Environment Protection Authority v Fernando and Another

Introduction 1 There are two defendants before the Court to answer charges in relation to the same events. In matter No. 50047 of 2003 Chester Fernando is charged that on the 24 January 2002 off the Putty Road south of Singleton ("the place") he committed an offence against s 143(1)(a) of the Protection of the Environment Operations Act 1997 ("the PEO Act"), in that he did transport waste to that place, being a place that could not lawfully be used as a waste facility for the waste. 2 In matter No. 50048 of 2003 Steadfast Maintenance Services Pty Limited ("the company") is separately charged with the same offence, as a consequence of Chester Fernando and David Pereghy, employees of the company, transporting the waste to the place and dumping it.

3 Section 143(1) of the PEO Act provides that if a person transports waste to a place that cannot be lawfully used as waste facility for that waste, a person is guilty of an offence. In the case of a corporation the maximum penalty is $250,000. In the case of an individual the maximum penalty is $120,000. Each of the defendants has entered a plea of guilty. 4 The facts in support of a plea in mitigation are diverse. The Offence 5 The company operates a cleaning service business. Chester Fernando is a paid employee and at the time of the offence held the position of manager. 6 The company is a trustee of the Fernando Trust trading under the business name of Steadfast Maintenance Services Pty Limited. The Trust was created in 1978 as a discretionary trust. The original settlor was Terence ("Terry") Fernando, who is the father of Chester Fernando, and holds the positions of Director and Secretary of the company. 7 In January 2002 the company contracted to carry out a clean up of a unit in the Metro Centre at Rydalmere ("the Metro Centre"), previously occupied by a printing company which had gone into liquidation. The sum quote included the collection and disposal of all drums of chemicals, in addition to general cleaning, window cleaning, carpet cleaning, the removal of wooden pallets, the removal of paper products and the demolition of timber framework. 8 After carrying out certain cleaning tasks on 22 January 2002 Chester Fernando and Mr Pereghy loaded drums of chemicals and some smaller tins onto a white van owned by the company, with the intention of transporting them to the company office at Yagoona in accordance with instructions issued by Terry Fernando. Terry Fernando had obtained a quote from Collex for the removal of the contents of the drums and tins. Prior to loading, the contents from some of the smaller tins were added to the contents of the larger drums. Instead of transporting the tins and drums to Yagoona, Chester Fernando decided to dump the material elsewhere. Chester Fernando explained to Mr Pereghy that he had under-quoted for the job. He informed Mr Pereghy that he had been advised "if you take it outside the UBD area, you got no problem, you know, the places where things are dumped." 9 Chester Fernando drove the van along the Putty Road towards Singleton for approximately two hours. He then took the van along a dirt road off the Putty Road at Milbrodale, near a Roads and Traffic Authority stockpile area adjacent to McDonalds River, 62 kilometres south of Singleton. The drums and tins were unloaded and placed on the dirt road around and near an existing mound of rubbish. 10 Following a report on 24 January 2002 the New South Wales Fire Brigade stationed at Singleton, the Bulga Rural Fire Service Brigade and officers from the Newcastle Office of the Environment Protection Authority ("the EPA") attended at the site. Samples were taken from each container for analysis. There were 46 containers in total. The drums were collected by Cleanaway on 26 January 2002. Following analysis, the contents of the containers were variously classified as non-controlled aqueous liquid waste, hazardous waste and Group A waste. 11 Further enquiries led to an EPA officer speaking to Chester Fernando by telephone on Friday 8 February 2002. Asked about the removal of waste from the Metro Centre, Chester Fernando responded with words to the effect "the place was left open all the time, we didn't take it" and "we don't own a white Hiace with blue writing." 12 Following that phone call Chester Fernando peeled off the writing on the company's van, arranged for the tyres to be changed and for the van to be "buffed up" with the intention of concealing the identity of the van. On that same afternoon, however, Chester Fernando advised his father of what he had done. According to Terry Fernando, he only became aware of the incident at that time. 13 On 11 February 2002 Chester Fernando telephoned the EPA officer and the following day attended at the Newcastle Office of the EPA where he, together with Mr Pereghy, gave a full and frank account of the incident. 14 Prior to the disclosure of the true position to this father, Chester Fernando had advised Terry Fernando that the drums of chemicals had disappeared. When Terry Fernando asked "how" Chester Fernando said, "Dad, you know the whole place is open. We lost 6 Fire Extinguishers so anybody could have taken it away." 15 It is no surprise that no permission had been granted for the land at Milbrodale to be used as a waste facility. Chester Fernando 16 For the purpose of 241(1)(a) of the PEO Act there was no actual harm caused to the environment by the commission of the offence, primarily because the fire brigades and the EPA initiated a prompt response to the information received. 17 Some of the chemicals sampled contained hazardous waste and some were flammable. Dumping of chemicals in this category in bushland leaves them exposed to the ravages of bushfire, in particular, vandalism and the deteriorating effect from exposure to adverse weather conditions. Even if the goods had been transported to Yagoona as planned, the company had no formal procedures for identifying the contents of the containers or appropriate facilities for handling hazardous waste, such as the availability of protective equipment. The evidence is that the premises were open and that there was experience of unauthorised persons having access to the premises. 18 The practical measures that may have been taken to prevent, control, abate or mitigate the harm (if it had occurred) are obvious and readily available. The company had even contracted with Collex for the appropriate removal of the material. The only reason this was not followed up was that Chester Fernando was seeking to avoid a cost of $1,500 as he had under-quoted on the job. 19 The incident was completely foreseeable and Chester Fernando had complete control over the causes which gave rise to the offence. He was the manager of the company and the principal employee responsible for the undertaking of the contract at the Metro Centre. 20 Section 241(1)(e) does not strictly apply, although technically Chester Fernando was complying with directions of the company to carry out the work at the Metro Centre. Even those directions involved an illegality by requiring him to transport the chemicals to the company's premises. 21 There is a real case for demonstrating the need for general deterrence in the punishment of Chester Fernando. That need is in addition to the important aspect of deterrence to Chester Fernando as an individual. The nature of the business in which he is employed is such that the temptation can be expected to arise regularly, even if the Court can be satisfied that Chester Fernando realises that his actions were irresponsible and stupid. In the course of carrying out the offence he mentioned to Mr Pereghy the need to ensure that the chemicals were dumped at a location where there would not be any danger to houses or schools and hence to ensure that the dumping place was remote. Such commendable aspirations are inconsistent with his intention to dump the containers other than at an authorised waste facility. There is no doubt that Chester Fernando knew that what he was doing was contrary to law, dangerous and deceitful. 22 The defendant's conduct was deliberate and dishonest, placing the seriousness of this particular offence and his culpability at the highest end of the scale. It is only fortuitous that no actual environmental harm occurred. 23 In this defendant's favour he ultimately co-operated with the EPA and volunteered a confession, assisted the EPA with its enquiries and agreed to provide a record of interview. A plea of guilty was entered at the earliest opportunity. The defendant facilitated an efficient hearing by participating in the preparation of an Agreed Statement of Facts. 24 Chester Fernando is married and has two children. He has established himself in business in the role of manager of the company and otherwise appears to be regarded as a person of good character. 25 Mr Atkin, who appears on his behalf, tendered a written report from a forensic psychiatrist, Dr Stephen H Allnutt, over the objection of the prosecutor. Dr Allnutt was not called to give evidence in person and accordingly there has been no opportunity to test his evidence. He states in his written report that Chester Fernando presents the symptoms of a resolving major depressive disorder, brought about by a tendency to feel excessively responsible for incidents that occur in his life with an exaggerated vulnerability to feel overwhelming responsibility and very strong feelings of guilt in relation to mistakes. He is said to feel a deep sense of guilt, remorse and regret at having made the decision that he made at the date of the alleged offence. Chester Fernando himself has not given evidence. His alleged feelings of guilt and remorse are commendable but they do little to excuse the overt actions on 22 January 2002. 26 Chester Fernando must be regarded as primarily responsible for the offence. In some respects what he did might be regarded as a frolic outside the terms of his employment and for which he must take full responsibility. It is appropriate in the circumstances to determine the punishment for Chester Fernando without any regard to the involvement of the company. 27 His early plea of guilty, ultimate co-operation with investigating officers, the fact that it is his first offence of an environmental nature and his otherwise apparent good character are the only mitigating factors. After allowing for an appropriate discount in respect of these matters, the Court is nevertheless of the opinion that the deliberate and overt acts of the defendant and the nature of those acts demand a significant and substantial penalty, in addition to the payment of costs to the prosecutor which he has agreed to pay in conjunction with the company. 28 Chester Fernando will be ordered to pay a monetary penalty by way of a fine in the sum of $60,000. That is notwithstanding that Chester Fernando and the company have given a joint and several undertaking to meet the costs of the clean-up of the site. Steadfast Maintenance Services Pty Ltd 29 To a very large extent the circumstances as they involve the company have already been explained. There appears to be no issue that the company is before the Court in its capacity as a trustee of the discretionary trust and that the business is carried on by the company in a nominal capacity. The company itself does not trade and has no assets. 30 The business conducted by the trustee generates a profit from time to time. There is evidence that historically through the good offices of Terry Fernando, the company has applied at least part of its profits to a number of charitable organisations. It is not disputed that Terry Fernando is highly regarded by a number of charitable organisations generally associated with the Catholic Church and that he has made significant benevolent bequests and carried out good works from time to time over the years. He has used the trust as a vehicle for achieving these charitable objectives so that, in a sense, one of the ultimate objectives of the trust can be recognised as being to generate funds for benevolent purposes. 31 Furthermore, it must be said in the company's favour that Chester Fernando embarked upon an escapade that was clearly outside what might be considered to be the reasonable and authorised actions of a manager acting on behalf of his employer. Nevertheless, Chester Fernando acknowledges that the actions he took were for the benefit of the company in order to avoid the cost and expense of disposing of the chemicals through the proper channels. Furthermore, if the strict procedure expected by Terry Fernando, acting on behalf of the company as trustee, had been followed an offence would have nonetheless occurred. It is not appropriate, therefore, that the company be exonerated from any blame for the offence. The plea recognises this in any event (Reg v O'Neill [1979] 2 NSWLR 582).