Environment Protection Authority v Daryl McCarthy Constructions Pty Ltd

The Defendant has pleaded guilty to three separate charges of an offence against the Environmental Offences and Penalties Act 1989, in that it did pollute waters contrary to the Clean Waters Act 1970, s 16(1).

The first offence occurred on or about 19 January 1999; the second offence occurred on or about 22 February 1999; and the third offence occurred on or about 30 June 1999. The offences all occurred at the same place, namely the waters of Tenterfield Creek when they were polluted, by virtue of the discharge from the Defendant's premises situated Sunnyside via Tenterfield, some 10 km removed from the township of Tenterfield, of waste containing non filtrable residues.

The Defendant operates at the aforesaid premises, a gravel manufacturing plant. The premises were licensed under the Pollution Control Act at the time the offences took place, and in terms of the conditions of licence it was permitted to discharge wastes from a drain leading from the waste water treatment ponds established on the Defendant's premises, into Tenterfield Creek. Condition W1 of Licence limited the volume of wastes discharged so that they would not exceed 400 kilolitres on any day.

Condition W1 also limited the wastes that might be so discharged by proscribing the discharge of waste which contained more than 150 milligrams per litre of non-filtrable residue.

The Court has had the benefit of a Statement of Agreed Facts which sets out the extent whereby the sampled waste waters discharging into Tenterfield Creek exceeded the licensed maximum. In the case of the first offence the laboratory result of the sample indicated non-filtrable residues of some 1100 milligrams per litre.

In the case of the second offence, the laboratory results of the sampled discharge waste indicated a level of non-filtrable residues of 2,000 milligrams per litre, and in the case of the third offence, the laboratory results of the sample discharge revealed a level of non-filtrable residues of some 800 milligrams per litre. It is apparent that each of the discharges so sampled, significantly exceeded the licence requirements. Hence, the existence of the licence does not provide a defence or excuse in terms of the Clean Waters Act, s 16 and hence the three charges allege offences against that particular section.

Although the relevant legislation, creating the offences with which the Defendant is charged has been repealed by the Protection of Environment Operations Act 1997, which came into force on 1 July 1999 (that is, after the dates upon which the three offences were committed in the present case) liability under the repealed statutes is continued by dint of relevant transitional provisions made in the 1997 Act read with the provisions of the Interpretation Act 1987 (s 30).

The Defendant has operated its gravel processing plant at the aforesaid premises for some 20 years, and has held a relevant licence under the Pollution Control Act, I assume for the period that it has operated, although this is not entirely clear on the evidence.

The processing of rock by the crusher installed at the Defendant's plant, produces, fines, and when washed (and washing water is employed in the process) high levels of sediment are created in the wash material. Indeed, according to Dr Lott's report which I accept and is not challenged, immediately upon the washing and processing procedures being completed, the waste waters can contain between six and a half thousand milligrams per litre to eight and a half thousand milligrams per litre of sediment. It follows that the Licence condition permitting ultimate discharge to Tenterfield Creek of waste waters containing no more than 150 milligrams per litre, requires considerable treatment at the plant if the waste waters licensed to be discharged into Tenterfield Creek are to comply with the licence requirements.

The facts indicate, that at the time of the respective offences the plant relied upon a series of three interconnected settlement ponds, to achieve the settling out of the sediment so that any waste waters ultimately discharged into Tenterfield Creek might comply with the licence requirement, although Dr Lott's report (following his engagement by the Defendant, at a date soon after the commission of the third offence with which the Defendant has been charged) indicates the almost insuperable difficulties confronting the Defendant in seeking to comply with its licence requirements.

It was because of that fact that, I infer, Dr Lott has given advice to the Defendant to significantly modify and upgrade the waste water treatment system installed in the plant so as to minimise, if not entirely eliminate, the need for waste waters to be discharged into Tenterfield Creek. He has made recommendations to the Defendant that the existing three interrelated settlement ponds or dams be improved in their capacity to carry the waste waters, and that a system of recycling of the waters be employed. A further alternative scheme contemplates pumping the waste waters to an agricultural property on the other side of Tenterfield Creek. This scheme has not yet been implemented, but even without it Dr Lott's recommendations for the enhancement of the performance capacity of the three inter-related settlement ponds or dams, will significantly reduce the need for discharge of waste waters in their final state into the waters of Tenterfield Creek.

Indeed another recommendation of Dr Lott has led to the Defendant modifying its manufacturing or processing of materials so that greater reliance is made upon dry processing rather than wet processing. And it seems for example since January of this year, no wet processing has been undertaken at all, so that the third of the interconnected dams currently is virtually empty.

The Statement of Agreed Facts indicates that in relation to the second incident occurring on 22 February 1999, environmental harm was actually caused by the excessive amount of non-filtrable residues in the waste waters discharged at Tenterfield Creek, in that macro invertebrates living in the creek environment were damaged, and reduced in their presence. This is shown in the data collected in the Agreed Statement of Facts, par 52 to par 67. Sampling for macro invertebrates, both upstream and downstream the discharge point was undertaken on 22 February 1999. I interpose that no sampling in respect of the macro invertebrates was undertaken in respect of either the first or the third offence).

The results of the sampling are stated succinctly in par 57 of the Agreed Statement of Facts which indicates that in the upstream sampling location, some 33 families of individual macro invertebrates were discovered whereas downstream only 20 of those families were discovered, producing a reduction in the presence of macro-invertebrate families of some 40 per cent in the comparison between the upstream and downstream sampling sites.

I should complete the finding in relation to damage or loss to the macro invertebrate population resident in this part of Tenterfield Creek, by referring to the facts recorded in par 65, par 66 and par 67, of the Agreed Statement of Facts According to these, it is said that the adverse effects upon the macro invertebrate populations experienced and detected in the sampling that occurred on 22 February 1999 would not be completely abated until the suspended material and silt substrate were removed from that section of Tenterfield Creek.

The next fact to note is that it is agreed that a storm or flood event, increasing the flow of water in the creek, would be likely to clear both the suspended material and the silt substrate, and that in consequence, repopulation of the macro invertebrate community would occur relatively rapidly thereafter. The reason that I have referred to this aspect of the Statement of Agreed Facts, is that Dr Lott's evidence today, which is not incorporated in the Statement of Agreed Facts, indicates that there did occur soon after the sampling on 22 February 1999, significant increases in stream flow consequent upon storm or rainfall events, occurring soon after 22 February 1999, and more significantly, later in October 1999. The intensity of the increase in stream flow and storm event led to Dr Lott expressing the opinion that the suspended material and silt substrates would have been effectively removed.

Dr Lott was also engaged after the occurrence of the third offence because of the insistence by the Environmental Protection Authority that the Defendant comply with the licence requirements, not only in respect of the limitations on the discharge of waste waters (with the limitation of 150 millilitres per litre of non-filtrable residues therein) but also with the monitoring conditions of the licence.

Dr Lott has expressed his opinion that those monitoring conditions are not readily and meaningfully applicable, but has nonetheless given advice to the Defendant, as to how its obligation under the licence ought be discharged in terms of monitoring and reporting. It so happens that the awareness of the commission of these three separate offences, in January, February and June 1999, were witnessed by officers of the Environmental Protection Authority originally, that is, in January attending the premises because of difficulties experienced with the Defendant licensee's compliance with its monitoring and reporting requirements under the licence. Having gone to the premises for that purpose in January and observing the discharge with the results ultimately shown by the laboratory analysis of the samples taken, together with the observations to the naked eye of the Environment Protection Officers, their attendance at the premises on the two later occasions was for the purpose of following up the original observations and on each occasion as it happened, they witnessed a discharge of waste waters into the Tenterfield Creek.

These being the relevant facts, the question arises as to the objective seriousness of the offences, together with the question of the Defendant's moral or criminal culpability therein. A further question to arise is whether the offences should be regarded for sentencing purposes as involving as it were one offence, that is whether the principle of totality should apply.

The Court has often expressed a view of the objective seriousness of offences created by the Environmental Offences and Penalties Act, or the Clean Waters Act, and the like, observing that the legislature regards on behalf of the community, environmental offences as being serious by proscribing significant maximum penalties for breach. The Court has also expressed itself on the particular obligations that fall upon licensees who hold licences permitting some controlled or prescribed element of pollution. In the present case, as I have pointed out, the Defendant has at all material times held a licence, which does permit, subject to the significant restrictions that I have referred to, the discharge of waste waters into Tenterfield Creek. However the Defendant has not been charged with offences involving contravention of its licence, such as was the case recently considered by myself in Environment Protection Authority v Norco Co-operative Limited, [2000] NSWLEC 35. As it happens, those charges involved breach of licence conditions involving waste water discharges to a river, including conditions limiting the extent of biochemical oxygen demand, non-filtrable residues and other relevant conditions. In those cases, the Court has accepted as a general proposition that the discharge of waste waters containing high levels of non-filtrable residues is potentially the cause of environmental damage to aquatic systems and aquatic life. In the present case, the limitation on non-filtrable residues in waste waters permitted to be discharged permits a very low non-filtrable residue discharge. And in the present case, as I have already pointed out, at least in respect of the offence that occurred on 22 February 1999 which contained by far the highest levels of non-filtrable residues, it is agreed that environmental harm was sustained to the macro invertebrates living in the Tenterfield Creek in the environs of the discharge point.

Accordingly, considered objectively, the offences must be regarded as serious. The subjective moral or criminal culpability of the Defendant in the commission of the offences is also a matter of some seriousness. Defence Counsel candidly conceded that the offences occurred in each case, not as a result of accident or inevitable accident or human failure, but can only be regarded in terms of a relevant awareness by the Defendant, as being either negligent or recklessly indifferent to the consequences. This, to my mind, is to concede a serious element of moral culpability, for what is after all an offence of strict liability. Accordingly, putting those two findings together, I am satisfied that the offences committed in the present case are to be regarded as serious offences. In respect of each offence, the Defendant is to be regarded as seriously morally responsible.

The Defence submission has been that it would be appropriate in terms of sentence to regard all three offences are being connected or interconnected such as to justify the application of the totality principle. I accept in part this submission. In particular, I accept, because of the close proximity of timing between the first and second offences (namely a period of a month) that the principle has some application. I do not think however, that it is appropriate, in view of the lapse of more than four months between the second and third offence, to regard the principle as incorporating the last offence committed on 30 June. Obviously however, the offences occurred from the same premises by dint of the same processes being employed, and by virtue of the same deficiencies in the then operational waste water system.

In particular, I should note, and this goes to the question also of moral and criminal responsibility, that it was apparent to the Environment Protection Authority Officers attending the premises on each of the days upon which the three offences were committed, that the related three settling ponds or dams, were heavily silted, and it is significant that it was only after Dr Lott's services were engaged, post the date of the third offence that steps were taken to de-silt and to extend the physical capacity of the three related settling pond dams.

There are a number of mitigating factors that I think need to be taken into consideration in favour of the Defendant. (i.) there is the fact that it pleaded guilty at an early stage to all three charges; (ii.) it cooperated with the presentation of the case, particularly in terms of the Court having the benefit of a comprehensive Agreed Statement of Facts; (iii.) there is the fact that the Defendant has no prior convictions; (iv.) there is the fact that the Defendant and its principal are well known and upstanding citizens in the Tenterfield community, a fact recognised by the character evidence given today by Councillor Smith, a member of the Tenterfield Council who was authorised by the Council to attend the Court today to give good character evidence of the Defendant and its principal.

He has informed the Court of the many good works and public spiritedness of the Defendant and its principal in the local community. It is also said that the Defendant Company (though employing only some 24 personnel at the gravel processing plant, and six others at the source of obtaining the source material) is the largest private employer in Tenterfield.

All these facts are taken into account in mitigation, as are the facts concerning the Defendant's preparedness and willingness to improve its waste water management system, hopefully ultimately producing a result where there is no need to discharge any waste waters into Tenterfield Creek. I am here referring to the evidence given by Dr Lott and referred to in his report concerning the recycling and re-use of treated waste waters emanating from the plant.

Accordingly, I am satisfied that the Defendant is truly contrite, has seen the necessity to significantly upgrade the environmental performance of its plant, has engaged the services of appropriate experts and is committed to a program of environmental enhancement of its waste water system to the intent that it might safely be inferred that there will be no re-offending.

Viewing therefore the offences in the manner that I have indicated, that is, serious offences involving significant moral culpability, but linking the first two offences by the principle of totality, but separating out the third offence as not so affected by the principle, it is clear from the agreed facts and the evidence generally that the second offence is to be regarded as the most serious in terms of objective gravity. That is because the non-filtrable residues discharged on that occasion, were significantly higher than on the first and third occasions. Moreover, it is in respect of that discharge that the agreed facts record agreement as to actual environmental harm that was sustained to the macro invertebrate community in the creek, albeit a harm that was not permanent inasmuch as the community could be expected to be replenished with the beneficial effects of the increased stream flow in the creek following the significant rainfall events that occurred post the offences.

As I say, the offences individually and collectively in the way that I have linked the first and second offences, are to be regarded as serious, but there are the significant mitigating factors that I have already mentioned that operate in favour of the Defendant.

In view of the foregoing, the Defendant must be convicted and penalised in respect of each offence. In my view, the appropriate penalty to apply in respect of the first two offences is a total penalty of $30,000, reflecting $10,000 for the first offence and $20,000 for the second offence that is, the one objectively is to be regarded as the more serious.

In respect of the third offence occurring some four months after the second offence, I am of the opinion that the appropriate penalty, having regard again to the mitigating factors that operate in favour of the Defendant, require and justify a penalty of $20,000.

Accordingly, the total penalty to be imposed for all three offences is $50,000.

The Defendant has agreed to pay the Prosecutor's costs in the sum of $11,400, and I shall make an order in that behalf.

Accordingly, for all of the foregoing reasons, I make the following orders:

1. The Defendant is convicted of each offence as charged.
2. In respect of the first offence (that is proceedings in 50101/99) a penalty of $10,000 is imposed in respect of that conviction.
3. In respect of the second offence (that is the subject of proceedings 50102/99) a penalty of $20,000 is imposed in respect of that conviction.
4. In respect of the offence committed (that is the subject of proceedings 50103/99) a penalty of $20,000 is imposed in respect of that conviction.
5. The Defendant is ordered to pay the Prosecutor's costs in the agreed sum of $11,400.
6. The exhibits may be returned.

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33. The Defendant has agreed to pay the Prosecutor's costs in the sum of $11,400, and I shall make an order in that behalf.

34. Accordingly, for all of the foregoing reasons, I make the following orders:

1. The Defendant is convicted of each offence as charged.

2. In respect of the first offence (that is proceedings in 50101/99) a penalty of $10,000 is imposed in respect of that conviction.

3. In respect of the second offence (that is the subject of proceedings 50102/99) a penalty of $20,000 is imposed in respect of that conviction.

4. In respect of the offence committed (that is the subject of proceedings 50103/99) a penalty of $20,000 is imposed in respect of that conviction.

5. The Defendant is ordered to pay the Prosecutor's costs in the agreed sum of $11,400.