise be the penalty to be imposed.
The sentence to be imposed must reflect all the relevant objective circumstances of the offence and subjective circumstances of the Company (Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 and Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14). The sentence is not to exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances" (Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at 354, citing Veen v The Queen (No 2)).
This process permits me to arrive at a starting sentence for the offence to which the appropriate discount is to be applied for the entry of the Company's guilty pleas.
Having regard to the fact that the sentencing discretion which I am to exercise is confined by the fact that the Local Court's jurisdictional limit is $110,000 for each of the offences, I am satisfied that the appropriate starting penalty for each of the three offences should be $72,000. In this context, it is to be noted that there are no comparable sentencing outcomes warranting consideration as to whether there is any sentencing pattern requiring consideration for these offences. This is because these prosecutions are the first which have been undertaken arising out of breaches of the Regulation.

The Company's guilty pleas

The maximum discount on the otherwise applicable starting penalty to be afforded to a defendant who has pleaded guilty is 25% (R v Thomson; R v Houlton). The full measure of this conventionally maximum discount is only afforded to those defendants who enter a guilty plea at the earliest opportunity. In these proceedings, the Company is entitled to the full 25% because the guilty pleas were entered before the Local Court at the earliest opportunity. These discounts result in the sentence for each offence being reduced to $54,000.

The Company's capacity to pay

Her Honour said (Local Court transcript, page 11, lines 20 to 23): There may be some argument that the amount should be more, but I take into account that this is not a significantly well-resourced corporation and it is appropriate that I have to take into account the ability to pay.
I have earlier set out the terms of s 6 of the Fines Act, the provision which permits me to have regard to the capacity of the Company to pay any penalty which might be imposed on it for each of the offences to which it has pleaded guilty. As can be seen from the terms of the provision, moderation of a penalty can be effected if there is a proper evidentiary basis to conclude that the Company has a limited (or no) capacity realistically to pay the appropriate financial penalties which would otherwise be imposed. There must be, however, such an evidentiary basis to reach that a conclusion before consideration is to be given as to the extent by which any penalty might be reduced as a consequence of an incapacity to pay (see Hanna earlier cited).
In the proceedings in the Local Court, the Company's legal representative made submissions to her Honour in support of the proposition that the Company lacked capacity to pay any substantial penalty which might be imposed on it (Local Court transcript, page 8, lines 8 to 12). However, there is nothing of substance in the Prosecutor's Statement of Facts which would support such a contention and no evidence was adduced in the Local Court which would provide a proper foundation for the conclusion that s 6 of the Fines Act was appropriate to be engaged to moderate the appropriate penalties to be imposed on the Company. For the purposes of the present hearing and my determinations as to appropriate penalties arising from the appeal, no further evidence of any nature was adduced on behalf of the Company.
Although Mr Walsh, in his submissions, indicated that, in effect, the affairs of the Company were in the process of being wound up and that neither he nor the Company had anything other than minimal financial assets, this did not constitute evidence of that position - merely submissions. I therefore have no evidence upon which it would be proper to contemplate any moderation of the penalties otherwise appropriate to be imposed on the Company for each of the offences to which it has pleaded guilty.

Totality and accumulation

During the course of the hearing, I asked the Prosecutor whether it was accepted that these offences arose out of a continuous course of conduct, thus engaging questions of totality and accumulation rather than regarding them as three separate and unrelated offences. The Prosecutor advised that it was accepted that, although offences with differing characteristics, they all fell within the same course of conduct and the issue of totality was therefore a relevant factor in my consideration of the penalties to be imposed if the appeals were upheld (Transcript 28 August 2023, page 10, line 43 to page 11, line 1).
It therefore is necessary to apply an adjustment to the overall original potential accumulation of penalties derived through my instinctive synthesis process to ensure that there is not an inappropriate totality of penalties, whilst still ensuring that the overall outcome of my penalty assessment process can reflect the overall criminality which is to be punished (Pearce v The Queen (1998) 194 CLR 610).
As a consequence, the sentences for the second and third offences should be further moderated to reflect the fact that the Company's offending formed part of a single course of offending conduct (as accepted by the Prosecutor). The results, in the circumstances, are that, for the second offence, this sentence should be moderated to $50,000 whilst that for the third offence should be moderated to $45,000.

A moiety of the penalties to the Prosecutor.

The Prosecutor has applied pursuant to s 122 of the Fines Act that it be awarded a moiety (50%) of the penalties to be imposed on the Company for each of its offences.
In Chief Executive, Office of Environment and Heritage v Brummell [2019] NSWLEC 114, Preston CJ discussed, between [102] and [111], the origins of, and broad operative scope for, orders awarding a moiety to a Prosecutor pursuant to s 122 of the Fines Act. It is sufficient to note that the discretion to make such an order is broad and has frequently been exercised in this Court.
In Secretary, Department of Planning and Environment v AGL Energy Limited; Secretary, Department of Planning and Environment v AGL Upstream Infrastructure investments Pty Limited [2017] NSWLEC 2, at [134] to [158], I also explained the history of the provision and proposed that a broader view of such a moiety order might be appropriate to be made to provide additional funding to the Prosecutor to support its environmental protection activities (including, potentially, further environmental law enforcement activities). I am satisfied that the making of such an order to provide additional funding for the activities of the Prosecutor in addition to the Prosecutor's conventional budgetary funding is entirely appropriate. I am also satisfied that making such an order is likely to support the sustaining, on a more general basis, of environmental law enforcement activities of the Prosecutor. I am, therefore, satisfied that it is appropriate to order that the Prosecutor be paid the moiety that it seeks of the penalty to be imposed on the Company in each of these proceedings.

Costs

As earlier noted, ss 257B and 257G of the Criminal Procedure Act operate to permit me to order that the Company is to pay the Prosecutor's costs of these proceedings. There is no evidence concerning the Company's financial position so the possibility of the costs burden becoming a factor to be considered (in an Environment Protection Authority v Barnes (2006) NSWCCA 246 fashion) does not arise. It is, therefore, appropriate to order that the Company pay the Prosecutor's costs of its successful appeals as agreed or assessed.

The costs orders in the Local Court

As part of the outcome of the Local Court proceedings, her Honour ordered that the Company pay the Prosecutor's costs in the amount of $26,117.55. This costs order does not require consideration on appeal and, therefore, will remain undisturbed.

Orders

In Matter No 366591 of 2022, the orders of the Court, therefore, are: 1. The Prosecutor's appeal is upheld; 2. Pursuant to s 48(1)(b) of the Crimes (Appeal and Review) Act 2001, the sentence imposed by the Local Court on 8 November 2022 is varied and Clarence Valley Metal Recyclers Pty Ltd (the Defendant) is fined $54,000; 3. Pursuant to s 122(2) of the Fines Act 1996, one half of the fine imposed by order (2) is to be paid to the Environment Protection Authority.
In Matter No 366592 of 2022, the orders of the Court, therefore, are: 1. The Prosecutor's appeal is upheld; 2. Pursuant to s 48(1)(b) of the Crimes (Appeal and Review) Act 2001, the sentence imposed by the Local Court on 8 November 2022 is varied and Clarence Valley Metal Recyclers Pty Ltd (the Defendant) is fined $50,000; 3. Pursuant to s 122(2) of the Fines Act 1996, one half of the fine imposed by order (2) is to be paid to the Environment Protection Authority.
In Matter No 366593 of 2022, the orders of the Court, therefore, are: 1. The Prosecutor's appeal is upheld; 2. Pursuant to s 48(1)(b) of the Crimes (Appeal and Review) Act 2001, the sentence imposed by the Local Court on 8 November 2022 is varied and Clarence Valley Metal Recyclers Pty Ltd (the Defendant) is fined $45,000; 3. Pursuant to s 122(2) of the Fines Act 1996, one half of the fine imposed by order (2) is to be paid to the Environment Protection Authority.
In all matters: 1. The Exhibit is returned; and 2. Pursuant to s 257G of the Criminal Procedure Act 1986, the Defendant is ordered to pay the Prosecutor's costs as agreed or assessed.

Annexure A - Statement of Agreed Facts.docx 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: 22 September 2023

The appropriateness of appellate intervention on sentence

The Court of Criminal Appeal recently summarised, in R v Walker [2023] NSWCCA 219, the position with respect to Crown leniency appeals (this Prosecutor being the Crown in function). Weinstein J said, at [36] and [37], (Leeming JA and Yehia J agreeing): 36. Recently, in Kramer v R; R v Kramer [2023] NSWCCA 152 at [131] - [132], McNaughton J, with whom Davies and Hamill JJ agreed, said the following with respect to Crown appeals against sentence: "[131] Crown appeals against sentence are brought for the primary purpose of laying down principles for the governance and guidance of courts having the duty of sentencing convicted persons. The Crown needs to show the sentencing judge has made an error of the kind identified in House v The King (1936) 55 CLR 499 at 504-505; [1936] HCA 40 ("House"); see CMB v Attorney General for the State of New South Wales (2015) 256 CLR 346; [2015] HCA 9 ("CMB") at [54] (Kiefel, Bell and Keane JJ). Even if error is established, the court is required to consider whether the Crown's appeal should nonetheless be dismissed in the exercise of its residual discretion (Green v The Queen; Quinn v The Queen (2011) 244 CLR 462; [2011] HCA 49 ("Green") at [26]; Bugmy v The Queen (2013) 249 CLR 571; [2013] HCA 37 at [24]). The Crown must "negate any reason why the residual discretion of the Court of Criminal Appeal not to interfere should be exercised" (CMB at [34] (French CJ and Gageler J) and at [56] (Kiefel, Bell and Keane JJ), quoting R v Hernando [2002] NSWCCA 489 ("Hernando") at [12]; (2002) 136 A Crim R 451). [132] It was also observed in Green that cases might arise where the court concludes that the inadequacy of the sentence is so marked that it amounts to "an affront to the administration of justice" which risks undermining public confidence in the criminal justice system. In such a case, a court is justified in interfering with the sentence: Green at [42] (French CJ, Crennan and Kiefel JJ)." 37. When error is found, this Court should ordinarily exercise its residual discretion to not interfere with a sentence if it is otherwise within the appropriate range: see for example R v Eaton [2023] NSWCCA 125 (Eaton) per Hamill J (Lonergan and Ierace JJ agreeing). Intervention is not justified simply because the sentence imposed below is different from those imposed in other cases. Rather, intervention will be warranted only when an appellate court concludes that there must have been some misapplication of principle that is apparent from the reasons or otherwise: Wong v The Queen (2001) 207 CLR 584; [2001] HCA 64; Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 (Hili).

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