Environment Protection Authority v Crush and Haul Pty Ltd; Environment... [2022] NSWLEC 113 | Case summary

Land and Environment Court (NSW)|2022-07-06|Before: Preston CJ

costs Legislation Cited: Crimes (Sentencing Procedure) Act 1999 s 21A Criminal Procedure Act 1986 ss 257B, 257G Fines Act 1996 s 122 Protection of the Environment Operations Act 1997 ss 48, 169A, 241, 250, cl 19 of Schedule 1 Cases Cited: Bankstown City Council v Hanna (2014) 205 LGERA 39; [2014] NSWLEC 152 Boughey v The Queen (1986) 161 CLR 10 Chief Executive, Office of Environment and Heritage v Brummell (2019) 242 LGERA 241; [2019] NSWLEC 114 Director-General, Department of Environment and Climate Change v Rae (2009) 168 LGERA 121; [2009] NSWLEC 137 Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90 Environment Protection Authority v M A Roche Group Pty Ltd [2014] NSWLEC 114 Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29 Environment Protection Authority v Rixa Quarries (No 2) Pty Ltd (No 2) [2017] NSWLEC 93 Environment Protection Authority v Wollondilly Abattoirs Pty Ltd & Davis [2019] NSWCCA 312 Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2015] NSWLEC 78 Natural Resources Access Regulator v Tony Thompson [2022] NSWLEC 48 Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178 Category: Principal judgment Parties: Environment Protection Authority (Prosecutor) Crush and Haul Pty Ltd (Defendant) Luke Cauchi (Defendant) Representation: Counsel: Ms G Marsden (Prosecutor) Mr D Randle (Defendants)

Solicitors: Environment Protection Authority (Prosecutor) Fishburn Watson O'Brien (Defendants) File Number(s): 2021/224806 & 2021/224814 Publication restriction: Nil

A company and its director commit licence offences

Through 2018, Crush and Haul Pty Ltd (Crush and Haul) operated Corindi Quarry, at Corindi Beach north of Coffs Harbour. Crush and Haul extracted, processed and stored at the quarry extractive materials, specifically rock and clay, for sale. The extractive materials were used for road construction. Crush and Haul used drilling and blasting to extract the rock and clay. It processed the rock and clay through a process of crushing, screening and blending the extractive materials before hauling them from the quarry on loaders. Crush and Haul sold extractive materials to at least five contractors, three of whom were contractors to the Roads and Maritime Services (RMS) (now Transport for NSW) for use in RMS road projects, including the upgrade of the Pacific Highway.
Crush and Haul was the occupier of the quarry under a submanagement agreement, a form of sublease, from Mr Michael Robinson. Mr Robinson had management agreements, themselves a form of lease, one dated 21 August 2017 and another dated 15 January 2018, with Mr Sam Apokis, the owner of the land. Two of the terms of the submanagement agreement required Crush and Haul to:

"operate the quarry at the property with all legal licences from all relevant government departments": (cl 1); and
"ensure continuous productivity of the quarry and a bare minimum of 30,000 tonnes per annum, out the gate" (cl 9).

Under s 48 of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act), an occupier of premises at which a scheduled activity is carried on is required to hold an environment protection licence authorising that activity to be carried on at the premises. Clause 19 of Schedule 1 to the POEO Act indicates that a licence is required for land-based extractive activity if the activity meets the criteria in Column 2 of the Table to the clause. "Land-based extractive activity" is defined in cl 19(1) to mean "the extraction, processing or storage of extractive materials, either for sale or re-use, by means of excavation, blasting, tunnelling or quarrying or other such land-based methods". The criteria for this activity in Column 2 of the Table to the clause is that the activity "involves the extraction, processing or storage of more than 30,000 tonnes per year of extractive materials."
As it was required to do under the sublease, Crush and Haul extracted, processed or stored more than 30,000 tonnes of extractive materials per year in 2018 at the Corindi Quarry. From 1 January 2018 to 31 December 2018, Crush and Haul sold 92,966.28 tonnes of extractive materials from Corindi Quarry.
Crush and Haul was accordingly required to hold an environment protection licence to carry on the scheduled activity of land-based extractive activity at the premises of Corindi Quarry. Crush and Haul did not hold such a licence at the time that the activity was carried on. It thereby committed an offence against s 48(2) of the POEO Act.
During 2018, Mr Luke Cauchi, was the sole director of Crush and Haul. As such, Mr Cauchi knew or ought reasonably to have known that Crush and Haul would be or was committing an offence against s 48(2) of the POEO Act by not being the holder of an environment protection licence that authorised the carrying on of the scheduled activity of land-based extractive activity without meeting the criteria of not extracting, processing or storing more than 30,000 tonnes per year of extractive materials. Mr Cauchi failed to take all reasonable steps to prevent or stop Crush and Haul from committing the offence against s 48(2) of the POEO Act.
In the circumstances where Crush and Haul committed an offence against s 48(2) of the POEO Act (which is defined as an executive liability offence in s 169A(1) of the POEO Act), Mr Cauchi was a director of Crush and Haul and Mr Cauchi knew or ought reasonably to have known that the executive liability offence would be or was being committed and failed to take all reasonable steps to prevent or stop the commission of that offence, Mr Cauchi himself committed an offence against s 169A(2) of the POEO Act.

A sentence hearing is held

Both Crush and Haul and Mr Cauchi have pleaded guilty to the offences with which they are charged, the offence against s 48(2) of the POEO Act for Crush and Haul and the offence against s 169A(2) for Mr Cauchi.
A sentence hearing has been held. The prosecutor, the Environment Protection Authority (EPA), tendered an agreed statement of facts. Mr Cauchi read affidavits by himself, his mother, Mrs Louise Cauchi, and the administration manager of Crush and Haul, Ms Dianne Sweid. Mr Cauchi and Mrs Cauchi were cross-examined by the prosecutor. Mr Cauchi tendered three character witnesses. The first was by his aunt, Dr Anne Zahra; the second by his neighbour, Mr Robert Blacker, as Mr Cauchi and his family reside on Mr Blacker's neighbouring property; and the third by a friend and work colleague, Mr Luke Cutajar.
The Court's task is to determine the sentence that should be imposed on Crush and Haul and Mr Cauchi for the offences they have committed.

Crush and Haul's sentence

The appropriate sentence needs to reflect both the objective seriousness of the offence against s 48(2) of the POEO Act committed by Crush and Haul and the subjective and mitigating circumstances of Crush and Haul as the offender. The objective seriousness of the offence is to be addressed having regard to the maximum penalty, the extent of harm caused, the state of mind in committing the offence, the reasons for committing the offence, the foreseeability of harm, the practical measures to avoid harm and the control over the causes giving rise to the offence.

Maximum penalty

The maximum penalty for an offence against s 48(2) of the POEO Act for a corporation is $1,000,000, and in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues: s 48(2)(a) of the POEO Act. Crush and Haul was not charged with committing a continuing offence.

The extent of harm caused by the offence

The extent of harm caused or likely to be caused to the environment by the commission of an offence is a matter affecting the seriousness of the offence: s 241(1)(a) of the POEO Act. Crush and Haul's carrying on of the scheduled activity of land-based extractive activity without holding an environment protection licence did not cause any actual harm to the environment. Crush and Haul were entitled to extract, process or store up to 30,000 tonnes of extractive materials at Corindi Quarry without needing an environment protection licence. It was the exceedance of the 30,000 tonnes threshold that triggered the obligation to hold an environment protection licence. The EPA did not suggest that the exceedance of the 30,000 tonnes threshold caused any actual harm to the environment. Of course, extracting, processing or storing any extractive materials has the potential to cause environmental harm, but the EPA did not suggest that more harm was caused by Crush and Haul extracting, processing or storing more than 30,000 tonnes at Corindi Quarry than if it had extracted, processed or stored less than 30,000 tonnes.
The prosecutor bore the onus of establishing that environmental harm was caused or likely to be caused by the commission of the offence. The EPA did not establish that such harm was caused in this case.
Nevertheless, once Crush and Haul exceeded the 30,000 tonnes threshold, its carrying on of the scheduled activity of the land-based extractive activity without holding an environment protection licence did undermine the regulatory scheme of the POEO Act. One of the principal means by which the statutory objects of the POEO Act of protection of the environment and pollution prevention are to be achieved is by the POEO Act prohibiting scheduled activities that may pollute the environment but enabling a person to be relieved of the prohibition by applying for and obtaining an environment protection licence to carry on such activity at the premises: Bankstown City Council v Hanna (2014) 205 LGERA 39; [2014] NSWLEC 152 at [50].
Scheduled activities are by their nature activities that are either inherently or when conducted in a certain manner or extent likely to cause harm to the environment. Land-based extractive activity, where more than 30,000 tonnes of material is extracted, processed or stored at premises, is declared to be a scheduled activity. The environmental harm that might be caused by the carrying on of such a scheduled activity is better able to be managed by the person who wishes to carry on the activity holding a licence that authorises the activity to be carried on at the premises and by carrying on the activity in accordance with the licence.
Crush and Haul's conduct in extracting, processing or storing more than 30,000 tonnes of extractive materials at Corindi Quarry without holding a licence was contrary to the legislative objective expressed in the offence under s 48(2) of the POEO Act, impeded the achievement of the objects of the POEO Act and undermined the integrity of the regulatory scheme: Environment Protection Authority v M A Roche Group Pty Ltd [2014] NSWLEC 114 at [19]-[20] and Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29 at [23].

State of mind

Crush and Haul's state of mind in committing the offence is relevant to its culpability. An offence against s 48(2) of the POEO Act is a strict liability offence. Nevertheless, the state of mind of an offender at the time of committing the offence can increase the seriousness of the offence. A strict liability offence that is committed intentionally, negligently or recklessly will be objectively more serious than one not so committed: Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178 at [98]; Environment Protection Authority v Wollondilly Abattoirs Pty Ltd & Davis [2019] NSWCCA 312 at [72].
The EPA contended that Crush and Haul committed the offence recklessly. The EPA submitted that Crush and Haul was aware that an environment protection licence would be required if Crush and Haul extracted, processed or stored more than 30,000 tonnes of extractive materials per year at Corindi Quarry and that it had or was likely to exceed the 30,000 tonnes threshold during the 2018 year.
The statement of agreed facts recorded that Mr Cauchi, the sole director of Crush and Haul in 2018, was aware that there was a limit of 30,000 tonnes per year and that an environment protection licence would be required if that threshold was to be exceeded (paragraph 23).
A term of the sublease under which Crush and Haul operated Corindi Quarry was that it must "ensure continuous productivity of the quarry and a bare minimum of 30,000 tonnes per annum, out the gate". Compliance with this term of the sublease would cause Crush and Haul to exceed the 30,000 tonnes threshold, thereby necessitating Crush and Haul holding a licence to carry on the scheduled activity of land-based extractive activity at Corindi Quarry.
Crush and Haul became aware that it would likely exceed the 30,000 tonnes threshold in April 2018. Mrs Cauchi, acting on behalf of Crush and Haul, engaged an environmental engineering consultant, Mr Nicolas Israel, to apply for an environment protection licence for Crush and Haul to carry on the land-based extractive activity at Corindi Quarry. In an email dated 18 April 2018, Mrs Cauchi said to Mr Israel: "As discussed I need to obtain an EPL for Corindi Quarry for 50,000 tonne. We have taken out nearly 20,000 tonne and only have 10,000 tonne to go which will be done and dusted in a couple of weeks at the rate the clients are requiring material".
Mrs Cauchi instructed Mr Israel to make the licence application in the name of Mr Michael Robinson, the lessee of Corindi Quarry. She attached various documents including the last environment protection licence for the quarry (that licence was no longer current). That environment protection licence dated 19 May 2015 was issued to the then operator of Corindi Quarry, Wyanga Holdings Pty Ltd. Mrs Cauchi was the director of Wyanga Holdings Pty Ltd. Both Wyanga Holdings Pty Ltd and Mrs Cauchi were convicted and fined for breaching s 48(2) of the POEO Act by exceeding the extraction limit under the environment protection licence issued to Wyanga Holdings Pty Ltd: Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2015] NSWLEC 78.
Mrs Cauchi copied Mr Luke Cauchi, the director of Crush and Haul, and Mr Michael Robinson in on her email to Mr Israel.
On 22 April 2018, Mr Israel replied to Mrs Cauchi's request for him to apply for an environment protection licence for Corindi Quarry. Mr Israel first dealt with the "current status of the matter". He noted that: "The Environment Protection Licence (EPL) No 13330, which the EPL previously issued for the quarrying activities at that site, was suspended by the EPA on 02/04/2015 and then revoked by the EPA on 19/05/2015. The EPL was also varied at different times. The EPL stipulates that the quarrying scale is between 30,000 and 50,000 tonnes. The last revision of the EPL is dated 19/05/2015."
Mr Israel next noted that the EPA might not accept the licence application or process it in a timely manner due to past issues the EPA had had with quarrying activities at the Corindi Quarry. He said: "I believe that it we could meet tomorrow evening at your office (or other place of your choice) with the presence of Michael Robinson, we might be able to finalise the application. However, this does not mean that the EPA will accept the application and process it on time, as they have been very difficult in the past, especially on you. The application should be lodged with the EPA by Michael Robinson or a delegate on his behalf, as I believe that as soon as the EPA realizes that you have a share of the pie, they will attempt to make it more difficult."
Mr Israel noted that an application for an environment protection licence normally needs to be supported by a report providing additional and useful information on the scheduled activity to be carried on at the premises, but due to time constraints, he may have to submit the application "as is".
Mr Israel arranged to meet with Mrs Cauchi and Mr Robinson the next evening to settle the application for the environment protection licence.
On 23 April 2018, Mr Israel met with Mrs Cauchi and Mr Robinson as arranged. During that meeting Mr Israel confirmed with both Mrs Cauchi and Mr Robinson that the application for the environment protection licence was to be made in Mr Robinson's name as an individual.
On 1 May 2018, Mr Israel emailed Mrs Cauchi, Mr Cauchi and Ms Sweid regarding the application he was preparing and about to lodge with the EPA for an environment protection licence. Mr Israel said: "I was working on the supporting report until late last night and despite that it is nearly 30 pages in addition to all other supporting documents, I am not very confident that an EPL will be issued without the need for additional information. However, the good is that after I submit the application on line [sic] this morning, you have a defense [sic] that you have submitted an application for an EPL. I will let you know how it goes." (paragraph 32 of the statement of agreed facts)
Later on 1 May 2018, Mr Israel lodged with the EPA the application for an environment protection licence to carry out the "land-based extractive activity" at Corindi Quarry at the scale of "> 30,000-50,000T" per annum. The licence application was lodged in the name of, and signed by, Mr Michael Robinson, not Crush and Haul as Mr Israel had suggested. The licence application form was accompanied by the management agreements (or leases) of Corindi Quarry between Mr Apokis (lessor) and Mr Robinson (lessee) but not the submanagement agreement (or sublease) between Mr Robinson and Crush and Haul; a development consent granted on 25 November 1991 for the quarry; "a supporting report to provide EPA with additional information associated with the applicant and the site"; and "a copy of the previous EPL which was issued previously by the EPA for the same activities as those proposed". The attached management agreements from Mr Apokis to Mr Robinson dated 21 August 2017 and 15 January 2018 contained the same clause as the clause in the submanagement agreement that the lessee (Mr Robinson) "is to ensure continuous productivity and a bare minimum of 30,000 tonnes per annum out the gate" (clause 10).
The previous environment protection licence dated 19 May 2015 was issued to Wyanga Holdings Pty Ltd authorising the carrying on of land-based extractive activity at Corindi Quarry. The scale at which the activity was authorised to be carried on was "> 30,000-50,000T extracted, processed or stored" (condition A1.1). As earlier noted, the previous operator of Corindi Quarry, Wyanga Holdings Pty Ltd, and Mrs Cauchi as its director, were convicted and fined for breaching s 48(2) of the POEO Act by extracting more than this extraction limit specified in the environment protection licence.
The supporting report stated that the applicant, Mr Michael Robinson, had engaged Mr Israel's firm to apply for an environment protection licence to carry on the scheduled activity at the premises (p 1). The supporting report gave details about Mr Robinson (p 3) and explained why he was a fit and proper person to hold an environment protection licence (p 18). The report stated: "Based on the applicant's environmental performance over the past 15 years, it is clearly evident that the applicant is a Fit and Proper person. The applicant has never been in breach of any environmental or planning legislation." (p 18).
The supporting report failed to disclose that the person who was already operating, and would continue to operate, Corindi Quarry was Crush and Haul and not Mr Robinson.
The supporting report gave the reason for applying for an environment protection licence: "The applicant was made aware that the activities undertaken at the Corindi Quarry would need to be licensed if the extraction of materials is to exceed 30,000 tonnes per year. The applicant took the initiative in applying to the EPA early to ensure that the activities are operated within current NSW legislation and meet EPA's requirements." (p 1 of the report).
The supporting report noted that the previous environment protection licence had been suspended: "It has been drawn to the applicant's attention that the previous operators of the facility had an EPL No 13330 which was issued by the EPA on 31 January 2011 and varied at different stages of the previously undertaken activities. Based on the EPA's Public Register, it appears that this EPL (No 13330) was suspended on 2 April 2015, and revoked on 19 May 2015 due to the previous licence holder being placed into liquidation. The proposed activities are exactly the same as those previously undertaken by Wyanga Holdings Pty Ltd and will be undertaken within the same area previously used for the extraction of raw materials." (p 1 of the report).
The supporting report noted that the scheduled activity for which a licence was required was "land-based extractive activity" which involves the extraction, processing or storage of more than 30,000 tonnes per year of extractive materials (p 20 of the report).
The EPA submitted that these documents and discussions establish that Crush and Haul knew that it needed to hold an environment protection licence if it extracted, processed or stored more than 30,000 tonnes of extractive materials at Corindi Quarry and that it expected to exceed that 30,000 tonnes threshold "in a couple of weeks" from 18 April 2018. That explains the time constraints to which Mr Israel referred in making the application for the environment protection licence to the EPA.
In fact, Crush and Haul did exceed the 30,000 tonnes threshold by about 16 May 2018, as it had by that date supplied more than 30,000 tonnes of extractive materials from Corindi Quarry (paragraph 34 of the statement of agreed facts).
By 1 July 2018, Crush and Haul had supplied 49,512.46 tonnes of extractive materials from Corindi Quarry, exceeding the 30,000 tonnes threshold by 19,512.46 tonnes (paragraph 38 of the statement of agreed facts).
Yet still Crush and Haul continued to carry on the extractive activity at Corindi Quarry. On 19 July 2018, Crush and Haul engaged contractors to carry out a blast at Corindi Quarry to extract rock and clay. The 19 July 2018 blast extracted an estimated 35,600 tonnes of rock and clay from Corindi Quarry (paragraph 40 of the statement of agreed facts).
Crush and Haul recorded and invoiced customers for the tonnages of extractive materials supplied to customers. The EPA prepared a table from the invoices issued by Crush and Haul to its customers in the period from 1 January to 31 December 2018, showing 92,966.28 tonnes of extractive materials were extracted, processed and stored at Corindi Quarry (paragraphs 52 and 53 and the table at tab 6 of the statement of agreed facts). This total tonnage exceeded the 30,000 tonnes threshold by 62,966.28 tonnes.
During this period, Crush and Haul knew that the EPA had not issued an environment protection licence authorising Crush and Haul to carry on the scheduled activity of land-based scheduled activity at the scale of 30,000-50,000 tonnes of extractive material or at all. Crush and Haul knew that the previous environment protection licence issued to a different operator, Wyanga Holdings Pty Ltd, had been suspended and did not authorise Crush and Haul to carry on the scheduled activity at Corindi Quarry.
Crush and Haul instructed Mr Israel to apply for an environment protection licence to authorise Crush and Haul to carry on the scheduled activity at Corindi Quarry, as it expected to exceed the 30,000 tonnes threshold within a couple of weeks of 18 April 2018. However, it instructed Mr Israel to apply for the licence in the name of Mr Robinson instead of Crush and Haul, to avoid the EPA realising that the Cauchi family "have a share of the pie", as Mr Israel had recommended. This was futile as an environment protection licence is personal to the operator - the licence authorises the holder of the licence to carry on the licensed scheduled activity at the premises. Mr Robinson was not carrying on the scheduled activity of land-based extractive industry at Corindi Quarry, Crush and Haul was, so that any environment protection licence the EPA might issue to Mr Robinson would not authorise Crush and Haul to carry on the land-based extractive activity at Corindi Quarry.
In any event, however, Crush and Haul knew at all relevant times after the application for the environment protection licence had been lodged on 1 May 2018, that the EPA had not issued the environment protection licence. There was correspondence that indicated the EPA was considering the licence application but nothing suggesting that the EPA had issued the licence. For instance, on 28 May 2018, Mr Israel advised Crush and Haul by email that the licence application with the EPA was still pending (paragraph 35 of the statement of agreed facts).
On 5 July 2018, the EPA provided a draft environment protection licence to Mr Israel for comment and requested further information (paragraph 37 of the statement of agreed facts). On 18 July 2018, Mr Israel provided the EPA with comments on the draft environment protection licence and supplied further information as requested by the EPA (paragraph 37 of the statement of agreed facts).
On 13 August 2018, the EPA provided a further draft of the environment protection licence to Mr Israel and asked further questions (paragraph 42 of the statement of agreed facts). On 11 September 2018, the EPA emailed Mr Israel seeking clarification of access arrangements advising that the application for the environment protection licence would need to include access arrangements before the EPA could finalise its assessment of the application (paragraph 44 of the statement of agreed facts).
On 3 October 2018, Mr Israel emailed the EPA regarding the delay in determining the application for an environment protection licence (paragraph 45 of the statement of agreed facts). On 15 October 2018, the EPA replied to Mr Israel advising that the assessment of the application was continuing (paragraph 46 of the statement of agreed facts).
On 7 November 2018, the EPA issued to Crush and Haul a statutory notice to provide information and records regarding operations at Corindi Quarry (at paragraph 47 of the statement of agreed facts). Earlier, on 14 August 2018, the EPA had received an anonymous report of over-extraction at Corindi Quarry through the EPA's Environment Line (paragraph 43 of the statement of agreed facts).
On 31 December 2018, Mr Israel emailed the EPA advising that, since 4 December 2018, he had "ceased to be involved in any aspects associated with the Corindi Quarry" (paragraph 48 of the statement of agreed facts).
The next year, on 29 July 2019, Mr Robinson withdrew the application for environment protection licence, saying in his letter of withdrawal: "I now understand that that application needs to be submitted in the contractor's name which is Crush and Haul Pty Ltd" (paragraph 49 of the statement of agreed facts).
The EPA submitted that Crush and Haul was aware from this correspondence that the EPA had not issued an environment protection licence authorising Crush and Haul to carry on the land-based extractive activity at Corindi Quarry.
Crush and Haul did not dispute these facts. Nevertheless, it submitted that it laboured under two mistaken beliefs. The first belief was said to be that Crush and Haul was carrying on land-based extractive industry at Corindi Quarry within the 30,000 tonnes threshold. The second belief was that it was sufficient for an application for an application for an environment protection licence to carry on land-based extractive activity at Corindi Quarry to have been made even if an environment protection licence had not been issued. Crush and Haul submitted that by reason of these mistaken beliefs, it did not operate the quarry recklessly.
The evidentiary basis for the first belief was said to be the evidence of Mr Cauchi, Mrs Cauchi and Ms Sweid.
Mr Cauchi noted in his affidavit that he had understood that Mr Israel had submitted in early May 2018 the application for an environment protection licence for 50,000 tonnes. Mr Cauchi said: "Once the application for an EPL was submitted, I recall Mum telling me that we had a green light to keep quarrying because of what Nicolas had said to her. I trusted my Mum on this as the paperwork and approvals were her area. I assumed we could keep going at Corindi Quarry because she never told me to stop." (paragraph 13, affidavit of Mr Cauchi dated 26 May 2022).
Mr Cauchi later stated in his affidavit: "Up and until receiving the Notice from the EPA, I believed that Crush and Haul was not doing anything wrong in continuing to operate at Corindi Quarry. I thought that Mum had everything under control by engaging external experts for licensing and approvals." (paragraph 16, affidavit of Mr Cauchi dated 26 May 2022).
The notice from the EPA to which Mr Cauchi referred was the notice issued on 8 November 2018 requiring Crush and Haul to provide information and records regarding operations at Corindi Quarry. Mr Cauchi responded to the EPA by letter dated 24 January 2019, in his capacity as director of Crush and Haul. Mr Cauchi offered an apology and explanation for Crush and Haul breaching the POEO Act. Mr Cauchi acknowledged that Crush and Haul did not hold, but should have held, an environment protection licence. He said: "I realise that, by CNH [Crush and Haul] not holding an EPL when CNH processed in excess of 30,000 tonnes of material at the quarry in any one year that CNH was in breach of EPA regulations."
In his explanation, Mr Cauchi stated that he had been advised by Mr Israel that the application for the environment protection licence to operate the Corindi Quarry should be made by the lessee of that quarry, Mr Robinson, and that Mr Robinson had made application to the EPA for the provision of an environment protection licence to Mr Robinson. Mr Cauchi acknowledged that this advice was incorrect: "I was unaware until recently when I obtained, what I now know as the correct advice, that the operator of the quarry (in this case, CNH) and not the lessee of the quarry needs to hold the EPL and that CNH should have applied for the EPL."
Mr Cauchi referred to the development consent which he believed allowed Crush and Haul to extract 50,000 tonnes of material from the quarry. Mr Cauchi said he was of the belief that having the determination in place [referring to the development consent that allowed 50,000 tonnes to be extracted] was all that was needed for Mr Robinson to obtain the EPL to haul from the quarry 50,000 tonnes of material. Mr Cauchi stated that he was "persistently advised" by Mr Israel "that the EPL would be issued to Michael Robinson within 60 days of applying".
Mr Cauchi said he now appreciated that Crush and Haul should have applied for the environment protection licence. He stated: "I am extremely upset by the fact that CNH did not apply for and hold the EPL when necessary, however was reliant upon advice being given to me by the ex-EPA officer that the quarry could be operated to the extent that it was being operated and my understanding that, when necessary, the EPL would be held by Michael Robinson and the holding of that EPL would allow CNH to be compliant with EPA regulations."
In cross-examination, Mr Cauchi agreed that: he had read and understood that the submanagement agreement required Crush and Haul to produce a bare minimum of 30,000 tonnes per annum of extractive material out the gate; he knew that an environment protection licence was required if Crush and Haul produced more than 30,000 tonnes of extractive material at Corindi Quarry; he knew that there was likelihood that Crush and Haul would produce more than 30,000 tonnes of extractive material and therefore would need to apply for an environment protection licence; and he knew that his mother, Mrs Cauchi, on behalf of Crush and Haul, had engaged Mr Israel to apply for an environment protection licence for Crush and Haul to be able to produce more than 30,000 tonnes, namely 50,000 tonnes. Mr Cauchi accepted that he knew that an environment protection licence would not be granted immediately, but he said he had been advised that it would be granted in 60 days. He accepted that they anticipated, at the time his mother engaged Mr Israel to apply for an environment protection licence on 18 April 2018, that Crush and Haul would exceed 30,000 tonnes of extractive materials in a couple of weeks. Mr Cauchi accepted that he did not inform Mr Israel when Crush and Haul did exceed 30,000 tonnes of extractive materials. He accepted that this occurred by about 16 May 2018, but said that he was not aware of this at the time.
I do not accept Mr Cauchi's assertion of his belief that Crush and Haul would not and did not exceed the 30,000 tonnes threshold during 2018. Mr Cauchi knew that Crush and Haul was obliged under the submanagement agreement to ensure continuous productivity of the quarry and a bare minimum of 30,000 tonnes per annum out the gate. This is the very same tonnage for requiring an environment protection licence. To comply with its obligation under the submanagement agreement, Crush and Haul had to extract, process and sell out the gate a minimum of 30,000 tonnes of extractive materials. If it produced just 1 tonne more than the 30,000 tonnes minimum, Crush and Haul needed to hold an environment protection licence authorising the land-based extractive activity at Corindi Quarry. Compliance with the submanagement agreement therefore almost certainly required Crush and Haul holding an environment protection licence.
Mr Cauchi was made aware by his mother, Mrs Cauchi, in mid-April 2018 that production at Corindi Quarry would soon exceed 30,000 tonnes. Mr Cauchi was copied in on Mrs Cauchi's email dated 18 April 2018 to Mr Israel. This email clearly stated the need to obtain an environment protection licence for Corindi Quarry for 50,000 tonnes, 20,000 tonnes more than the 30,000 tonnes threshold. Mrs Cauchi advised that Crush and Haul had "taken out nearly 20,000 tonne and only have 10,000 tonne to go which will be done and dusted within a couple of weeks at the rate the clients are requiring material". Mr Cauchi was on notice from this date that Crush and Haul would not be producing the bare minimum of 30,000 tonnes required by the submanagement agreement but instead intended to produce 50,000 tonnes. Moreover, Mr Cauchi was on notice that the 30,000 tonnes threshold would be exceeded in a couple of weeks at current production rates, that is by the beginning of May 2018.
Mr Cauchi's explanation and apology to the EPA in his letter of 24 January 2019 made clear that Crush and Haul intended to haul from the quarry 50,000 tonnes of extractive materials, not 30,000 tonnes. This was the reason for applying for an environment protection licence, as he knew that an environment protection licence was required if Crush and Haul produced more than 30,000 tonnes.
Mr Cauchi's explanation for why Crush and Haul continued to produce extractive materials in excess of 30,000 tonnes was that he believed, on the advice of Mr Israel, that the EPA would grant an environment protection licence for 50,000 tonnes, as this was the tonnage allowed by the development consent, and that the EPA would grant the environment protection licence within 60 days of the application for the environment protection licence being made. These explanations are inconsistent with Mr Cauchi believing that Crush and Haul had not and would not exceed the 30,000 tonnes threshold.
I also do not accept Mr Cauchi's assertion that he believed that Crush and Haul could keep quarrying in excess of 30,000 tonnes once an application for an environment protection licence had been lodged with the EPA, regardless of whether an environment protection licence was actually granted by the EPA. Mr Cauchi made this assertion in his affidavit: "Once the application for an EPL was submitted, I recall Mum telling me that we had a green light to keep quarrying because of what Nicolas [Israel] said to her" (paragraph 13). That assertion is inconsistent with Mrs Cauchi's conduct in engaging Mr Israel on an 18 April 2018 "to obtain an EPL for Corindi Quarry for 50,000 tonnes" and to obtain it quickly as the 30,000 threshold for needing an environment protection licence would be exceeded in a couple of weeks and Mr Israel's responses that obtaining an environment protection licence quickly may be difficult. In his email of 22 April 2018 to Mrs Cauchi, Mr Israel warned that "this does not mean that the EPA will accept the application and process it on time as they have been very difficult in the past, especially on you". Mr Israel added that "as soon as the EPA realizes that you have a share of the pie, they will attempt to make it more difficult". Mr Israel's email to Mr Cauchi, his mother Mrs Cauchi and Ms Sweid on 1 May 2018 again warned: "I am not very confident that an EPL will be issued without the need for additional information."
Mr Israel did add this statement, which is relied upon by Mr Cauchi: "However, the good is that after I submit the application on line [sic] this morning, you have a defense [sic] that you have submitted an application for an EPL. I will let you know how it goes." (paragraph 32 of the statement of agreed facts)"
But this statement does not say what Mr Cauchi asserted that Mr Israel said. It certainly does not say that, because an application for an environment protection licence had been submitted, Crush and Haul "had a green light to keep quarrying", as Mr Cauchi asserted. Mr Israel did say that Crush and Haul "have a defense that you have submitted an application for an EPL", but quite what that means is far from clear. To refer to a defence is to acknowledge an offence. Here, the offence is carrying on a scheduled activity of land-based extractive activity by extracting, processing or storing more than 30,000 tonnes of extractive material per annum without holding an environment protection licence. Mr Cauchi was aware of this offence.
Mr Israel was asserting, erroneously, that Crush and Haul would have a defence to that offence if it had submitted an application for an environment protection licence to carry on that activity. That is to say, Crush and Haul would still be committing the offence of carrying on the scheduled activity of extracting, processing and storing more than 30,000 tonnes per annum without holding a licence authorising that activity, but it might be able to raise a defence of having submitted an application for an environment protection licence. This is not "a green light to keep quarrying", but rather a red light warning that to keep quarrying more than 30,000 tonnes without holding an environment protection licence would be unlawful, although there may be a defence.
Mr Cauchi also called evidence from his mother, Mrs Cauchi, and the administration manager, Ms Sweid. Neither person's evidence assisted Crush and Haul, as whatever belief they held could not be attributed to Crush and Haul.
Mrs Cauchi asserted in her affidavit that: "I was shocked when I heard that the EPA was investigating Crush and Haul's activities at Corindi Quarry. Until I received a copy of the EPA notice, I did not think that Crush and Haul's operations at Corindi quarry were, in any way, not compliant with the applicable extraction limits". (paragraph 32, p 9 of Mrs Cauchi's affidavit of 26 May 2022).
Mrs Cauchi was not at the time of commission of the offence in 2018 a director or a person involved in the management of Crush and Haul and who was in a position to influence the conduct of Crush and Haul in relation to the commission of the offence against s 48(2) of the POEO Act. Mrs Cauchi did act on Crush and Haul's behalf in engaging Mr Israel to apply for an environment protection licence to allow Crush and Haul to extract, process and store up to 50,000 tonnes of extractive material at Corindi Quarry. But otherwise, she was not established to be a director or manager of Crush and Haul. Accordingly, Mrs Cauchi's belief, unless communicated to Mr Cauchi and hence to Crush and Haul and acted on by them, cannot be attributed to Crush and Haul.
In any event, however, Mrs Cauchi's express belief that Crush and Haul's operations did not exceed the applicable extraction limits was inconsistent with Mrs Cauchi's conduct in engaging Mr Israel to apply for an environment protection licence. Mrs Cauchi knew that an environment protection licence was required if Crush and Haul's operations exceeded 30,000 tonnes per annum and she anticipated that Crush and Haul would exceed the 30,000 tonnes threshold in a couple of weeks from 18 April 2018 at the rate clients were requiring material. As a matter of fact, Crush and Haul did exceed the threshold, not in the couple of weeks she had predicted, but in four weeks, by 16 May 2018. The amount of extractive material extracted, processed and stored increased substantially thereafter, especially after the blast on 19 July 2018. This blast produced 35,600 tonnes of extractive material, exceeding the 30,000 threshold in just one blast.
Hence, if the applicable extraction limit that Mrs Cauchi believed Crush and Haul had not exceeded was the 30,000 tonnes threshold for obtaining an environment protection licence, I do not accept that Mrs Cauchi in fact held that belief - it is inconsistent with her conduct and the facts.
Alternatively, if the applicable extraction limit to which Mrs Cauchi was referring was the 50,000 tonnes said to be allowed by the development consent, her asserted belief that this limit was not exceeded at the time might be more understandable. Mrs Cauchi and Mr Israel did reference the development consent allowing extraction of 50,000 tonnes at Corindi Quarry as justifying the EPA issuing an environment protection licence for up to 50,000 tonnes. But this limit in the development consent was irrelevant. The offence with which Crush and Haul was charged was not breaching any extraction limit in the development consent, but rather in not holding an environment protection licence at the time Crush and Haul carried on the activity of extracting, processing or storing extractive material in excess of the 30,000 tonnes threshold. Mrs Cauchi's asserted belief that Crush and Haul's operations did not exceed the higher extraction limit of 50,000 tonnes in the development consent cannot assist in establishing a belief that its operations did not exceed the lower extraction threshold of 30,000 tonnes for holding an environment protection licence.
Ms Sweid was the administration manager for Crush and Haul who recorded in an excel spreadsheet the quantities of the material extracted from the quarry each day as shown on the run sheet and reconciled with the weight dockets. Ms Sweid said she understood the purpose of the spreadsheet was to keep track of material removed from Corindi Quarry to ensure the limit was not exceeded. She said she initially understood that the limit was 30,000 tonnes per year, but by about 30 June 2018 she understood that Crush and Haul had applied for 50,000 tonnes and that 50,000 tonnes was the new limit. Ms Sweid said in her affidavit that prior to Crush and Haul receiving the EPA's notice on 8 November 2018, she "had no reason to believe that Crush and Haul had, at any time during my employment, been operating in excess of any extraction limit" (paragraph 18 of Ms Sweid's affidavit of 26 May 2022).
This belief cannot be attributed to Crush and Haul, Ms Sweid being neither a director nor a person involved in the management of the company and in a position to influence the conduct of the company in relation to the commission of the offence against s 48(2) of the POEO Act. In any event, her belief does not assist Crush and Haul. By her own admission, she believed the new extraction limit after 30 June 2018 was 50,000 tonnes, which exceeded the 30,000 tonnes threshold by 20,000 tonnes. Even if she did believe Crush and Haul did not exceed this limit of 50,000 tonnes, it still could have exceeded the 30,000 tonnes threshold.
For these reasons, I reject Crush and Haul's submission that it believed that it had not exceeded the 30,000 tonnes threshold. To the contrary, I find Crush and Haul was aware that it would and did exceed the 30,000 tonnes threshold that would require it to obtain an environment protection licence but decided to continue carrying on the land-based extractive activity at Corindi Quarry regardless.
I also reject Crush and Haul's submission that it believed that the mere lodgment of the application for an environment protection licence with the EPA was sufficient to allow it to keep quarrying more than 30,000 tonnes of extractive material. That belief was said to be founded on Mr Cauchi's statement that his mother had told him that "we had a green light to keep quarrying" once the application for the environment protection licence was submitted. For the reasons I have given earlier, I do not accept that Mr Israel did make this statement to Mrs Cauchi or Mr Cauchi, or that what Mr Israel did in fact say could be understood as saying this.
In any event, the asserted belief was inconsistent with Mr Cauchi's knowledge that Crush and Haul needed to obtain, not just apply for, an environment protection licence that authorised it to extract, process or store more than 30,000 tonnes of extractive materials at Corindi Quarry.
In these circumstances, I find beyond reasonable doubt that Crush and Haul did commit the offence against s 48(2) of the POEO Act recklessly. Crush and Haul carried on the land-based extractive activity at Corindi Quarry with knowledge or foresight that the particular consequence or circumstance, that an environment protection licence was required for the premises by Crush and Haul extracting, processing or storing more than 30,000 tonnes per annum, was likely to result. The word "likely" conveys "the notion of a substantial - a 'real and not remote' - chance regardless of whether it is less or more than 50 per cent": Boughey v The Queen (1986) 161 CLR 10 at 21; Chief Executive, Office of Environment and Heritage v Brummell (2019) 242 LGERA 241; [2019] NSWLEC 114 at [52].
I find Crush and Haul did have this knowledge or foresight of the likelihood of the consequence or circumstance, that the 30,000 tonnes threshold would be exceeded triggering the need to obtain an environment protection licence, occurring.

Reasons for committing the offence

The carrying out of an offence for financial gain increases its objective seriousness: s 21A(2)(o) of the Crimes (Sentencing Procedure) Act 1999 (Sentencing Act) and Director-General, Department of Environment and Climate Change v Rae (2009) 168 LGERA 121; [2009] NSWLEC 137 at [47], [48].
The EPA submitted that Crush and Haul was operating Corindi Quarry as a commercial operation. The agreed facts are that Crush and Haul invoiced customers of Corindi Quarry $1,918,048.80 for extractive materials in 2018. Of this amount, over $1,800,000.00 was charged for the supply of extractive materials over the 30,000 tonnes threshold. This total does not represent the profit made by Crush and Haul in 2018 (paragraph 54 of the statement of agreed facts).
Crush and Haul accepted that it had gained financially by selling more than 30,000 tonnes of extractive materials from Corindi Quarry in 2018. However, it submitted that the evidence does not establish that this was the reason for it committing the offence. Crush and Haul referred to its mistaken beliefs that, once it had applied for an environment protection licence for 50,000 tonnes, it could keep quarrying in excess of the 30,000 tonnes threshold. Whilst this belief was mistaken in law, it nevertheless explained why Crush and Haul committed the offence. This reason is not consistent with Crush and Haul being "consciously motivated by a desire to receive ill-gotten financial benefit" (paragraph 58 of the outline of sentence submissions for the defendants). The mere fact that Crush and Haul committed the offence in the course of its commercial activities is not sufficient to prove that intended to commit the offence for financial gain: Natural Resources Access Regulator v Tony Thompson [2022] NSWLEC 48 at [133].
I find that the EPA has not established beyond reasonable doubt that Crush and Haul committed the offence for financial gain. Of course, Crush and Haul did gain financially from selling more than the 30,000 tonnes that it would be permitted to extract, process or store at the Corindi Quarry without holding an environment protection licence. But the critical question is whether Crush and Haul committed the offence charged - carrying on the land-based extractive activity at the premises without holding an environment protection licence authorising the extracting, processing or storage of more than 30,000 tonnes of extractive materials per year - for financial gain. Crush and Haul have proffered various explanations for why they did keep quarrying notwithstanding the likelihood and the actuality of exceeding the 30,000 tonnes threshold. I have not accepted these explanations for the purposes of determining whether Crush and Haul acted recklessly in committing the offence. Nevertheless, the EPA has not established any other explanation for committing the offences. The commission of the offence for financial gain is an aggravating circumstance that the prosecutor must prove beyond reasonable doubt. On the evidence before the Court, the EPA has not proven this aggravating circumstance.

Foreseeability of harm

The extent to which an offender could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of an offence is a matter affecting the objective seriousness of the offence: s 241(1)(c) of the POEO Act. The EPA accepted that there was no actual harm caused to the environment caused by Crush and Haul's commission of the offence. For this reason, the EPA also did not submit that Crush and Haul could reasonably have foreseen any harm caused or likely to be caused to the environment by the commission of the offence.

Practical measures to prevent harm

The existence of practical measures to prevent, control, abate or mitigate the harm caused or likely to be caused to the environment is a matter affecting the objective seriousness of an offence: s 241(1)(b) of the POEO Act. As there was no harm caused to the environment and no foreseeability that environmental harm might be caused by the commission of the offence, the EPA did not submit that there were any practical measures that might have been taken to prevent, control, abate or mitigate that harm.

Control over causes of the offence

As Crush and Haul operated Corindi Quarry, it had control over the causes that gave rise to the offence: s 241(1)(d) of the POEO Act.

Conclusion on objective seriousness

By reason of the factors above, I find that the offence against s 48(2) of the POEO Act committed by Crush and Haul is of low to medium objective seriousness.

Objective circumstances of the offender

Within the limits set by the objective seriousness of the offence, the Court may take into account the favourable and mitigating circumstances personal to Crush and Haul.

Lack of prior convictions

A mitigating factor is whether the offender does not have any record or any significant record of previous convictions: s 21A(3)(e) of the Sentencing Act. Although Crush and Haul has received two penalty notices, it has no record of previous convictions. The penalty notices issued in 2016 under s 224 of the POEO Act were for unlawful use of a place as a waste facility and failure to comply with a variation of a Clean Up Notice in respect of premises at Badgerys Creek, Sydney (paragraph 67 of the statement of agreed facts). These penalty notices relating to different activities at different premises six years ago do not establish that Crush and Haul has a significant record of previous convictions.

Early plea of guilty

Crush and Haul has pleaded guilty to the offence: s 21A(3)(k) and s 22(1)(a) of the Sentencing Act. The EPA and Crush and Haul agreed that the plea of guilty was entered at the first listing of the matter on 17 September 2021 and should attract the full discount of 25% for the utilitarian value of the plea of guilty to the criminal justice system.

Remorse

Apart from the utilitarian value of a plea of guilty, genuine remorse is a further mitigating factor. However, s 21A(3)(i) of the Sentencing Act states that remorse shown by an offender for the offence will only be 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)".
Crush and Haul submitted that it has provided evidence of remorse for committing the offence. Mr Cauchi voluntarily wrote to the EPA on 24 January 2019, within a month after committing the offence, accepting responsibility for committing the offence and offering a genuine apology for doing so. Mr Cauchi said: "I sincerely apologise to the community generally, to officers of the EPA and to any person, persons or company that have been affected detrimentally by the failure on the part of CNH to hold the EPL when it exceeded 30,000 tonnes of material hauled from the quarry in any one year."
He added: "I am extremely upset by the fact that CNH did not apply for and hold the EPL when necessary, however was reliant upon advice being given to me by the ex-EPA officer [Mr Israel] that the quarry could be operated to the extent that it was being operated ..."
Mr Cauchi promised to comply with the law in the future: "I sincerely wish to operate the business of CNH in compliance with the EPA regulations…We have now sought and obtained expert advice about these matters so that there is no chance in the future of our breaching those regulations, through our ignorance or through poor advice being given to us."
Mr Cauchi gave evidence and attended in person at the sentence hearing. He stated in his affidavit: "I am ashamed and embarrassed by the fact that Crush and Haul committed this offence while I was in control of the company." (paragraph 18).
Mrs Cauchi also gave evidence and attended the sentence hearing. Mrs Cauchi was not a director at the time Crush and Haul committed the offence but subsequently became a director replacing Mr Cauchi after he resigned as director on 1 February 2022. Mrs Cauchi stated in her affidavit: "The investigation has been embarrassing and stressful for both Crush and Haul and my family. I deeply regret that the company has committed the offence." (paragraphs 33 and 34, p 9 of Mrs Cauchi's affidavit of 26 May 2022).
The EPA questioned whether these statements showed that Crush and Haul had accepted responsibility for its actions or provided acknowledgement of the impact of the offence.
I accept that Crush and Haul is remorseful for committing the offence. As a family run company, Crush and Haul can only speak through the family members who were at the time of commission of the offence or are now the directors of the company. I accept the statements by Mr Cauchi and Mrs Cauchi are sufficient expressions of remorse, accepting responsibility for committing the offence, apologising for doing so, and undertaking not to do so in the future.

Likelihood of reoffending

A mitigating factor is that an offender is unlikely to reoffend: s 21A(3)(g) of the Sentencing Act.
The EPA accepted that Mr Cauchi was unlikely to reoffend, as he has resigned as a director of Crush and Haul and now operates a new business in the civil and transport industry. However, the EPA submitted that this does not mean that Crush and Haul is unlikely to reoffend. Mr Cauchi has been replaced by Mrs Cauchi as the sole director of Crush and Haul. Mrs Cauchi has a record of prior convictions. Companies of which Mrs Cauchi has been a director have been convicted for offences against s 48(2) of the POEO Act and Mrs Cauchi has also been convicted as a director of those companies which committed executive liability offences. These involve convictions for offences under the POEO Act in relation to exceedances of the extraction limit under an environment protection licence at Corindi Quarry (Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2015] NSWLEC 78) and a conviction for breach of s 48(2) of the POEO Act by another company at a different quarry (Environment Protection Authority v Rixa Quarries (No 2) Pty Ltd (No 2) [2017] NSWLEC 93).
In these circumstances, the EPA submitted that Mrs Cauchi has demonstrated a continuing attitude of disobedience towards obligations under the POEO Act, such that it cannot be concluded that Crush and Haul is unlikely to reoffend so long as Mrs Cauchi is a director of the company.
Crush and Haul submitted that it is unlikely to reoffend. As Mr Cauchi explained in his letter to the EPA of 24 January 2019, Crush and Haul has sought and obtained expert advice about its obligations under the POEO Act and has undertaken not to breach the POEO Act in the future. Crush and Haul submitted that in the three and a half years since then, Crush and Haul has continued to operate without any further adverse incidents.
I accept that there is a risk that Crush and Haul might reoffend whilst Mrs Cauchi is the sole director of Crush and Haul. Her record as a director of companies that breach the POEO Act is not a good one. Nevertheless, lessons can be learnt even if belatedly. I consider that in circumstances where Mrs Cauchi is the director of Crush and Haul there is a need for the sentence imposed on Crush and Haul for its offence to reflect specific deterrence. If this is done, Crush and Haul should be less likely to reoffend.

Purposes of sentencing

In imposing the sentence on Crush and Haul for its offence, I take into account the purposes of sentencing in s 3A of the Sentencing Act. The purposes of punishment, retribution and denunciation are relevant. There is the need for the Court, through the sentence it imposes, to ensure that Crush and Haul will be adequately punished for the offence and held accountable for its actions and that its conduct is denounced in proportion to the seriousness of the offence.
The sentence needs to act as a deterrent. The purpose of general deterrence is relevant to ensure that persons do not carry on a scheduled activity at premises without holding an environment protection licence authorising the carrying on of that activity at the premises. The purpose of general deterrence can be better achieved by making an additional order publicising the sentence imposed for the offence. The sentence also needs to specifically deter Crush and Haul from committing like offences against the POEO Act in the future. As I have indicated, there is a need for specific deterrence whilst Mrs Cauchi remains the sole director of Crush and Haul.

The appropriate penalty

Synthesising all of the relevant objective and subjective circumstances of the offence and Crush and Haul as the offender, and considering the purposes of sentencing, I consider the appropriate fine for the offence is $300,000. This amount should be discounted by 25% for the utilitarian value of the plea of guilty. This makes the amount $225,000.

Moiety of the fine and costs ordered

The EPA seeks an order pursuant to s 122(2) of the Fines Act 1996 directing the payment of one half of any fine imposed on Crush and Haul to the EPA as the prosecutor. This was not opposed by Crush and Haul. I consider it is appropriate to exercise the discretionary power under s 122(2) of the Fines Act to direct that one half of the fine of $225,000 be paid to the EPA.
The prosecutor sought an order for costs under s 257B of the Criminal Procedure Act 1986. Crush and Haul agreed to the Court making an order for costs but noted that the parties had yet to agree on the amount of costs. Crush and Haul submitted that the Court can make an order that Crush and Haul pay the prosecutor's costs in an amount as agreed or as may be determined under s 257G of the Criminal Procedure Act.

Publication order

The EPA sought for the Court to make a publication order under s 250(1)(a) of the POEO Act. The EPA proffered a form of the publication order. Although Crush and Haul initially opposed the Court making a publication order, by the conclusion of the sentencing hearing, it agreed to the making of a publication order with respect to Crush and Haul but not Mr Cauchi. Crush and Haul made some submissions about the wording of the publication order. It suggested that it would be sufficient to publish the order in the Daily Telegraph but not also the Sydney Morning Herald, and in the Coffs Coast News of the Area but not also the Northern Rivers Times. It also submitted that the exceedance of the 30,000 tonnes threshold should be stated as being "around" 60,000 tonnes, instead of "over" 60,000 tonnes.
The EPA disagreed with these suggested amendments of the publication order. The Daily Telegraph has around half of the circulation of the Sydney Morning Herald, whilst the circulation of the Coffs Coast News is 16,000 compared to 220,000 for the Northern Rivers Times. The word "over" is more accurate factually than "around" and therefore should be retained.
I agree with the EPA's version of the publication order. The purpose of the publication order is general deterrence. To achieve this purpose, the publication order needs to be published widely. Publication in the Sydney Morning Herald and the Northern Rivers Times, which both have greater circulation, better achieve this purpose of general deterrence: see Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90 at [76]. The word "over" is more factually accurate than the word "around" in describing the extent of the exceedance of the 30,000 tonnes threshold and should be retained.

Mr Cauchi's sentence

As with Crush and Haul, the appropriate sentence for Mr Cauchi needs to reflect both the objective seriousness of the offence against s 169A(2) of the POEO Act committed by Mr Cauchi and the objective and mitigating circumstances of Mr Cauchi. In addressing the objective and subjective circumstances, I will not repeat the facts and analysis I have given for Crush and Haul's offence where these are equally applicable to Mr Cauchi's offence, but will add facts and analysis where there are differences.

Maximum penalty

The maximum penalty for an offence against s 169A(2) of the POEO Act is the maximum penalty for the executive liability offence, s 48(2) of the POEO in this case, if committed by an individual. This is $250,000, and in the case of a continuing offence, a further penalty of $60,000 for each date the offence continues. Neither Crush and Haul nor Mr Cauchi were charged with a continuing offence.

The extent of harm caused by the offence

A relevant objective circumstance is the extent of harm caused or likely to be caused by the commission of the offence: s 241(1)(a) of the POEO Act. Just as the EPA did not contend that Crush and Haul's commission of the offence against s 48(2) of the POEO Act caused actual environmental harm, so too the EPA did not contend that Mr Cauchi's commission of the offence against s 169A(2) of the POEO Act caused actual environmental harm. The EPA did contend, as it had for Crush and Haul, that Mr Cauchi's commission of the offence against s 169A(2) undermined the achievement of the objects of the POEO Act and the integrity of the regulatory scheme.
I agree. The legislative objective expressed in the offence against s 169A of the POEO Act is for a person who, firstly, is a director of a corporation or an individual involved in the management of the corporation and in a position to influence the conduct of a corporation in relation to the commission of an offence classified as an executive liability offence, such as the offence against s 48(2) of the POEO Act, and, secondly, knows or ought reasonably to know that the executive liability offence would be or is being committed, to take all reasonable steps to prevent or stop the commission of the offence. Here, Mr Cauchi, as the sole director of Crush and Haul, was the central person involved in the management of Crush and Haul and was in a position to influence the conduct of Crush and Haul to prevent or stop it committing the offence against s 48(2) of the POEO Act. Mr Cauchi could have ensured that Crush and Haul did not extract, process or store more than 30,000 tonnes of extractive materials at Corindi Quarry without first obtaining and holding an environment protection licence that authorised the carrying on of that activity at the premises. Mr Cauchi's failure to control the conduct of Crush and Haul in this regard was contrary to the legislative objective expressed in the offence, impeded the attainment of the objects of the POEO Act and undermined the integrity of the regulatory scheme.

State of mind

The commission of the offence against s 169A(2) of the POEO Act with a heightened state of mind will add to the objective seriousness of the offence. The EPA contended, as it had for Crush and Haul, that Mr Cauchi committed the offence recklessly. The EPA submitted that Mr Cauchi did not exercise appropriate oversight of Crush and Haul in relation to its obligations under the POEO Act to hold an environment protection licence authorising its activities at Corindi Quarry.
Instead, the EPA submitted, Mr Cauchi delegated all responsibility for Crush and Haul's compliance with its obligations to Mrs Cauchi and Ms Sweid. The EPA submitted it was not appropriate for Mr Cauchi to have delegated all responsibility to Mrs Cauchi in circumstances where Mrs Cauchi had prior convictions for breaches of the POEO Act when she was a director of Wyanga Holdings Pty Ltd that exceeded the extraction limits under its environment protection licence at Corindi Quarry and further was a director of another company, Rixa Quarries (No 2) Pty Ltd, which was convicted and fined for also breaching s 48(2) of the POEO Act for processing more than 30,000 tonnes of sand for sale when it did not hold an environment protection licence enabling it to do so. The EPA submitted that it was inappropriate for Mr Cauchi to delegate responsibility to Ms Sweid to look after compliance with the POEO Act in circumstances where Ms Sweid had no relevant experience in doing so prior to commencing her employment with Crush and Haul.
The EPA submitted that Mr Cauchi's reliance on Mr Israel to obtain the environment protection licence was misplaced. The evidence did not establish that Mr Cauchi or anyone else informed Mr Israel that Crush and Haul had exceeded the 30,000 tonnes threshold around 16 May 2018 or that Mr Cauchi sought clarification from Mr Israel as to what he meant when he said that Crush and Haul would have a defence that it had submitted an application for an environment protection licence.
Mr Cauchi accepted that he did fail to take all reasonable steps to prevent or stop the commission of the offence against s 48(2) of the POEO Act by Crush and Haul. Some of the reasonable steps that Mr Cauchi could have taken, but did not take, would have been to be more involved personally rather than rely on his mother, Mrs Cauchi, Ms Sweid, Crush and Haul's administration manager, and Mr Israel, the consultant who had been engaged to apply for and obtain the environment protection licence. But Mr Cauchi submitted that his failure to take such reasonable steps is an element of the offence against s 169A(2) of the POEO Act: see s 169A(2)(c)(ii). Such a failure does not separately reveal recklessness.
Mr Cauchi further submitted that his reliance on Mr Israel and Mrs Cauchi was understandable in the circumstances. Mr Israel had previously worked for the EPA and was familiar with the regulatory system for licensing of scheduled activities. He had been engaged by other companies in the Cauchi family's group of companies in relation to the environment protection licences for the company's activities. As Mr Cauchi said in his affidavit: "I understood that Mum had engaged Nicolas Israel to prepare and obtain the EPL from the EPA on our behalf. I knew Nicolas Israel because for a number of years he had been engaged by my family's businesses to assist on numerous projects. Although it wasn't my call as my mum looked after this stuff, I believed that engaging Nicolas Israel was the best way to obtain an EPL and ensure that Crush and Haul was legally compliant. I thought this because: (a) The company was paying him, an environmental consultant, significant fees to complete the tasks assigned to him as an external expert. (b) Prior to this job, the company had a good track record with Nicolas. I believed he had given us good advice. (c) I knew he had previously worked at the EPA and had experience with applying for environment protection licences". (paragraph 7).
Mr Cauchi submitted that his reliance on his mother, Mrs Cauchi, was understandable. Crush and Haul was one of a number of family companies run as part of a close family business. His mother had much longer experience at running the companies than Mr Cauchi had had, including in knowing when and how to obtain environment protection licences authorising the carrying on of the company's activities.
The fact that Mrs Cauchi did not, on this occasion, succeed in obtaining an environment protection licence before Crush and Haul exceeded the 30,000 tonnes threshold did not make Mr Cauchi's reliance on her reckless in the circumstances.
Mr Cauchi submitted that he had been told, and believed, that the making of an application for an environment protection licence was sufficient to allow Crush and Haul to keep quarrying and that the EPA would issue an environment protection licence within 60 days. The fact that the first was legally incorrect and the second proved factually incorrect did not mean that Mr Cauchi acted recklessly in believing and relying on this information.
As to Mr Cauchi's reliance on Ms Sweid, Mr Cauchi submitted that the clearly described nature of Ms Sweid's particular role in recording outgoing extractive materials did not require any particular knowledge or experience. There was no evidence suggesting that Mrs Cauchi had inadequately trained Ms Sweid to perform this role. Mr Cauchi further submitted that the problems that gave rise to Crush and Haul committing the offence against s 48(2) of the POEO Act did not stem from any failure of Ms Sweid to accurately record the amounts of extractive materials being quarried and sold out the gate, but rather from the erroneous advice from Mr Israel and the delay in obtaining an environment protection licence authorising the carrying on of the extractive activity at Corindi Quarry.
I find that the EPA has not established beyond reasonable doubt that Mr Cauchi committed the offence against s 169A(2) of the POEO Act recklessly. Mr Cauchi's conduct, including his reliance on Mr Israel, Mrs Cauchi and Ms Sweid, may have fallen short of what was required to discharge his duties as a director of Crush and Haul, but that was what gave rise to him committing the offence against s 169A(2) of the POEO Act. An element of the offence committed by Mr Cauchi was that he, as a director of Crush and Haul, knew or reasonably ought to have known that Crush and Haul would or was committing an offence against s 48(2) of the POEO Act, and failed to take all reasonable steps to prevent or stop the commission of the offence. The various matters the EPA identified as evidencing Mr Cauchi's recklessness in committing the offence against s 169A(2) of the POEO Act are in fact illustrations of Mr Cauchi's failure to take reasonable steps to prevent or stop Crush and Haul committing the offence against s 48(2) of the POEO Act. As an element of the offence committed by Mr Cauchi, his taking of certain steps and failing to take other steps identified by the EPA is not evidence of recklessness in committing the offence, only of committing the offence.
In this circumstance, it is not necessary to determine whether Mr Cauchi's conduct was reckless. I have earlier found that Crush and Haul acted recklessly in committing the offence against s 48(2) of the POEO Act. That finding depended on my not accepting Mr Cauchi's various beliefs about whether Crush and Haul would be or was committing an offence against s 48(2) of the POEO Act. The finding cannot necessarily be transposed to determine whether Mr Cauchi himself committed the offence against s 169A(2) of the POEO Act recklessly. But it is not necessary to decide this as however deficient his conduct as a director of Crush and Haul might have been, it did not cause him to commit the offence against s 169A(2) recklessly, but only to cause him to commit that offence.

Reasons for committing the offence

The EPA did not contend that Mr Cauchi committed the offence against s 169A(2) of the POEO Act for financial gain.

Foreseeability of harm and practical measures to prevent harm

The EPA did not contend that Mr Cauchi's commission of the offence against s 169A(2) of the POEO Act caused actual environmental harm, that there was foreseeability of environmental harm, or that there were practical measures that might have been taken to prevent, control, abate or mitigate any environmental harm.

Control over causes of the offence

As Mr Cauchi was the director of Crush and Haul, he had control over the causes that gave rise to his commission of the offence against s 169A(2) of the POEO Act.

Conclusion on objective seriousness

By reason of the factors above, I find that the offence against s 169A(2) of the POEO Act committed by Mr Cauchi is of low objective seriousness.

Subjective circumstances

The Court takes into account the following subjective and mitigating circumstances personal to Mr Cauchi.

Lack of prior convictions

Mr Cauchi has been issued with a penalty notice in 2016 for unlawful use of a place as a waste facility at Badgerys Creek, Sydney. The issue of a penalty notice for a different offence at a different place six years ago does not cause Mr Cauchi to have a significant record of previous convictions. He is entitled to be sentenced on the basis that he does not have a significant record of previous convictions: s 21A(3)(e) of the Sentencing Act.

Prior good character

Mr Cauchi submitted another mitigating circumstance is that he is of prior good character: s 21A(3)(f) of the Sentencing Act. Mr Cauchi tendered three character references, from Dr Anne Zahra, Mr Robert Blacker and Ms Luke Cutajar. Each spoke of Mr Cauchi being an honest and hardworking man who seeks to conduct his business in accordance with the law. They considered that the offence he committed was out of character. I accept that Mr Cauchi is a person of prior good character.

Early plea of guilty

Mr Cauchi pleaded guilty to the offence against s 169A(2) of the POEO Act at the earliest available opportunity. The parties agree that he should be afforded the full discount of 25% for the utilitarian value for the plea of guilty to the criminal justice system.

Remorse

Mr Cauchi has expressed his genuine remorse for committing the offence, I have set out earlier Mr Cauchi's expressions of remorse in his letter to the EPA on 24 January 2019 shortly after committing the offence and in his affidavit. I accept Mr Cauchi's statements as evidencing his remorse for committing the offence. He has accepted responsibility for committing the offence, apologised for doing so and undertaken not to do so in the future.

Likelihood of reoffending

Mr Cauchi resigned as a director of Crush and Haul in February 2022 and now runs a different business in the civil and transport industry in the Sydney region. The EPA accepted that Mr Cauchi is unlikely to reoffend.
In circumstances where Mr Cauchi has insight into his offending in this case, is genuinely remorseful for offending and has changed his business, I find that he is unlikely to reoffend.

Purposes of sentencing

As with Crush and Haul, there is a need for the Court's sentence to ensure that Mr Cauchi is adequately punished for his offence and held accountable for his actions and that his conduct is denounced in proportion to the seriousness of the offence. The sentence needs to serve as a general deterrent to other directors or managers of corporations to ensure that they take reasonable steps to prevent or stop the commission of offences by the corporation. Publication of the sentence can assist in general deterrence.
The sentence needs also to individually deter Mr Cauchi from reoffending, although this purpose is less important in this case as I find that Mr Cauchi is unlikely to reoffend.

The appropriate penalty

Synthesising all the relevant objective and subjective circumstances, and considering the purposes of sentencing, I consider the appropriate penalty for the offence to be a fine of $30,000. Applying the 25% discount for the utilitarian value of Mr Cauchi's plea of guilty, the amount becomes $22,500.
Mr Cauchi submitted that the Court, under s 10(1)(a) of the Sentencing Act, without proceeding to conviction, can make an order directing that the relevant charge be dismissed. Mr Cauchi submitted that such an order would be appropriate having regard to the factors in s 10(3) of the Sentencing Act. I do not agree. There is nothing regarding Mr Cauchi's character, antecedents, age, health or mental condition that would support making an order under s 10(1)(a). The offence against s 169A(2) of the POEO Act committed by Mr Cauchi is not trivial. There are no extenuating circumstances in which Mr Cauchi committed the offence. Mr Cauchi did not refer to any other matter justifying the Court exercising the discretion to make an order under s 10(1)(a) of the Sentencing Act. Convicting and finding Mr Cauchi for the offence he committed is the appropriate sentence in the circumstances of this case.

Moiety of the fine and costs order

As with Crush and Haul, I consider it is appropriate to direct that half of the fine of $22,500 be paid to the EPA as prosecutor and that Mr Cauchi be ordered to pay the EPA's costs in an amount as may be agreed or determined under s 257G of the Criminal Procedure Act.

Publication order

As with sentencing Crush and Haul, I consider a publication order should be made in relation to the sentence imposed for Mr Cauchi's offence in order to further the purpose of general deterrence.
Mr Cauchi submitted that the publication order should refer only to the sentence imposed on Crush and Haul but not to the sentence imposed on Mr Cauchi. He submitted that the unique factual circumstances of his offending made it particularly inappropriate for general deterrence, diminishing the corresponding justification for publication of the sentence for the offence. Alternatively, he submitted that the publication order should refer simply to a director of the company being sentenced, not to Mr Cauchi by name.
The EPA submitted that the publication order should refer to Mr Cauchi's commission of the offence against s 169A(2) of the POEO Act and by name and not just his capacity as a director of Crush and Haul. The EPA submitted that greater deterrence will be achieved if directors of corporations know that they might be named in a publication order if they commit an offence against s 169A(2) of the POEO Act.
I consider that the publication order should include reference to both Crush and Haul committing and being convicted and sentenced for the offence against s 48(2) of the POEO Act and Mr Cauchi committing and being convicted and sentenced for the offence against s 169A(2) of the POEO Act. The primary purpose of a publication order is general deterrence. People and businesses wishing to carry on a scheduled activity on premises need to be deterred from doing so without holding an environment protection licence authorising the carrying on of that activity on the premises. Directors of a corporation or other persons involved in the management of the corporation that might commit an executive liability offence under the POEO Act need to be deterred from failing to take all reasonable steps to prevent or stop the corporation from committing that offence. Such general deterrence will occur only by naming the persons who commit the offences. Directors and persons involved with the management of a corporation carrying on scheduled activities are more likely to be deterred if they know that, if they commit an offence against s 169A(2) of the POEO Act, they too might be named in a publication order.
The publication order should be published in the newspapers specified by the EPA for the reasons I gave when determining the publication order that should be published with respect to Crush and Haul's sentence.

Orders

The Court makes the following orders: In proceedings 2021/224806 Environment Protection Authority v Luke Cauchi: 1. Luke Cauchi is convicted of the offence against s 169A(2) of the Protection of the Environment Operations Act 1997 as charged. 2. Luke Cauchi is fined $22,500. 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. 4. Pursuant to s 257B of the Criminal Procedure Act 1986, Luke Cauchi is to pay the Environment Protection Authority's costs as agreed or as may be determined under s 257G of the Criminal Procedure Act 1986. In proceedings 2021/224814 Environment Protection Authority v Crush and Haul Pty Ltd: 1. Crush and Haul Pty Ltd is convicted of the offence against s 48(2) of the Protection of the Environment Operations Act 1997 as charged. 2. Crush and Haul Pty Ltd is fined $225,000. 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. 4. Pursuant to s 257B of the Criminal Procedure Act 1986, Crush and Haul Pty Ltd is to pay the Environment Protection Authority's costs as agreed or as may be determined under s 257G of the Criminal Procedure Act 1986. In proceedings 2021/224806 and 2021/224814: 1. Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997, Mr Luke Cauchi and Crush and Haul Pty Ltd, at their own expense, are to: 1. Within 28 days of this order, cause a notice of a minimum size as close as practicable to 180cm2 to be published within the first 12 pages of the Quarry Magazine, Sydney Morning Herald, Daily Telegraph, Coffs Coast News of the Area and Northern Rivers Times with the text of such notice to be as set out in Annexure A to these orders; and 2. Within 42 days of the date of this order, provide to the Environment Protection Authority, a copy of the entire page of the Quarry Magazine, Sydney Morning Herald, Daily Telegraph, Coffs Coast News of the Area and Northern Rivers Times, on which the notice was published in accordance with paragraph (a) above.

Annexure A - 2021.224806 & 2021.224814 EPA v Crush and Haul; EPA v Cauchi (72397, pdf) 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: 08 September 2022

Environment Operations Act 1997(NSW)

(2019) 242 LGERA 241

(2009) 168 LGERA 121

(2009) 170 LGERA 253

Environment Protection Authority v Crush and Haul Pty Ltd; Environment Protection Authority v Cauchi

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