Environment Protection Authority v Davis

J Single (Prosecutor) R O'Gorman-Hughes (Defendant)

SOLICITORS: NSW Office of Water (Prosecutor) Pikes Lawyers (Defendant) File Number(s): 18/145865-69

Sentencing for five offences of special executive liability

1. The Defendant Mr Davis has pleaded guilty to five charges under s 66(2) of the Protection of the Environment Operations Act 1997 (POEO Act) arising from the provision of false or misleading information to the Environment Protection Authority (EPA). Pursuant to s 169(1) of the POEO Act, Mr Davis' liability for these charges arose from five s 66(2) charges of Wollondilly Abattoirs Pty Ltd (Wollondilly Abattoirs) arising from events in 2017. At the time of the offences Mr Davis was a person concerned in the management of Wollondilly Abattoirs as the general manager.
2. A plea of guilty is an admission of the elements of an offence. Any matter otherwise contested by a defendant on sentence must be established by the prosecutor beyond reasonable doubt: R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at 281. Any contested matter relied on by a defendant must be established on the balance of probabilities: R v Olbrich at 281.

Protection of the Environment Operations Act 1997

1. The statutory scheme under which an offence is committed is relevant to consider when sentencing. Relevant sections of the POEO Act provide: Chapter 1 Preliminary … 3 Objects of Act The objects of this Act are as follows: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, (b) to provide increased opportunities for public involvement and participation in environment protection, (c) to ensure that the community has access to relevant and meaningful information about pollution, (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, (iii) the reduction in the use of materials and the re-use, recovery or recycling of materials, (iv) the making of progressive environmental improvements, including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, (f) to improve the efficiency of administration of the environment protection legislation, (g) to assist in the achievement of the objectives of the Waste Avoidance and Resource Recovery Act 2001. … Chapter 3 Environment protection licences … Part 3.5 Particular licence conditions … 66 Conditions requiring monitoring, certification or provision of information, and related offences (1) Monitoring The conditions of a licence may require: (a) monitoring by the holder of the licence of the activity or work authorised, required or controlled by the licence, including with respect to: (i) the operation or maintenance of premises or plant, and (ii) discharges from premises, and (iii) relevant ambient conditions prevailing on or outside premises, and (iv) anything required by the conditions of the licence, and (b) the provision and maintenance of appropriate measuring and recording devices for the purposes of that monitoring, and (c) the analysis, reporting and retention of monitoring data. (2) False or misleading information A holder of a licence who supplies information, or on whose behalf information is supplied, to the appropriate regulatory authority under the conditions of the licence is guilty of an offence if the information is false or misleading in a material respect. Maximum penalty: (a) in the case of a corporation - $1,000,000, or (b) in the case of an individual - $250,000. ... Note. An offence against subsection (2) or (4) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation - see section 169. Chapter 5 Environment protection offences … Part 5.9 General offences … 169 Liability of directors etc for offences by corporation - offences attracting special executive liability (1) If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision, unless the person satisfies the court that: … (b) the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or (c) the person, if in such a position, used all due diligence to prevent the contravention by the corporation. (1A) For the purposes of this section, each of the following provisions attract special executive liability: ... (c) section 66 (2) or (4), ... (2) A person may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision. (3) Nothing in this section affects any liability imposed on a corporation for an offence committed by the corporation against this Act or the regulations. … Chapter 8 Criminal and other proceedings … Part 8.2 Proceedings for offences … Division 5 Sentencing 241 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. (2) The court may take into consideration other matters that it considers relevant. ...

Crimes (Sentencing Procedure) Act 1999

1. The Crimes (Sentencing Procedure) Act 1999 (CSP Act) is relevant to sentencing for all crime in NSW. Section 3A of the CSP Act provides: Part 1 Preliminary … 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community. …
2. Under s 21A(1), aggravating factors in subs (2) and mitigating factors in subs (3) and any other objective or subjective factors that affect the relative seriousness of the offence are to be taken into account. No aggravating factors under s 21A(2) of the CSP Act were identified by the EPA. Mitigating factors in subs (3) are considered below.

The offences

1. Mr Davis is charged with five offences against s 66(2) of the POEO Act by reason of s 169(1) of that Act, in that at the time of each offence he was a person concerned in the management of Wollondilly Abattoirs and Wollondilly Abattoirs committed the following offences: (a) an offence under section 66(2) of the POEO Act in that it was the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about May 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 10 January 2017 (the January 2017 quarterly report) pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145868); (b) an offence under section 66(2) of the POEO Act in that it was the holder of a licence who supplied information to the ARA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 11 May 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 20 April 2017 (the April 2017 quarterly report) pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145866); (c) an offence under section 66(2) of the POEO Act in that it was the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 20 July 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 20 July 2017 (the July 2017 quarterly report) pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145867); (d) an offence under section 66(2) of the POEO Act in that it was the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 24 October 2017, Wollondilly Abattoirs provided the EPA with a quarterly report which was required to be submitted by 20 October 2017 (the October 2017 quarterly report) pursuant to condition R4.1 of its licence and that report contained false or misleading information (2018/145865); and (e) an offence under section 66(2) of the POEO Act in that it was the holder of a licence who supplied information to the EPA under the conditions of the licence, being information that was false or misleading in a material respect. On or about 30 November 2017, Wollondilly Abattoirs provided the EPA with its Annual Return for the reporting period 1 October 2016 to 30 September 2017 (the Annual Return) which was required to be submitted by 29 November 2017 pursuant to condition R1.1 of its licence and the Annual Return contained false or misleading information (2018/145869).

Statement of agreed facts

1. The parties agreed the following statement of agreed facts (SOAF) filed on 15 January 2019 (exhibit A). The tabbed documents to the SOAF are not included: 2 Wollondilly Abattoirs Pty Limited ACN 067 281 645 (Wollondilly Abattoirs) holds environment protection licence number 422 (the EPL), issued under the POEO Act. 3 Wollondilly Abattoirs was required by the EPL to take an effluent quality sample from a particular effluent pond on its licensed premises once each quarter, have the samples analysed for particular pollutants in accordance with the Approved Methods for the Sampling and Analysis of Water Pollutants in New South Wales publication and provide the results of analysis to the EPA in a quarterly report and its annual return. 4 Wollondilly Abattoirs was required by the EPL to take three annual surface soil samples and three annual subsurface soil samples from the main effluent irrigation area on its Premises, have the samples analysed for particular pollutants in accordance with the EPL and provide the results of analysis to the EPA in a quarterly report and its annual return. 5 In 2017, Wollondilly Abattoirs (by its employee [the then office manager]) provided to the EPA four quarterly reports, each of which attached a false certificate of analysis containing false results of analysis for the samples, purported to have been created by "ALS Environmental", which is a trading name of Australian Laboratory Services Pty Ltd (ALS). The certificates were false in that they had not been created by or on behalf of ALS, rather they had been created by Wollondilly Abattoirs and did not contain genuine results of analysis. 6 On 30 November 2017, Wollondilly Abattoirs (by its employee [the then office manager]) submitted to the EPA an Annual Return that contained false monitoring data for the effluent samples, surface soil samples and subsurface soil samples; falsely stated that the number of effluent samples required to be tested for pH and Conductivity was 0; failed to report under "Details of Non-Compliance with Licence" any breaches of condition M2 of its environment protection licence; and contained an inaccuracy in relation to dates of non-compliances with the provision of quarterly reports. 7 As part of its investigation, the EPA issued Wollondilly Abattoirs with a notice under s 193 of the POEO Act, requiring it to provide information and records in relation to the suspected failure to monitor pollutants as required by the EPL and the suspected provision of false information in the quarterly reports. Wollondilly Abattoirs provided the EPA with a response to that notice which included false information, falsified invoices and falsified bank records. The false documents were created and supplied to the EPA in an attempt to cover up the fact that samples were not analysed as required by the EPL for four quarterly reporting periods, and to cover up the falsity of the purported ALS reports earlier provided. This supply of information to the EPA is not the subject of a charge against Mr Davis (but is against Wollondilly Abattoirs). Wollondilly Abattoirs and the Premises 8 Wollondilly Abattoirs Pty Limited ACN 067 281 645 (Wollondilly Abattoirs) holds environment protection licence number 422 (the EPL) for livestock processing activities carried out at 48 Koorana Rd Picton NSW (the Premises). A copy of the EPL as in force from 4 December 2015 to 15 March 2017 is at Tab 1 of the attached bundle. A copy of the EPL as in force from 16 March 2017 to 29 November 2017 is at Tab 2. 9 The EPA is the appropriate regulatory authority (ARA) for the activities carried out at the Premises. 10 Wollondilly Abattoirs has been registered since 1994 and the abattoir has been operating at the Premises for about 50 years. The EPL was in force when the POEO Act repealed the Pollution Control Act 1970 with effect from 1 July 1999. Prior to 1 July 1999, Wollondilly Abattoirs held a pollution control approval under the Pollution Control Act 1970. 11 The Premises occupies an area of approximately 18 hectares and is surrounded by rural land with some residential lots located to the north and north-west. The Premises is on sloping land that drains towards Myrtle Creek to the south. The south east corner of the Premises, that is adjacent to Myrtle Creek, is located less than 500 metres from the Nepean River. 12 A map showing the location of the various ponds, watercourses and effluent irrigation areas on the Premises is at Tab 3. 13 Located at Tab 4 are: (a) A Google Maps image showing the location of the Premises in relation to Myrtle Creek and the Nepean River; and (b) A zoomed in Google Maps image of the Premises. 14 The main activities undertaken at the Premises are the slaughter and processing of animals including sheep, cattle and pigs. These activities result in wastewater that is typically contaminated with blood, hair, fat, meat, manure, paunch materials and detergents (effluent). Effluent routinely has a high biochemical oxygen demand. It is also very saline and has high levels of nutrients, suspended solids and bacterial contamination. 15 Effluent at the Premises enters and is supposed to be treated by an effluent management system, composed of an anaerobic pond, aerobic pond and holding ponds, prior to being irrigated onto specified effluent irrigation areas of the Premises. 16 An ephemeral watercourse is located approximately 10 metres east of the final pump out pond at a lower elevation. The watercourse drains to Myrtle Creek, a tributary of the Nepean River in the Hawkesbury-Nepean catchment. Employees and directors 17 Wollondilly Abattoirs employee Gregory John Davis was the general manager of the abattoir and was employed there for a total of about 36 years (excluding a period between 2008 and 2014). He was the general manager from July 2014 until his employment was terminated in July 2018. His responsibilities included the general running of the abattoir, day to day operations, overseeing and running the whole plant, authorising payments from the company's bank accounts and overseeing all staff on the premises including the office staff, "virtually everything". He reported to the board of directors, primarily director Frederick Ziems, who is the chairman of the board. 18 At the time of the offences, Mr Davis was aware that Wollondilly Abattoirs held an environment protection licence, but was not aware of all of its conditions, despite being the employee responsible for ensuring compliance with it. 19 Wollondilly Abattoirs employee [the then office manager] has worked as the office manager at the abattoir since April 2013. [They] reported directly to Mr Davis from his return to work at Wollondilly Abattoirs in mid-2014 until his termination in mid-July 2018, but also reports to Frederick Ziems and the board of directors. [The then office manager] does most of the company's paperwork, including preparing paperwork that is submitted to the EPA. At the time of the offences, [the then office manager] had seen a copy of the EPL, but had not fully read it. Monitoring requirements of the EPL 20 Condition M2 of the EPL requires Wollondilly Abattoirs to "monitor (by sampling and obtaining results by analysis) the concentration of each pollutant specified" at the "Irrigation pump pipeline immediately below junction with recycled water supply line" (point 2). This is a point in the system prior to the effluent being irrigated onto the effluent irrigation areas. Wollondilly Abattoirs are required to take a representative sample from this point each quarter and have it tested for biochemical oxygen demand, conductivity, faecal conforms, nitrogen (ammonia), nitrogen (total), pH, phosphorus (total), reactive phosphorus and total suspended solids. 21 Condition M2 of the EPL also requires Wollondilly Abattoirs to take annual surface and subsurface soil samples as set out below, from the main effluent irrigation area labelled as "Irrigation Area" attached to Licence Information Form dated 26 August 1999 (at Tab 5) and test soil quality: (a) a composite soil sample (containing 20 subsamples) collected from surface soils (0-15 cm depth) from the Slope area in the effluent utilisation area; (b) a composite soil sample (containing 20 subsamples) collected from subsoils (45-75 cm depth) from the Slope area in the effluent utilisation area; (c) a composite soil sample (containing 20 subsamples) collected from surface soils (0-15 cm depth) from the Ridge area in the effluent utilisation area; (d) a composite soil sample (containing 20 subsamples) collected from subsoils (45-75 cm depth) from the Ridge area in the effluent utilisation area; (e) a composite soil sample (containing 20 subsamples) collected from surface soils (0-15 cm depth) from the Flat area in the effluent utilisation area; and (f) a composite soil sample (containing 20 subsamples) collected from subsoils (45-75 cm depth) from each of the Flat area in the effluent utilisation area. 22 Condition M2 of the EPL also requires Wollondilly Abattoirs: (a) to have the surface soil samples tested for twelve specified pollutants; and (b) to have the subsurface soil sample tested for five specified pollutants. 23 Condition M3.1 of the EPL requires monitoring for pollutants under the EPL to be done in accordance with the publication Approved Methods for the Sampling and Analysis of Water Pollutants in New South Wales. That publication provides that analyses should be undertaken by a laboratory accredited to perform those analyses by an independent accreditation body acceptable to the EPA, such as the National Association of Testing Authorities (NATA), or equivalent. 24 A photograph taken on 4 April 2018 showing the pump out pond and the pump that pumps effluent to the effluent irrigation areas is at Tab 6. The pump out pond is the final pond in the effluent management system. The pump out pond is a storage pond and does not treat the effluent but retains it prior to it being pumped to the irrigation areas. This is the pond from which Wollondilly Abattoirs is required by the EPL to take its quarterly effluent samples. Reporting requirements of the EPL 25 From 4 December 2015 to 16 March 2017, condition R4.1 of the EPL provided: R4.1 Quarterly report The licensee must provide the EPA with a quarterly report containing the following information: ... 2. Details of all monitoring results as prescribed by Condition M2.2, ... The report referred to in this condition must be received by the EPA by 10 January, 10 April, 10 July and 10 October each year, commencing 10 July 2013. 26 On 16 March 2017, the EPA varied condition R4.1 to change the due dates for quarterly reports to "20 January, 20 April, 20 July and 20 October". 27 Wollondilly Abattoirs' quarterly reports were therefore due to the EPA on 10 January 2017, 20 April 2017, 20 July 2017 and 20 October 2017. 28 Condition R1 of the EPL provides: R1 Annual return documents R1.1 The licensee must complete and supply to the EPA an Annual Return in the approved form comprising: a) a Statement of Compliance; and b) a Monitoring and Complaints Summary. At the end of each reporting period, the EPA will provide to the licensee a copy of the form that must be completed and returned to the EPA. R1.2 An Annual Return must be prepared in respect of each reporting period … … R1.5 The Annual Return for the reporting period must be supplied to the EPA by registered post not later than 60 days after the end of each reporting period ... 29 The "reporting period" is defined in the EPL and is from 1 October 2016 to 30 September 2017. 30 Wollondilly Abattoirs' Annual Return was therefore due to the EPA on 29 November 2017. Supply to the EPA of false information in Quarterly Reports (s 66(2) offences in Proceedings 2018/145865-145868 (Davis) 31 On 10 January 2017, the January 2017 quarterly report was due. 32 On 20 April 2017, the April 2017 quarterly report was due. 33 On 11 May 2017, EPA officers Mr Chris Kelly and Ms Amelia Sellars attended the premises to carry out a site inspection. [The then office manager] handed to Ms Sellars two quarterly reports (the January 2017 quarterly report and the April 2017 quarterly report) attaching reports bearing an "ALS Environmental" logo. 34 ALS is a laboratory accredited by the National Association of Testing Authorities (NATA). 35 The January 2017 quarterly report was submitted four months after the EPL required it to be submitted. A copy of the January 2017 quarterly report is at Tab 7. The attachment to the January 2017 quarterly report bearing an "ALS Environmental" logo was not prepared by ALS. It was falsified by Wollondilly Abattoirs. The data in the attachment to the report is not the results of analysis of samples taken on 11 January 2017. 36 The April 2017 quarterly report was submitted 21 days after the EPL required it to be submitted. A copy of the April 2017 quarterly report is at Tab 8. The attachment to the April 2017 quarterly report bearing an "ALS Environmental" logo was not prepared by ALS. It was falsified by Wollondilly Abattoirs. The data in the attachment to the report is not the results of analysis of samples taken on 24 March 2017. 37 On 20 July 2017, the July 2017 quarterly report was due. On 20 July 2017, [the then office manager] emailed July 2017 quarterly report to the EPA, copying in Mr Davis. A copy of that email and the attached July 2017 quarterly report is at Tab 9. The attachment to the July 2017 quarterly report bearing an "ALS Environmental" logo was not prepared by ALS. It was falsified by Wollondilly Abattoirs. The data in the attachment to the report is not the results of analysis of samples taken on 11 July 2017. 38 On 20 October 2017, the October 2017 quarterly report was due. 39 On 24 October 2017, [the then office manager] emailed the October 2017 quarterly report to the EPA, copying in Mr Davis. The October 2017 quarterly report was submitted four days after the date the EPL required it to be submitted. A copy of that email and the attached October 2017 quarterly report is at Tab 10. 40 The attachment to the October 2017 quarterly report bearing an "ALS Environmental" logo was not prepared by ALS. It was falsified by Wollondilly Abattoirs. The data in the attachment to the report is not the results of analysis of effluent or soil samples taken on 13 October 2017. Falsification of quarterly reports 41 On 28 October 2014, the EPA received by email from [the then office manager] a quarterly report which attached a Certificate of Analysis from ALS bearing work order number ES1440708 (the Genuine 2014 ALS Report). A copy of that email and attachment is at Tab 11. Both Mr Davis and [the then office manager] had received a copy of the Genuine 2014 ALS report from ALS. 42 On 3 November 2016, the EPA received by email from [the then office manager] a quarterly report which attached a document purporting to be a "Certificate of Analysis" from ALS, bearing work order number ES1440708. A copy of that email and attachment is at Tab 12. The attachment was not a genuine "Certificate of Analysis" from ALS. Rather, it was a version of the Genuine 2014 ALS Report that had been doctored. (This document is not the subject of a charge in these proceedings.) 43 The usual procedure was that Mr Davis would take the effluent sample and leave it on a desk or filing cabinet in the office. [The then office manager] would then call Toll Transport Pty Limited (Toll) to get them to courier it to ALS. ALS would then analyse the sample and email an invoice to Wollondilly Abattoirs, marked to Mr Davis' attention. 44 Mr Davis was ALS's contact person at Wollondilly Abattoirs. 45 The ALS laboratory at Smithfield was the only laboratory to carry out analysis of samples taken by Wollondilly Abattoirs on its premises over the period of the offences. In October 2014, ALS had charged Wollondilly Abattoirs $2561.90 to carry out analysis of two effluent samples and five soil samples. As an indication of how much ALS would have charged Wollondilly Abattoirs to carry out analysis of the effluent samples that were not done, ALS charged Wollondilly Abattoirs $225.50 on 10 January 2018 to carry out testing of an effluent sample for the parameters required to be monitored under the EPL. 46 Toll was the only company Wollondilly Abattoirs had used to courier samples from the Premises to the ALS laboratory at Smithfield for testing. Toll did not transport any samples from the Premises to ALS between 1 August 2016 and 26 October 2017 and ALS did not carry out any work for Wollondilly Abattoirs over that period. Toll charged between $100 and $110 for transporting a sample from the Premises to the ALS labs. 47 Requests for payment from ALS to Wollondilly Abattoirs were sent to Mr Davis. 48 Although director Frederick Ziems' name is on the quarterly reports, he did not see a copy of the reports before they were submitted. 49 None of the Wollondilly Abattoirs directors review the quarterly reports prior to their submission to the EPA. 50 At the time of the offences, Frederick Ziems, as chairman of the board of directors of Wollondilly Abattoirs did not take any steps to ensure that the information provided to the EPA was true and accurate, apart from making occasional general enquiries of Mr Davis and [the then office manager] as to how everything was going with the EPA. Submission of false and misleading information to the EPA in Annual Return (s 66(2) offence in Proceedings 2018/145869) 51 On 30 November 2017, Wollondilly Abattoirs provided the EPA with its Annual Return, pursuant to condition R1.1 of the EPL. The Annual Return was submitted one day late. A copy of the Annual Return is at Tab 13. 52 Section B2 of the Annual Return contains tables in which Wollondilly Abattoirs was required to provide certain information about the effluent samples that were required to be taken once each quarter and surface and subsurface soil samples that were required to be taken once in the reporting period at the premises. 53 The following information in Section B2 of the Annual Return, relating to effluent quality at "Monitoring Point 2", is false: (a) Number of samples collected and analysed; (b) Lowest sample value; (c) Mean of sample; (d) Highest sample value; and (e) Number of samples required for conductivity and pH (the table should state that the number of samples required to be tested for pH and Conductivity is 4, however it incorrectly states that 0 samples were required to be tested for pH and conductivity). 54 The following information in Section B2 of the Annual Return, relating to surface soil quality at "Monitoring Point 3", is false: (a) Number of samples collected and analysed; (b) Lowest sample value; (c) Mean of sample; and (d) Highest sample value. 55 The following information in Section B2 of the Annual Return, relating to subsurface soil quality at "Monitoring Point 4", is false: (a) Number of samples collected and analysed; (b) Lowest sample value; (c) Mean of sample; and (d) Highest sample value. 56 In the table in the Annual Return for Monitoring Point 3 (surface soil quality) and the table for Monitoring Point 4 (sub-surface soil quality), some of the values are identical to values in the false October 2017 quarterly report. 57 [The then office manager] entered the false data in the Section B2 of the Annual Return based on figures in the fraudulent ALS reports. [They] knew that the Annual Return contained false information at the time [they] prepared it. 58 In Section C2 of the Annual Return which is titled "Details of Non-Compliance with Licence", Wollondilly Abattoirs have reported a non-compliance for late submission of three quarterly reports (which is a breach of condition R4.1), however they should also have reported the failure to monitor under condition M2. Further, Wollondilly Abattoirs have reported under Section C2 that the non-compliances occurred in January, April and July 2017, however the non-compliances occurred in January, April and October 2017. 59 Mr Davis authorised [the then office manager] to use an account in his name to complete the Annual Return online. [The then office manager] entered the information in the Annual Return. [The then office manager] then printed it out. 60 On 29 November 2017, two of the employees of Wollondilly Abattoirs delivered the Annual Return to two of the directors, Daniel Ziems and Matthew Ziems, to sign in a carpark at the bottom of Mount Ousley. It was given to these particular directors to sign because they were available to sign it at short notice. 61 Daniel Ziems and Matthew Ziems signed the Annual Return to declare and certify that the information in it was not false or misleading in a material respect. 62 On 30 November 2017, [the then office manager] lodged the signed Annual Return online. 63 In his interview with the EPA, Daniel Ziems admitted he did not read the Annual Return before signing it and said it was "a bit of a rushed thing that I - the boys came down and - well I had to sign it when they come home from work otherwise - we were on the time limit or something like that" and "They just said that we had to sign it and then we just signed it." 64 In his interview with the EPA, Matthew Ziems said "... we just signed because we were pretty busy at the time and we just left the shop to go and do it ... it had to be done in a rush because ... it was due". When asked if he had reviewed the Annual Return before signing it, Matthew Ziems said "... Not really no ... I just thought it was part and parcel of what we had to do". He said "I didn't really read it, or understand it, I was busy ... I thought I'd just sign it so that they could get it off to you because I was under the belief that everything was okay and had to get that done so they didn't get into trouble...". 65 At the time of the offence, the directors of Wollondilly Abattoirs did not take any steps to ensure that the information in the Annual Return was true and accurate and left these matters to Mr Davis and [the then office manager]. ... 70 On 14 December 2017, Mr Davis participated in a voluntary interview under caution with the EPA about the suspected failure of Wollondilly Abattoirs to take samples and the provision of the false ALS reports. EPA officers put to him the allegation that the ALS reports submitted with the October 2016, January 2017, April 2017, July 2017 and October 2017 quarterly reports were falsified. Mr Davis denied the false ALS reports were false, denied any wrongdoing by Wollondilly Abattoirs and repeatedly insisted he had taken the required samples and that they had been submitted to ALS for analysis. He suggested there must have been typos by ALS or confusion with forms sent to ALS. Mr Davis stated that he had taken all the effluent samples and Wollondilly Abattoirs had paid ALS for the analysis, so the abattoir would have received a tax invoice from ALS for carrying out the analysis and a bank statement showing that the company had paid ALS. He also indicated that Wollondilly Abattoirs would have records to prove it had paid Toll to courier the samples to ALS. The EPA reminded Mr Davis that the EPA had not received any records relating to the sampling from Wollondilly Abattoirs in response to the notice and that if there were any further relevant records that had not been provided they should be provided to the EPA. Mr Davis said Wollondilly Abattoirs would produce to the EPA records, including bank records, to prove that it had paid ALS and Toll for the work. 71 The interview between EPA officers and Mr Davis included the following exchanges (["they"] being references to [the then office manager]): DAVIS A441: Hundred percent I know I did those samples, I'll bet on my children's life, mate, I'm telling you, that's how confident I am, I know I did them. … DAVIS A504: ... So whether this is, it's the old form and they don't change the dates or what I don't know, definitely, like I said, I know 100% I got those samples. A hundred percent. Q 505. You're confident that you got a tax invoice - - - DAVIS A Yeah, we'd have a tax invoice from them. Q 506. - - - in relation to the - - - DAVIS A Yeah. Q 507. - - - samples that that you collected in October 2016 - - - DAVIS A Yeah, even the bank records, bank statement to show you where we paid them, where it's come out of our bank, a hundred percent. … Q 547. Did you pay for the sampling? DAVIS A Yep, a hundred percent. Q 549. And you have invoices to - - - DAVIS A I have invoices to - - - Q 550. - - - to demonstrate that? DAVIS A Yep ... Q 551. So would you have Toll records to accompany - - - A Yeah, we'd have Toll, we should have the Toll records in the drawer and we'd have where we paid ALS to do the sample. … DAVIS A573 ... I was a hundred percent confident that everything was above board honestly, so I know I done the sampling and I know the samples were sent, so whether that's like I said a typo or a, not a typo, but [they've] picked on the wrong one when [they've] done the - because [they] [keep] all of them on [their] computer, [they've] got all these on [their] computer, on [their] email. We don't disregard them, they're all on [their] email. So we'd have to go back and check why they're the same. We definitely don't doctor anything up, put it that way. … DAVIS A575 So simple to go get a sample, you know what I mean, it takes half an hour max to go do the whole soils and everything samples, that's it. And - - - Q 576. How much does it usually cost? DAVIS A It's a few hundred dollars, 400 or something like that, yeah. Q 577. Just for the water or is it water and soil? DAVIS A No, I think it's about maybe 600 and something with the soil, 500 something with the soil, yeah. So we know we do it but that's - that's not the issue, I know we do do it, guaranteed, I guarantee it. … Q 582. So when you say you know the samples have been taken - - - DAVIS A Yep. Q 583. - - - how do you know? DAVIS A Because I - - - Q 584. What's that based on? DAVIS A - - - I get an email from them saying they want payment before they release the results. Q 585. ... for the samples provided for the quarterly report due on 10 October 2016 - - - DAVIS A Mm-hmm. Q 586. - - - you were provided an invoice by ALS for the analysis of those samples - - - DAVIS A Yep. Q 587. - - - and you have that record. DAVIS A We'd have that on record. Q 588. Do you have the corresponding courier dockets from Toll? DAVIS A [They'd] have that too, [they] keeps all the Toll documents too, yes. … Q 639. Yep, okay so you're adamant that Wollondilly Abattoirs - - - DAVIS A Has done nothing wrong, hundred percent, as I said to you before - - - Q 640. - - - have not modified the documentation? DAVIS A No, not at all. … Q 644. Have you sighted tax invoices in relation to samples that you collected - - - DAVIS A Only the ones off ALS that I forwarded on to [the then office manager]. … Q 646. For this, you know, in relation to GD-2 [October 2016 quarterly report], the samples which you claim you collected in October 2016 - - - DAVIS A Mm-hmm. Q 647. - - - did you see a tax invoice associated with it? DAVIS A I would have a tax invoice, yes. Q 648. You do have a tax - - - DAVIS A I could find the tax - I'd be able to find the tax invoice for it. As I've said you can see where it's come out of our bank account on those days at that time, it'd be in there, a hundred percent. … Q 660. We also have information from ALS that indicates that they have not been commissioned to undertake any samples for Wollondilly Abattoirs since July 2016. DAVIS A Well, that's wrong. That's a hundred percent wrong. Q 661. So their records show that they have not undertaken any analysis for Wollondilly Abattoirs since July 2016 - - - DAVIS A Well, that's a hundred percent wrong. Q 662. On what basis are you making that statement? DAVIS A Well, I know we give them- every quarter we send them their - their stuff, every quarter, every quarter we do that. Q 663. But ALS have told us that they have not done any work or have not been commissioned - - - DAVIS A Since July 2016. Q 664. - - - since July 2016 which is prior to - - - DAVIS A As I said, I'll give you the proof - - - Q 665. - - - the report provided in - - - DAVIS A Yeah righto, I'll get the proof. … Q 674. - - - because, yes, according to ALS they have not undertaken the sampling that has been provided in the quarterly report which was submitted to the EPA for 10 October 2016. DAVIS A Well, that's wrong, as I said, I can show it on the bank account and I'll show you on their receipts where we paid it. Q 689. How would you, how do you know that the samples have been received by ALS? DAVIS A Only when I get their invoice, that's the only time that we know that they've got the samples and would send them back and we'd send you the report. We don't send you - we don't send you something that we're make it up, you know what I mean, we send back the report that they send us. You get the same reports that we get, exactly the same report. So I'll find - I'll chase that up. July 2016. No, hundred percent. Like I said, I know I done all them - them samples right through. I said I might've been late on a couple, yes, but I definitely did them. A hundred percent. ... Prior history 76 The EPA has issued Wollondilly Abattoirs with 11 penalty notices and five official cautions or warnings since 2002. Regulatory action taken by the EPA against Wollondilly Abattoirs includes the following: Date Regulatory action by EPA against Wollondilly Abattoirs Details 9 May 2002 Penalty notice Water pollution in breach of s 120 POEO Act (organic waste stored in area that drains to waters). Penalty notice sent under cover of a letter to Frederick Ziems. 9 May 2002 Penalty notice Failure to maintain control equipment (transfer pipe) in breach of s 167 POEO Act. Cover letter with penalty notice was addressed to Frederick Ziems. 11 February 2004 Penalty notice Licence contravention in breach of s 64 POEO Act - failure to comply with Condition M2 (exceed pollutant concentration limits in effluent). Cover letter with penalty notice was addressed to Mr Davis. Water pollution in breach of s 120 POEO 25 September 2008 Penalty notice Act (runoff of wastewater from irrigation area to watercourse). 10 July 2009 Penalty notice Licence contravention in breach of s 64 POEO Act - failure to comply with Condition R1.5 (failing to submit annual return). 21 April 2011 Penalty notice Licence contravention in breach of s 64 POEO Act - failure to maintain plant and equipment in breach of Condition 02.1 (solids separator treating wastewater). 30 March 2012 Penalty notice Licence contravention in breach of s 64 POEO Act - failure to comply with Condition R1.5 (failing to submit Annual Return). 22 August 2012 Formal warning Licence contravention in breach of s 64 POEO Act - failure to comply with Condition M2.2 (only three out of four required effluent samples taken). 8 October 2012 Penalty notice Licence contravention in breach of s 64 POEO Act - failure to maintain plant and equipment in breach of Condition 02.1 (irrigator). 8 October 2012 Penalty notice Licence contravention in breach of s 64 POEO Act - failure to comply with Condition 03.6 (blood and paunch materials in wastewater treatment and disposal system). 7 May 2013 Official warning Licence contravention in breach of s 64 POEO Act - failure to comply with Condition M2.2 (failure to carry out water and soil sampling) in 2012-13. 4 June 2014 Penalty notice Licence contravention in breach of s 64 POEO Act - failure to comply with Condition L2.1 (exceedance of daily effluent limits to be irrigated) in 2012-13. Penalty notice marked to the attention of Frederick Ziems. 4 June 2014 Penalty notice Section 153A POEO Act - failure to prepare a pollution incident response management plan in compliance with Part 5.7 of the POEO Act. Penalty notice marked to the attention of Frederick Ziems. 8 August 2014 Clean up notice Clean up notice issued to Wollondilly Abattoirs requiring removal of asbestos waste used to construct embankment walls of a large drying bed and leachate collection dams on the Premises. Clean up notice was emailed to Mr Davis, [the then office manager], Mr Crowe and the general email address for Wollondilly Abattoirs. The clean up notice was marked to the attention of Frederick Ziems. Documentation to comply with the notice of clean-up action in full was not provided to the EPA as required. 17 April 2015 Letter EPA wrote letter to Wollondilly Abattoirs, marked attention to Mr Davis and Frederick Ziems, in relation to risk based licensing. Letter noted that in the two past quarters, Wollondilly Abattoirs had failed to comply with condition M2.2 in relation to monitoring of effluent quality and reminded it that "monitoring is to be undertaken in accordance with licence requirements at all times ...". 22 April 2016 Clean up notice Clean up notice issued in relation to sludge from the pump out pond being stockpiled on the premises adjacent to an unnamed drainage line that drains to Myrtle Creek. The clean up notice was emailed to Mr Davis, [the then office manager], Mr Crowe and a general email address for Wollondilly Abattoirs. Wollondilly Abattoirs failed to fully comply with the notice of clean-up action and it supplied information to the EPA under the notice of clean-up action that was false or misleading in a material respect. 15 July 2016 Show cause letter The EPA wrote letter to Wollondilly Abattoirs inviting it to show cause in relation to why EPA should not take regulatory action for alleged breaches its EPL in relation to failure to monitor effluent pH and conductivity in two quarterly periods and late submission of two quarterly reports. The letter was emailed to Mr Davis and [the then office manager]. 10 August 2016 Official caution Sections 64 and 66(2) POEO Act - failure to comply with Condition M2.2 (effluent monitoring) and Condition R4.1 (late/incomplete quarterly reports); supplying and certifying information to the EPA in an annual return that is false or misleading in a material respect. Official caution was marked to Frederick Ziems' attention. 14 March 2017 Official caution Licence contravention in breach of s 64 POEO Act - failure to comply with Condition 03.9 (stockpiling sludge from effluent ponds on the Premises). Official caution marked to the attention of Frederick Ziems, Mr Davis and [the then office manager]. 7 April 2017 Official caution Section 66(2) and (4) POEO Act - supplying and certifying information to the EPA under the conditions of the EPL that is false or misleading in a material respect (failing to report non-compliances with the EPL in relation to the Annual Return for the reporting period 1 October 2015 to 30 September 2016). Official caution was marked to the attention of directors Mr Smith and Mr Hitchings (who had signed the Annual Return for 2015-16), Mr Davis and [the then office manager].

77 Mr Davis has no prior convictions. He has entered pleas of guilty to all charges against him at the earliest opportunity, after making representations on a without prejudice basis to the EPA since the charges were laid against him. He is 58 years old and as at the date of this document being finalised has not been able to find reasonable alternative employment since he was dismissed by Wollondilly Abattoirs on 23 July 2018. The directors of Wollondilly Abattoirs 78 At the time of the offences, Wollondilly Abattoirs had seven directors, including Frederick Ziems (who has been associated with the abattoir for around 50 years) and his sons Daniel Ziems and Matthew Ziems. Frederick Ziems was and is the chairman of the board of directors of Wollondilly Abattoirs. 79 The board of directors aims to hold meetings on an approximately monthly basis, though in practice the timing of the meetings is irregular. Both Mr Davis and [the then office manager] usually attended the meetings of the board of directors. EPA officers have attended meetings of the board of directors on occasion. Frederick Ziems had not seen any correspondence from the EPA tabled at the meetings of the board of directors for probably two years. 80 When interviewed by the EPA in February 2018, Frederick Ziems had never fully read a copy of the EPL, but had looked at parts of it in about 2012 or 2013. He was not aware of the requirements of the EPL in any detail. When asked in his interview with the EPA "... do you understand what is required of that licence for Wollondilly Abattoirs?", he replied "the main thing is that we don't overflow into the Nepean River, is the first main thing. Second one is that we provide you with the samples that we're supposed to. That's mainly what - the three things that I know I've got to follow up, urgent - well, basically". He "took it for granted" that Mr Davis and [the then office manager] understood what had to be done in relation to the EPL. He had never read any of the quarterly reports provided by Wollondilly Abattoirs to the EPA, despite signing and certifying annual returns on occasion. 81 When interviewed by the EPA in January 2018, Daniel Ziems said he may have read parts of the EPL in around 2012 or 2013, but had not read the EPL since then. At the time of the offences, Daniel Ziems was generally aware of some of the requirements of the EPL. 82 When interviewed by the EPA in February 2018, Matthew Ziems said he was aware that Wollondilly Abattoirs held a licence but had not ever read or seen it. 83 The only step taken by any directors to ensure compliance with the EPL or the POEO Act was, from time to time, Mr Frederick Ziems asking Mr Davis or [the then office manager] how things were going or how they were getting on with the EPA. The response generally received was that everything was alright. The directors had not engaged any external consultants to audit the abattoir's environmental performance or sought any external expert assistance to monitor or assist with compliance. Harm resulting from the offences 84 Wollondilly Abattoirs did not provide the EPA with any genuine results of analysis of effluent samples taken on the premises between 6 July 2016 and 21 December 2017. As a result, the EPA does not know the levels of pollutants in the effluent applied to land at the Premises over that period. 85 There is potential for environmental harm resulting from the application of effluent to land where the nature of the effluent is not appropriately monitored or reported. There are significant constraints on the Premises for effluent management, including inadequate wet weather storage and inadequate land area available for irrigation. The effluent irrigation area cannot sustain the levels of nutrients (measured as nitrogen and phosphorus) in the effluent. 86 Given the significant constraints for effluent management at the Premises, in 2013 the EPA imposed a pollution reduction program (PRP) under Condition U1.1 of the EPL, requiring Wollondilly Abattoirs to move towards connecting the abattoir to Sydney Water's sewage treatment system. The dates for compliance with this PRP have been extended numerous times. 87 Accurate and timely data on the levels of pollutants in the effluent is vital to enable connection to Sydney Water's sewage treatment system by the due date of 31 December 2018. If the effluent does not meet Sydney Water's acceptance standards for the concentration of pollutants in effluent discharged to sewer, further on-site treatment of effluent may need to be arranged before the effluent is discharged to sewer.

Additional evidence relied on by the EPA

1. In addition to the SOAF, the EPA tendered pars 1 and 6 of the affidavit of Mr Ziems chairman and director of Wollondilly Abattoirs dated 1 March 2019 and annexure A to the affidavit (exhibit B), and parts of the affidavit of the then office manager dated 7 August 2018 (exhibit C).

Affidavit of the then office manager

1. When the then office manager started at Wollondilly Abattoirs in April 2013 the then office manager's roles and responsibilities included payroll, reporting and accounts. Since about 2014 they did most of the company's paperwork and other ad hoc tasks. The then office manager reported directly to Mr Davis from the time when he returned to work at Wollondilly Abattoirs in mid-2014. No staff member reported to the then office manager. Prior to mid-2014 they reported to Mr Ziems and the board of directors.
2. The then office manager and Mr Davis regularly attended board meetings. Mr Davis usually spoke to one of the directors of the company about three times a week in relation to various issues. Mr Davis was responsible for overseeing all staff at Wollondilly Abattoirs including office staff until he left in July 2018. The then office manager saw Mr Davis every day of the week. On average the then office manager saw him working in the office for about 12-15 hours per week.
3. The then office manager never took any water or soil samples at the premises at 48 Koorana Road Picton. In the corner of the office a whiteboard indicated what dates the EPA samples were due. Usually Mr Davis would take the water and soil samples. When Mr Davis could not take the samples he would ask Mr Bell to help. The then office manager was never specifically handed samples when they worked at the company. Sometimes the samples were left on a desk or filing cabinet in the office. The sample containers never had labels on them when they were left there.
4. Once the then office manager had the samples, they would call Toll Transport Pty Ltd (Toll) to courier the sample to Australian Laboratory Services Pty Ltd (ALS) labs for analysis. ALS would then analyse the samples and email an invoice to Mr Davis. Mr Davis would either forward the invoice to the then office manager for processing or print the invoice and give it to her. The invoices were never sent directly to the then office manager. In relation to payments to ALS, the then office manager entered the payments into the MYOB system and the money was not actually paid until Mr Davis authorised the payment. Once the invoice had been paid, ALS would email a report containing the results of analysis to Mr Davis' email address. The then office manager usually did not check Mr Davis' emails. There was one time an ALS report was sent to a general "wollabs" email address which went to Ms Wardman's (a bookkeeper employed by the company) computer. Ms Wardman would forward any emails to that address to the then office manager or Mr Davis.

Affidavit of Mr Ziems

1. Mr Davis recommenced employment with the company in or around July 2014 as general manager. A copy of Mr Davis' employment agreement with Wollondilly Abattoirs dated 2014 was annexed to Mr Ziems' affidavit. Schedule 1 to the employment agreement states that the position of general manager is responsible for the operations, processes and staff of the company. Key responsibilities and duties include direct responsibility for maintaining operational requirements and standards of regulatory authorities including the EPA. The "outcome" of this responsibility is satisfactory inspection and/or audit results by regulatory authorities.

Mr Davis' evidence

1. Mr Davis' counsel tendered a photograph of a document showing a tracking number from Australia Post (exhibit 1), text message correspondence between Mr Davis and Ms Byrne EPA officer dated 3 January 2018 including a message attaching exhibit 1 (exhibit 2) and nine character references for Mr Davis (exhibit 3).
2. The majority of the referees stated that they were aware that Mr Davis had been charged with offences whilst employed at Wollondilly Abattoirs or generally that he was appearing before the Court. Mr Davis is described as dependable, compassionate, humble, respectful, honest, courteous and hardworking. He is family orientated and does not hesitate to go out of his way to help his family or friends in need. Mr Davis has also been involved in the community as an enthusiastic sportsman playing a variety of sports throughout the years. He is always willing to volunteer his free time to local activities.
3. Mr Davis would regularly work extended hours at Wollondilly Abattoirs, often assisting the workers on the floor as well as completing his managerial duties. He would take work calls on holidays from customers with orders and staff needing advice, never complaining as he wanted to make sure all customer and staff needs were met. Mr Davis would often make deliveries for customers outside of his work hours. Throughout his employment at Beaurepaires between 2008-14 he was extremely professional and provided outstanding customer service. He quickly progressed to store manager running the business with complete competency.
4. The references describe how Mr Davis and his family have suffered throughout the process of being charged with offences. He has been terminated from his employment which has caused financial pressure on his family and personal stress due to the impending charges.

Objective circumstances

1. The objective seriousness of an offence is determined by considering the following factors: the nature of the offence; the maximum penalty for the offence; the environmental harm caused by the offence; the defendant's state of mind, the defendant's reasons for committing the offence; the foreseeability of the risk of harm to the environment; the practical measures available to the defendant to avoid harm to the environment; and the defendant's control over the causes of the harm (Chief Executive of the Office of Environment and Heritage v Turnbull [2017] NSWLEC 141 at [16]).

Nature of the offences

1. Environment protection licences are the primary means of regulation under the POEO Act. A strong regulatory framework is the key mechanism by which objectives (a), (d), (e) and (f) in s 3 are achieved. The EPA relies on information provided by the licence holders in quarterly reports and annual returns to effectively regulate licensees and prevent harm to the environment. Annual returns also provide an additional purpose whereby breaches of the licence can be disclosed. The EPA does not have the resources to independently monitor every licence issued under the POEO Act. It relies on information provided under compulsion by law by each licence holder and on the accuracy of that information. The supply of false or misleading information undermines the regulatory objectives of the POEO Act: Environment Protection Authority v Complete Asbestos Removal Pty Ltd; Environment Protection Authority v Endacott (2016) 221 LGERA 24; [2016] NSWLEC 167 at [61].

Defendant's state of mind in committing the offences

1. The EPA submitted that Mr Davis as general manager of Wollondilly Abattoirs was responsible for authorising payments from the company's bank accounts and overseeing all staff on the premises. His responsibilities and duties included ensuring the documents submitted to the EPA were correct. Even if he did not know reports were being falsified, gross recklessness was established in that Mr Davis must have known that no payments were being made to Toll or ALS as he was one of two people authorised to make bill payments. He was reckless in not reviewing the accounts of the company to ensure regular payments were being made. Mr Davis must have known that he received no emails from Toll or ALS during the period or at the very least he was reckless in giving other staff access to his emails without supervision.
2. According to par 41 of the SOAF, tab 11 of the attachments to the SOAF contains the October 2014 quarterly report which is genuine and contains an ALS certificate of analysis (consisting of general comments and complete analytical results). The EPA compared documents (tabs 7-10 of the attachments to the SOAF) the subject of the charges with tab 11 and submitted that Mr Davis should have noticed that the October 2016 report (not the subject of these charges) was doctored (see par 42 of the SOAF and tab 12 of the attachments to the SOAF). The year in the "Client sampling date/time" boxes was obviously whited out. The four quarterly reports the subject of the charges only attached "Page: 3 of 3" of the ALS results (or in the case of October 2017 report, pp 3 and 4 out of 5) and therefore were not complete reports. It would not have taken much for a member of the board or Mr Davis to see that they were not true. If Mr Davis had been duly diligent he would have had regard to the lack of invoices from Toll and ALS during the charge period. The penalty notices received by the company during the time that Mr Davis was employed means he was aware of the importance of providing information to the EPA.
3. There is no evidence of who created all the false documents the subject of the charges. The then office manager has admitted that they created the false January and April 2017 quarterly reports and the 2017 annual return. If the other reports were also prepared by the then office manager the failure to supervise them was negligent. The conduct took place over a year and was not a one-off mistake. If Mr Davis was too busy to properly supervise staff he should have told the directors. He disregarded the regulatory obligations, failed to check what was sent to ALS and the EPA, and failed to review results.

Consideration

1. Considering Mr Davis' state of mind in the highly unusual circumstances of these offences, at issue is whether Mr Davis' behaviour can be characterised as reckless or negligent in the criminal sense.
2. Considering recklessness, in Plath v Vaccount Pty Ltd t/as Tableland Timbers [2011] NSWLEC 202 Pepper J considered the meaning of the term at [98]: The term recklessness describes the state of mind of an offender who, while performing or failing to perform an act, is aware of the risk that a particular consequence is likely, in the sense of probable or possible, to result from that act or omission (Pemble v R (1971) 124 CLR 107, La Fontaine v R (1976) 136 CLR 62 and R v Crabbe (1985) 156 CLR 464). Recently in Blackwell v R [2011] NSWCCA 93, the Court of Criminal Appeal described the mental element of "reckless" as (at [76]): The effect of this line of authority is that where the mental element of an offence is recklessness, the Crown must establish foresight of the possibility of the relevant consequence.
3. Pepper J stated in Director-General, Department of Environment and Climate Change v Hudson (No 2) [2015] NSWLEC 110 at [136] that: … an offender's conduct will be classified as reckless if he or she is put on notice, in the sense that he or she believes or suspects, that an act or omission may be unlawful but nevertheless proceeds to engage in it without making further enquiries (Chief Executive, Office of Environment and Heritage v Rummery [2012] NSWLEC 271; (2012) 192 LGERA 314 at [126] and Chief Executive of the Office of Environment and Heritage, Dept of Premier and Cabinet v Turnbull [2014] NSLEC [sic] 150 at [141]).
4. The EPL required the provision of four water (effluent) samples and three annual soil and subsurface soil samples for testing by ALS (pars 3-4 of the SOAF). The reporting of test results to the EPA in quarterly reports and an annual return was required. The quarterly report for October 2016 (not the subject of a charge) attached a false certificate of analysis. The January, April, July and October 2017 quarterly reports attached extracts from false certificates of analysis. The then office manager submitted the false January and April quarterly reports to EPA officers during a site inspection (par 33 of the SOAF). The false July and October quarterly reports and annual return were submitted by the then office manager to the EPA by email or otherwise by lodgement online (pars 37, 39 and 62 of the SOAF). The then office manager has admitted to preparing the two false quarterly reports for January and April 2017 (see the then office manager's affidavit above at [16] and cross-examination of the then office manager at [22], [25]-[27]). The evidence does not disclose who prepared the false July and October 2017 quarterly reports.

(i) False reports

1. As already noted above, Mr Davis had poor computer skills and did not prepare any of the quarterly reports or the annual return the subject of the charges. He did not inspect them before they were sent to the EPA. The October 2016 quarterly report (not the subject of a charge) was clearly "doctored" when looked at as there is obvious whiting out of dates. The discrepancies identified by the EPA summarised above in [38] in the reports the subject of charges would also be apparent on a careful reading. According to par 59 of the SOAF, Mr Davis authorised the then office manager to use an account in his name to complete the annual return and the then office manager confirmed that in their affidavit at [17] above.

(ii) Invoices

1. The then office manager was responsible for entering the accounts at the company. Their evidence at [28] above was that generally invoices were emailed to Mr Davis although not exclusively. Large numbers of accounts to be paid were batched together for Mr Davis' approval. There were too many accounts to approve individually. Invoices were sent by ALS to Mr Davis' email although not on all occasions. Occasionally they were sent to the "wollabs" email address which was used by another employee (see the then office manager's affidavit at [13]). The cost of ALS analysing samples varied depending on whether water samples or soil and water samples were required (par 45 of the SOAF). The figures are not large and I infer would not necessarily have stood out from other accounts in Mr Davis' mind.

(iii) ALS results

1. While Mr Davis' counsel emphasised that on one occasion the ALS results went to an email account other than Mr Davis' email (see the then office manager's affidavit at [13] above), as explored in cross-examination of the then office manager (see [26] above), the inference from their evidence is that the ALS results were generally sent to Mr Davis' email account. Once again the complete absence of any system to detect that no results were being received by anyone in the office is highlighted by the fact that Mr Davis did not notice that no results were received for a year or more.
2. The absence of invoices and therefore ALS results for over 12 months should have alerted Mr Davis to problems with preparing the quarterly reports. Given that Mr Davis was adamant that he collected the required samples I infer that he assumed that all the other steps in the process were being taken by the then office manager. Mr Davis' failure to notice that no ALS or Toll invoices were received for over a year is certainly a major one on his part in the absence of any other system to detect their absence. If no accounts from ALS were received and paid, obviously no results which could be included in a quarterly report were being provided. Presumably, if Mr Davis had noticed that no invoices from Toll and ALS were arriving and also that no results were being received from ALS he may have wondered what was being included in the quarterly reports submitted. Unfortunately the alarm bells did not ring.
3. Mr Davis' counsel submitted that the then office manager's credibility was further eroded by inconsistencies between their answers to questions in the ROI, their affidavit and their answers in cross-examination in four respects. I have dealt with one inconsistency concerning whether samples were collected in the offences period above. One inconsistency concerned the s 211(2) charge of Wollondilly Abattoirs which is not relevant to Mr Davis' charges. It is not necessary to consider the evidence in exhibits 1 and 2 which was concerned with that matter. The other inconsistencies concerned whether Mr Davis always received ALS reports and whether the then office manager prepared the false October 2016 report not the subject of a charge. I do not need to consider these matters further.
4. A finding of criminal negligence as identified in Fish and Orica of indifference to an obvious risk is not justified by these circumstances. While systems for ensuring compliance were plainly inadequate the extent of fraudulent activity was also not predictable in my view. According to the SOAF, Mr Davis thought that as he was taking the samples required, the other steps in the process were taking place. He did not check that they were. I do not consider the provision of a number of fraudulent reports to be an obvious risk in the circumstances of a small office in a longstanding business where Mr Davis had worked for a total of 36 years and the staff knew each other well. The absence of appropriate checking systems is apparent but does not amount to criminal negligence.

Maximum penalty

1. The maximum penalty for an offence is relevant to determining objective gravity in that it reflects Parliament's expression of the seriousness of the offence: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 (Kirby P, Campbell and James JJ agreeing).
2. The maximum penalty for an offence under s 66(2) of the POEO Act is $250,000 in the case of an individual (s 66(2)(b)) and consequently also for Mr Davis due to the operation of s 169(1).

Sentencing considerations under s 241 POEO Act

1. It is necessary to consider those matters referred to in s 241 which are relevant to these offences.

Extent of the harm caused or likely to be caused to the environment by the commission of the offence (s 241(1)(a))

1. The SOAF contains agreed matters concerning environmental harm. There is no evidence of actual environmental harm over the charge period because Wollondilly Abattoirs did not provide the EPA with any genuine results of analysis of effluent samples collected on the premises throughout this period. There was potential for environmental harm resulting from the application of effluent to land where the effluent was not appropriately monitored or reported. The likelihood of environmental harm arising is unknown or more accurately the EPA has not established beyond reasonable doubt what is the likelihood of harm occurring, a difficult matter to prove on that standard in any event.
2. The EPA submitted that the lack of accurate and timely data presents a barrier to the connection of Wollondilly Abattoirs' premises to Sydney Water's treatment system as an ongoing pollution reduction strategy. I consider the primary harm caused was undermining of the efficacy of the environmental protection legal framework.

Practical measures that may be taken to prevent, control, abate or mitigate that harm (s 241(1)(b))

1. Mr Davis could have ensured testing carried out was sent to ALS and put in place a series of checks and balances to ensure no false information could be included in the reporting documents.

Extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence (s 241(1)(c))

1. Mr Davis could have reasonably foreseen that if false reporting information was provided to the EPA there was a real possibility that harm could be caused to the environment as any potential pollutants would be unmonitored.

Extent to which the person who committed the offence had control over the causes that gave rise to the offence (s 241(1)(d))

1. The EPA submitted that the offences arose out of conduct that Mr Davis as the general manager at the time of the offences had fully in his control. I have already held that fraudulent reporting to this extent was not an obvious risk Mr Davis could have been expected to be aware of.

Whether, in committing the offence, the person was complying with orders from an employer or supervising employee (s 241(1)(e))

1. Given that Mr Davis is guilty by virtue of s 169(1) this subsection does not strictly arise. In any event, it does not apply in these circumstances.

Conclusion on objective seriousness

1. The objective seriousness of the offences is at the high end of low objective seriousness.

Application of ss 10 and 10A of the CSP Act

1. Mr Davis' counsel submitted that the Court should consider making an order under s 10A of the CSP Act or alternatively s 10 which state: Part 2 Penalties that may be imposed … Division 3 Non-custodial alternatives … 10 Dismissal of charges and conditional discharge of offender (1) Without proceeding to conviction, a court that finds a person guilty of an offence may make any one of the following orders: (a) an order directing that the relevant charge be dismissed, (b) an order discharging the person under a conditional release order (in which case the court proceeds to make a conditional release order under section 9), (c) an order discharging the person on condition that the person enter into an agreement to participate in an intervention program and to comply with any intervention plan arising out of the program. ... (3) In deciding whether to make an order referred to in subsection (1), the court is to have regard to the following factors: (a) the person's character, antecedents, age, health and mental condition, (b) the trivial nature of the offence, (c) the extenuating circumstances in which the offence was committed, (d) any other matter that the court thinks proper to consider. ... 10A Conviction with no other penalty (1) A court that convicts an offender may dispose of the proceedings without imposing any other penalty. (2) Any such action is taken, for the purposes of the Crimes (Appeal and Review) Act 2001 and the Criminal Appeal Act 1912, to be a sentence passed by the court on the conviction of the offender.
2. The three matters in s 10(3) must be considered but it is not necessary to satisfy all of these matters before a court exercises its discretion to make an order: R v Paris [2001] NSWCCA 83 at [42] (Simpson J, Wood CJ at CL and Ipp AJA agreeing) cited by me in Moseley v Queanbeyan-Palerang Regional Council (No 2) [2017] NSWLEC 52 at [53].
3. Considering s 10(3)(a), Mr Davis is guilty by virtue of s 169(1) because of the breaches by Wollondilly Abattoirs of s 66(2). Mr Davis has worked at that company on and off for over 30 years. He has lost his job as a result of these offences. His character references at [32]-[33] attest to his hard work at the company for a lengthy period and that he is well regarded in his community.
4. The offences are not trivial (s 10(3)(b)) given their number, the lengthy period over which they occurred and the harm to the regulatory framework under the POEO Act.

Subjective circumstances

1. Section 21A(3) of the CSP Act identifies a number of mitigating circumstances that can be considered when sentencing where relevant.

Harm caused by offence was not substantial (s 21A(3)(a))

1. There is no evidence of actual environmental harm and I have found above that the EPA has not proved beyond reasonable doubt there was a risk of environmental harm. The harm caused by the offences was to the effectiveness of the regulatory system and that harm is substantial in that the necessary data identifying whether there was excessive pollutants escaping in breach of the approval conditions was not available for 12 months, a lengthy period.

No prior convictions (s 21A(3)(e))

1. Mr Davis does not have any prior convictions.

Good character (s 21A(3)(f))

1. I accept that Mr Davis is a person of good character in light of the numerous favourable references provided by him ([32]-[33] above).

Unlikely to reoffend (s 21A(3)(g))

1. Mr Davis is unlikely to re-offend as a practical matter, having lost his job. Further the nature of s 66(2) as an offence attracting special executive liability means that he is guilty by virtue of the company's offences.

Good prospects of rehabilitation (s 21A(3)(h))

1. Mr Davis has good prospects of rehabilitation in light of [81]-[82] above.

Remorse (s 21A(3)(i))

1. Mr Davis' counsel submitted that he has shown remorse in that he has pleaded guilty and made admissions in a lengthy SOAF. These are muted indications of remorse in that usually I would have a sworn affidavit from a defendant indicating his remorse, preferably referring to actions taken to demonstrate that remorse. In any event, as his counsel submitted any absence of remorse cannot increase the sentence, rather there may be no further discount beyond the utilitarian value of the plea of guilty.

Early plea of guilty (ss 21A(3)(k), 22)

1. An early plea of guilty may entitle Mr Davis to a discount in penalty in the range of 10-25 percent: R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 309 at 419. This range is intended to be a guide only, it does not create a presumption or entitlement to a particular discount in a given situation: R v Araya (2005) 155 A Crim R 555; [2005] NSWCCA 283 at [44].
2. Mr Davis has pleaded guilty at an early stage of the proceedings. Proceedings were commenced on 9 May 2018 and a plea was entered on 24 August 2018 prior to the listing of the matter for hearing. A substantial discount reflecting the utilitarian value of the plea is appropriate.

Assistance to authorities (s 21A(3)(m))

1. Mr Davis has provided assistance to the EPA by making admissions of facts for the purposes of the hearing on sentence and voluntarily engaged in an interview with the EPA (par 70 of the SOAF).

Deterrence

1. Deterrence is an important factor in sentencing for environmental offences. As held by Preston CJ in Bentley v BGP Properties Pty Ltd (2006) 145 LGERA 234; [2006] NSWLEC 34 at [139]-[140]: The sentence must serve the purpose of general or public deterrence. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only light punishment will be imposed: R v Rushby [1977] 1 NSWLR 594 at 597 to 598. This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines: Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349 at 354 and Director-General, National Parks and Wildlife v Wilkinson [2002] NSWLEC 171 (27 September 2002) at paras 85 and 93 per Lloyd J.
2. Specific deterrence is a principle of sentencing pursuant to s 3A(b) of the CSP Act.
3. The EPA submitted that the sentence imposed must create a disincentive to those who work in and manage companies. As Mr Davis is no longer employed at Wollondilly Abattoirs the principle of specific deterrence should be given lesser weight.

Retribution and denunciation

1. Section 3A(a), (e) and (f) of the CSP Act set out retribution and denunciation as part of the purposes of sentencing and as such the Court needs to take them into account. This consideration applies equally to strict liability offences.

Totality principle

1. The sentencing principle of totality is relevant where more than one similar offence is committed to ensure that the sum of any fines imposed is not disproportionate to the total criminality of a defendant: Environment Protection Authority v Wattke; Environment Protection Authority v Geerdink [2010] NSWLEC 24 at [98] citing Mill v The Queen (1988) 166 CLR 59; [1988] HCA 70 at 62; Postiglione v The Queen (1997) 189 CLR 295; [1997] HCA 26; and Pearce v The Queen (1988) 194 CLR 610; [1988] HCA 57. As there are several offences arising essentially from similar circumstances I will apply the totality principle in setting penalties.

Even-handedness

1. The principle of even-handedness requires that the Court consider if there is any sentencing pattern for like offences in order to determine a consistent approach to penalty: R v Visconti [1982] 2 NSWLR 104. This principle must always be applied subject to the particular circumstances of the case before the Court: Hoare v The Queen (1989) 167 CLR 348; [1989] HCA 33. The principle of even-handedness in sentencing so that like offences receive like sentences is recognised, but each case must be determined on its own facts: Hili v The Queen; Jones v The Queen (2010) 242 CLR 520; [2010] HCA 45 (Hili). A history of sentencing in other cases does not limit my sentencing discretion. In Hili the High Court (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) held at [54] that: In Director of Public Prosecutions (Cth) v De La Rosa at [303]-[305], Simpson J accurately identified the proper use of information about sentences that have been passed in other cases. As her Honour pointed of at [303], a history of sentencing can establish a range of sentences that have in fact been imposed. That history does not establish that the range is the correct range, or that the upper or lower limits to the range are the correct upper and lower limits. As her Honour said at [303]: "Sentencing patterns are, of course, of considerable significance in that they result from the application of the accumulated experience and wisdom of first instance judges and of appellate courts." But the range of sentences that have been imposed in the past does not fix "the boundaries within which future judges must, or even ought, to sentence" at [304]. Past sentences "are no more than historical statements of what has happened in the past. They can, and should, provide guidance to sentencing judges, and to appellate courts, and stand as a yardstick against which to examine a proposed sentence "at [304] (emphasis added). When considering past sentences, "it is only by examination of the whole of the circumstances that have given rise to the sentence that "unifying principles" may be discerned" at [304] citing Wong v R [2001] HCA 64; (2001) 207 CLR 584 at 606 [59].
2. In Environment Protection Authority v Wyanga Holdings Pty Ltd; Environment Protection Authority v Cauchi [2015] NSWLEC 78 Wyanga Holdings Pty Ltd (Wyanga) held an EPL for a quarry which required it to supply an annual return to the EPA. In one annual return Wyanga failed to report its contravention of the condition limiting extraction of material to 50,000 tonnes. Mr and Mrs Cauchi directors of Wyanga signed the annual return certifying that the information in it was correct and not false or misleading. Wyanga and by virtue of s 169(1) Mr and Mrs Cauchi were charged with offences against s 66(2) of the POEO Act. The offences were found to be of moderate objective seriousness. There was no environmental harm caused and the defendants were negligent and reckless.. The defendants had no prior convictions and expressed remorse. The penalty was apportioned primarily to Mrs Cauchi (because Wyanga had little financial resources) who was fined $24,000 (in addition to $3,000 for three other offences). Mr Cauchi and Wyanga received nominal fines of $1,000 and $500 respectively in addition to being fined $75,000 for three other offences and $3,000 for three other offences respectively.

EPA's costs

1. The parties have agreed that Mr Davis is to pay $40,000, a substantial sum, for the EPA's costs as provided for in ss 257B and 257G of the Criminal Procedure Act 1986.

Penalty imposed

1. When sentencing the Court must apply the instinctive synthesis approach by identifying all the relevant factors, discussing their importance and making a "value judgment as to what is the appropriate sentence given all the factors of the case": Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 at [26] unanimously following Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 25 at [51] per McHugh J. The sentence must reflect all the relevant objective circumstances of the offence and subjective circumstances of the defendant: Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 at 490 (Jacobs J) and Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14 (Veen (No 2)) at 472-73 (Mason CJ, Brennan, Dawson and Toohey JJ), 490-491 (Deane J). The sentence should not exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances": Veen (No 2) at 472, 485-86, 490-91, 496 and Hoare v The Queen at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ).
2. As an administrative matter, all fines should be paid to the Registrar of the Land and Environment Court.

Orders

1. The Court makes the following orders: 1. In summons no 18/145865 Gregory John Davis is convicted of the offence against s 66(2) of the Protection of the Environment Operations Act 1997 (POEO Act) by reason of s 169(1) of that Act in that he was a person concerned in the management of Wollondilly Abattoirs Pty Limited (ACN 067 281 645) (the Corporation) and the Corporation, as the holder of an environment protection licence, supplied information to the appropriate regulatory authority under the conditions of the licence, being information that was false or misleading in a material respect. 2. In summons no 18/145865 Gregory John Davis is fined $10,000. 3. In summons no 18/145866 Gregory John Davis is convicted of the offence against s 66(2) of the POEO Act by reason of s 169(1) of that Act, in that he was a person concerned in the management of the Corporation and the Corporation, as the holder of an environment protection licence, supplied information to the appropriate regulatory authority under the conditions of the licence, being information that was false or misleading in a material respect. 4. In summons no 18/145866 Gregory John Davis is fined $500. 5. In summons 18/145867 Gregory John Davis is convicted of the offence against s 66(2) of the POEO Act by reason of s 169(1) of that Act, in that he was a person concerned in the management of the Corporation and the Corporation, as the holder of an environment protection licence, supplied information to the appropriate regulatory authority under the conditions of the licence, being information that was false or misleading in a material respect. 6. In summons 18/145867 Gregory John Davis is fined $500. 7. In summons 18/145868 Gregory John Davis is convicted of the offence against 66(2) of the POEO Act by reason of s 169(1) of that Act, in that he was a person concerned in the management of the Corporation and the Corporation, as the holder of an environment protection licence, supplied information to the appropriate regulatory authority under the conditions of the licence, being information that was false or misleading in a material respect. 8. In summons 18/145868 Gregory John Davis is fined $500. 9. In summons 18/145869 Gregory John Davis is convicted of the offence against s 66(2) of the POEO Act by reason of s 169(1) of that Act, in that he was a person concerned in the management of the Corporation and the Corporation, as the holder of an environment protection licence, supplied information to the appropriate regulatory authority under the conditions of the licence, being information that was false or misleading in a material respect. 10. In summons 18/145869 Gregory John Davis is fined $500. 11. Gregory John Davis is to pay $40,000 for the Environment Protection Authority's costs as provided by ss 257B and 257G of the Criminal Procedure Act 1986. 12. The exhibits are returned.

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: 12 June 2019