Environment Protection Authority v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman

ncil (2006) 145 LGERA 189; [2006] NSWLEC 242 Keir v Sutherland Shire Council [2004] NSWLEC 754 Leichhardt Council v Geitonia Pty Ltd (No 7) [2015] NSWLEC 79 Markarian v The Queen (2005) 228 CLR 357; [2005] HCA 39 Minister for the Environment and Heritage v Greentree (No 3) (2004) 136 LGERA 89; [2004] FCA 1317 Mouawad v The Hills Shire Council (2013) 199 LGERA 28; [2013] NSWLEC 165 Muldrock v The Queen (2011) 244 CLR 120; [2011] HCA 39 Palfrey v Spiteri; Palfrey v South Penrith Sand & Soil Pty Ltd; Palfrey v Roberts [2014] NSWSC 842 Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178 R v Holder R v Johnston [1983] 3 NSWLR 245 R v Olbrich (1999) 199 CLR 270 R v Rahme (1989) 43 A Crim R 81 R v Sgroi (1989) 40 A Crim R 197 Shannongrove Pty Ltd v Environment Protection Authority (2013) 84 NSWLR 668; [2013] NSWCCA 179 The Hills Shire Council v Kinnarney Civil & Earthworks Pty Ltd (No 2) [2012] NSWLEC 95 Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14 Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 68 Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 6) [2013] NSWLEC 143 Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 7); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council (No 2) [2013] NSWLEC 157 Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 8) [2013] NSWLEC 168 Texts Cited: United States Sentencing Commission, Guidelines Manual (2014) Category: Sentence Parties: Environment Protection Authority (Prosecutor) Foxman Environmental Development Services (First Defendant) Botany Building Recyclers Pty Ltd (Second Defendant) Phillip Foxman (Third Defendant) Representation: Counsel: Mr P English, barrister (Prosecutor) Mr A Isaacs, barrister (First and third defendants) No appearance (Second defendant - see [7])

Solicitors: Environment Protection Authority (Prosecutor) Whittens and McKeough (First and third defendants) N/A (Second defendant) File Number(s): 2016/158950 (formerly 51244 of 2011)2016/159008 (formerly 51251 of 2011)2016/159009 (formerly 51252 of 2011)2016/159126 (formerly 51249 of 2011)2016/159127 (formerly 51253 of 2011)2016/159128 (formerly 51254 of 2011)

Introduction

1. Phillip Foxman ("Foxman") and the two defendant companies, which are closely associated with him, are now before the Court to be sentenced.
2. The Environment Protection Authority ("EPA") successfully prosecuted six charges brought under the Protection of the Environment Operations Act 1997 ("POEO Act") on 22 December 2011 - Environment Protection Authority v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman ("trial judgment", or "TJ") [2015] NSWLEC 105. Mr Phillip English of counsel appeared for the Prosecutor both at trial and at the sentencing hearing.
3. The penalties prescribed for each of the six offences are $250,000 for an individual and $1 million for a corporation. The POEO Act also provides for daily penalties when offending continues, but none are sought in the present case.
4. The charges ([30] below) concerned transportation, and placement on land, of "waste" (actually "special"/asbestos waste).
5. The alleged "waste" was particularised as "material comprising processed construction and demolition waste and asbestos", and the charges involved its transportation by truck, and the unlawful use of the destination property as a "waste facility" for disposal of "waste", compliant with the relevant legal definitions, and not covered by any relevant exemptions (trial judgment, at [80] - [143], [181] - [209], and [210] - [258]).
6. Cases such as this are fraught with complexity in all Australian jurisdictions - in NSW, one need consider only such recent cases as Shannongrove Pty Ltd v Environment Protection Authority (2013) 84 NSWLR 668; [2013] NSWCCA 179 and Environment Protection Authority v Terrace Earthmoving Pty Ltd (2013) 84 NSWLR 679; [2013] NSWCCA 180 to appreciate the complexity of "waste' cases in this state. While this judgment was reserved, Craig J discussed many of the relevant issues in his judgment in Environment Protection Authority v Terrace Earthmoving Pty Ltd (No 3) [2016] NSWLEC 50.

The Three Defendants

1. The defendant company Botany Building Recyclers Pty Ltd ("BBR") is in liquidation, and neither appeared, nor was represented, at the sentencing hearing, but the appointed liquidator was aware of it (Exhibit P3).
2. Foxman himself had appeared in person for all three defendants at the trial, but, at the sentencing hearing, Mr Andrew Isaacs of counsel appeared for him and for the other corporate defendant, Foxman Environmental Development Services Pty Ltd ("FEDS") - but not for BBR.
3. At the trial, Foxman, appearing on behalf of himself and both his companies, was very candid and forthright (TJ [65]), both as witness and advocate, but he made many damaging concessions and admissions, in an effort to explain his behaviour, and argue matters of mitigation, rather than guilt/innocence (TJ [178]).
4. Foxman gave affidavit and oral evidence at the sentencing hearing as well, and I have had regard to all he said in his written materials, and orally, at both hearings (see Mr Isaacs at T13.11.15, p86, LL6 - 13).
5. Insofar as Foxman has argued how much better for him and his companies the Western Australian waste and asbestos regimes are, in comparison to NSW, I am fortified in my conclusions, about the material and activities involved in this case, by the recently reported decision of Beech J in the Western Australia Supreme Court, Eclipse Resources Pty Ltd v Western Australia (No 4) (2016) 215 LGERA 329; [2016] WASC 62 (see, re "waste", pars [500]ff, especially [553]ff).

The Facts in Brief

1. BBR owned and operated a "materials processing" plant at Banksmeadow, from which site the offending material involved in this matter was transported to, and placed on, 76 ha of land known as "Foxman's Valley", near The Oaks in Wollondilly Shire.
2. "Foxman's Valley" was purchased by FEDS with the stated objective of becoming Foxman's retirement home, but he also wanted somewhere to develop his roadbase. It could not lawfully be used for "waste".
3. Foxman conceded at trial that he was the "directing mind and will" of both defendant companies (TJ [260], [279], and [284]), and had "complete control" of the actions taken by all three defendants. (See also defence submissions, par 34.)
4. Although not strictly necessary for the Court to quantify the amount of waste in order to find the offences proved, the Prosecutor established at trial, beyond reasonable doubt, that the material transported and placed comprised/included 15,900 tonnes of "waste" contaminated by asbestos, and/or lead, and/or "foreign matter".

Enforcement action was taken in both Classes 4 and 5

1. The actions of these defendants from 2009 onwards came to the adverse notice not only of the EPA, but also of the local Wollondilly Council ("Council").
2. That Council brought Class 4 civil enforcement proceedings in this Court, and, on 22 May 2013, Pepper J granted the declaratory and injunctive relief sought in those proceedings: Wollondilly Shire Council v Foxman Environmental Development Services Pty Ltd (No 5); Foxman Environmental Development Services Pty Ltd v Wollondilly Shire Council [2013] NSWLEC 68 (detailed orders at [310]).
3. On 6 September 2013, her Honour published a sixth judgment ([2013] NSWLEC 143), refusing an application by the three present defendants for a "stay" on her orders.
4. On 18 September 2013, her Honour published a seventh judgment ([2013] NSWLEC 157), in which she (1) added an additional order requiring BBR to remove the fill from the identified land, and dispose of it at a licensed facility (or facilities), and (2) ordered the three present defendants to pay Council's costs up to and including 22 May 2013.
5. On 3 October 2013, her Honour published an eighth judgment ([2013] NSWLEC 168), dismissing a Notice of Motion ("NOM") by Foxman and FEDS seeking an order "revoking, varying, supplementing or replacing, in whole or in part" the orders in judgment No. 5. BBR was joined in the application by reason of the orders made in judgment No. 7.
6. In early 2015, Council brought contempt proceedings in the Class 4 matter, and the defendants pleaded not guilty. Those contempt proceedings were case-managed by the Registrar, and then by Pepper J.
7. The EPA's six 2011 Class 5 proceedings were defended, and came before me for hearing, together, throughout February and March 2015.
8. I reserved my Class 5 decision on 31 March 2015.
9. Pepper J recorded on the Class 4/contempt file, on 17 April 2015: [Respondents] broke and cannot afford to comply with orders. Council accepts land won't be remediated but want it capped and stabilised. BBR now in liquidation. ...
10. On 1 June 2015, her Honour noted: Advanced draft deed being finalised by the parties to resolve the matter. Experts still conferring. ...
11. On 25 June 2015, her Honour noted: Deed finalised but not executed because Mr Foxman wanted legal advice on some discrete terms of the Deed. ... Foxman now overseas to return mid July ...; and stood the contempt matter over to 27 July 2015, noting: If no Deed signed and consent orders made on that day, Court to make orders setting down foreshadowed contempt N of M for hearing.

The Six Charges Found Proven

1. My formal findings on guilt were set out (TJ [306]) in these terms (emphasis and new matter numbers added): 306 ... I find the defendants guilty of all the offences charged, namely: (1) In relation to Foxman Environmental Development Services Pty Ltd that, from about 1 May 2009 to about 30 September 2013, as the owner of the Land, it used the Land as a waste facility without lawful authority in contravention of s 144(1) of the POEO Act (matter 51244 of 2011[now 2016/158950]). (2) In relation to Botany Building Recyclers Pty Ltd that: (a) between about 1 May 2009 to 30 September 2009 inclusive, it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act (matter 51251 of 2011 [now 2016/159008]); and (b) between about 12 January 2010 to 22 April 2010 inclusive, it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act (matter 51252 of 2011 [now 2016/159009]). (3) In relation to Phillip Foxman, by reason of s 169(1) of the POEO Act that: (a) between about 1 May 2009 to about 30 September 2013, he committed an offence in contravention of s 144(1) of the POEO Act (matter 51249 of 2011 [now 2016/159126]); (b) between about 1 May 2009 to 30 September 2009 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act (matter 51253 of 2011 [now 2016/159127]); and (c) between about 12 January 2010 to 22 April 2010 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act (matter 51254 of 2011 [now 2016/159128]).
2. The relevant sections of the POEO Act, as they stood at the relevant dates, were set out in the TJ (at [22]), but are repeated here for completeness: 143 Unlawful transporting or depositing of waste (1) Offence If a person transports waste to a place that cannot lawfully be used as a waste facility for that waste, or causes or permits waste to be so transported: (a) the person, and (b) if the person is not the owner of the waste, the owner, are each guilty of an offence. Maximum penalty: (a) in the case of a corporation - $1,000,000, or (b) in the case of an individual - $250,000. ... (4) Definitions In this section: ... owner of waste includes, in relation to waste that has been transported, the person who was the owner of the waste immediately before it was transported. ... 144 Use of land as waste facility without lawful authority (1) A person who is the owner or occupier of any land and who uses the land, or causes or permits the land to be used, as a waste facility without lawful authority is guilty of an offence. Maximum penalty: (a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or (b) in the case of an individual - $250,000 and, in the case of a continuing offence, a further penalty of $60,000 for each day the offence continues. (2) In any proceedings for an offence under this section the defendant bears the onus of proving that there is lawful authority to use the land concerned as a waste facility. ... 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: (a) (Repealed) (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.

The Trial Judgment

1. In its written submissions on sentencing (pars 2 to 5), the Prosecutor drew attention to a number of paragraphs in my trial judgment, namely [2], [12], [13], [52], [53], [56], [58], [137] - [143], [185], [195], [196], [207], [224], [257], and [305].
2. Those extracts covered: 1. the relevant operational history of the placement of material; 2. the defendant's extensive dealings with regulators, trying to secure relevant approvals or exemptions; 3. the amount of fill (15,900 tonnes, TJ [58]), an amount "well above that required by [Foxman's] 2009 consent" (TJ [56] and [195]); and 4. the "substantial alteration caused by [its] deposition ... on the land, in two separate stockpiles" (TJ [185]).
3. In the interests of brevity, I will not repeat all that material, but some of those paragraphs deserve particular notation, as do some others to which counsel referred during the sentencing hearing.
4. Firstly, I set out pars [207], [257] and [305] of the TJ: 207 I am, therefore, satisfied beyond reasonable doubt that all the material transported and deposited at the land by BBR in the relevant periods was "waste", as defined in the POEO Act. ... 257 For all those reasons, I am not satisfied, on the balance of probabilities, that the defendants had the benefit of any exemption entitling them to (lawfully) deposit the offending material at the subject land. ... 305 For those reasons, I am satisfied beyond reasonable doubt that BBR "caused" the material to be transported to the land. For the same reasons as given in respect of his personal guilt of the dumping offences (see [277] - [282] above), Foxman is guilty of both charges in respect of unlawful transportation of waste under s 143(1).
5. For completeness, I should also repeat now TJ pars [277] - [282] (cited in [305], quoted immediately above): 277 In certain prescribed circumstances, officers of a company that contravenes the POEO Act will also be guilty of the same breach (see s 169(1), at [22] above). 278 Biscoe J in Director-General, Department of Environment and Climate Change v Jack and Bill Issa Pty Ltd (No 5) [2009] NSWLEC 232; 172 LGERA 225 at [79], [82] - [83], discussed the legal principles surrounding the liability of corporate defendants for the conduct of its directors/employees, these principles are relevant in the attribution of liability to individuals for the conduct of corporations (emphasis mine and citations omitted): 79 A company can only act through living persons. In determining whether criminal liability should be attributed to a company for the conduct of a person, a distinction has been drawn between, on the one hand, a person who is the embodiment of the company because, often, he is its relevant "directing mind and will" and, on the other hand, an agent or servant for whom the company is vicariously liable. The former represents an organic theory of liability, the latter an agency theory of liability. The distinction is particularly significant for offences in which mens rea is an element where prima facie (absent a contrary legislative intention) a principal is not vicariously responsible for the acts of agents …That inhibition is absent in strict liability offences because mens rea is not an element: … 82 Although the formula "directing mind and will" is often the most appropriate description of the person designated by the relevant rule attributing personal conduct to a company, that is not so in all cases. The real question is, on the proper construction of the statute, whose act is intended to count as the act of the company? … 83 The act of a high-level employee or director may count as the act of the company because they represent the company's directing mind and will. But even the act of a low-level employee may count if that is required by the terms of the offence and the achievement of the policy objectives of the statute…Conduct of low-level employees, who did not represent the company's directing mind and will, has repeatedly been held to be sufficient in cases concerning regulatory offences where legislation regulated a sphere of social or economic activity in the public interest (see the cases reviewed in the ABC Developmental Learning Centres case at first instance at [10] - [14]). They are analogous with the present case. 279 There is absolutely no doubt that Foxman was the "directing mind and will" of FEDS, and that the actions of FEDS are directly attributable to him, and vice versa. Foxman conceded that he had complete control over the actions of FEDS (see [15] above). 280 It was Foxman's intention that the waste be stockpiled (on the land) for future use on the roads at Foxman's Valley, and that was a reason for completing the purchase in FEDS's name (see Exhibit P8, and Tp1115, L38 - p1116, L37). 281 The evidence of Roy Howell is that Foxman directed him as to where "to place and/or spread the material at Foxman Valley" (Exhibit P13, tab JI-7, Q 84). Pursuant to those instructions, Roy Howell directed truck drivers who delivered material to the site from the Banksmeadow facility (Exhibit P6, tab 29, Q96 - 116). 282 For those reasons I am satisfied that Foxman is also guilty of the/a breach of s 144(1) of the POEO Act.

Sentencing provisions and principles

1. In relation to sentencing, the following objects of the POEO Act, as set out in s 3, are relied on by the Prosecutor in this matter, in accordance with the principles in Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178: (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, ... (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, ... (e) to rationalise, simplify and strengthen the regulatory framework for environment protection, ...
2. The most relevant statutory purposes of sentencing in a case such as the present are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 ("the CSP Act") (Prosecutor's subs 6 and 7): (a) to ensure that the offender has been adequately punished for the offence; (b) to prevent crime by deterring the offender and other persons from committing similar offences; ... (e) to make the offender accountable for his or her actions; (f) to denounce the conduct of the offender; and (g) to recognise the harm done to the victim of crime and the community.
3. The POEO Act lists, in s 241(1), some relevant considerations for courts to take into account when assessing the objective seriousness of offences charged under the Act: (a) extent of actual or likely harm to the environment; (b) practical measures which may have been taken to prevent, control, abate or mitigate the harm; (c) the foreseeability of the harm caused or likely to have been caused to the environment; (d) control over the causes giving rise to the offence; and (e) compliance with orders from an employer.
4. Against the background of those statutory provisions, Bentley v BGP Properties Pty Limited (2006) 145 LGERA 234; [2006] NSWLEC 34 lists the following additional factors to consider in assessing objective gravity or seriousness of any offending: (a) the nature of the offence; (b) maximum penalty for the offence; (c) the Offender's state of mind in committing the offence; and (d) the Offender's reasons for committing the offence.

Orders now sought in Class 5

1. The Prosecutor seeks that all three offenders be convicted, and fined, and also ordered to pay the Prosecutor's costs, and its investigation expenses.

Costs and Expenses

1. The investigation expenses have been agreed in the amount of $4,646 (detailed in the affidavit of Blackman 10 November 2015, and payable pursuant to s 248(1) of the POEO Act).
2. The defendants ask that any order that they pay the Prosecutor's costs should be on an "agreed or assessed" basis (under s 257B of the Criminal Procedure Act 1986). The Prosecutor estimates its costs at $500,000 (T13.11.15, p90, LL12 - 29, and p91, LL31 - 48).

Publication Order

1. In addition to the payment of fines, costs and expenses, the Prosecutor seeks a "publication order", under s 250(1)(a) of the POEO Act, against all three defendants, and in the form of Annexure 'A' to the Prosecutor's submissions (dated and filed 30 October 2015).

Remediation Orders

1. The Prosecutor also seeks the following "remediation" orders, which are generally in line with the orders made by Pepper J in the Class 4 matter, and generally reliant on the work of the EPA expert, Dr Daniel Michael Martens (Prosecutor's subs par 70, as varied by its SMO, sub-pars v - vii), against the defendants Foxman and FEDS: v. Within 90 days of the date of this order, [FEDS] and Phillip Foxman must remove, or procure the removal of, the fill material from the land as identified in the Lean & Hayward survey dated 26 May 2010 annexed [to these submissions] and marked "B" and dispose of the waste at a waste facility or facilities licensed under the [POEO Act] to accept such waste. vi. Within 118 days of the date of this order, the Prosecutor's expert shall file an affidavit with the Court setting out the Offenders' compliance or otherwise with order (v) above. vii. Within 90 days of the date of these Orders or whichever other period the Court thinks appropriate, [FEDS] and / or Phillip Foxman are to provide receipts to the Prosecutor evidencing the lawful disposal of the waste the subject of the proceedings at a facility or facilities licensed under the [POEO Act] to accept such waste.
2. This Court has heard nothing further about any deed or further consent orders affecting Pepper J's orders in the Class 4 proceedings, so her Honour's remediation orders stand ([19] above).
3. In his evidence before me, Foxman estimated the costs of such "clean up" action at between $10M and $15M (T12.11.15, p54, LL23 - 33): Q. Now, you've indicated in your accounts an estimation, it's a director's estimation that the clean up bill at Foxman's Valley, pursuant to Pepper J's orders, would cost in the realm of $15 million. Is that right? A. It's an estimate of between $10 and $15 million, yes. Q. How did you come up with that estimate, Mr Foxman? A. From the Len Hayward survey which was about 15 or 16,000 cubic metres and we did a conversion factor of 2.2 tonnes to the cubic metre, came up with over 30,000 tonnes at approximately 300 to $350 per tonne for transport and tip fees including waste levies and plus there would be transport costs as well as machine hire and on site rehabilitation.
4. Foxman then gave the following evidence about related transportation costs (Tp55, LL1 - 7): Q. Mr Foxman, how much do you estimate the transportation costs in respect of the remediation works would cost? A. Well, the transportation side of it? I think we had a price from Dial A Dump at Eastern Creek that would accept the material and I think, the transport costs, they were looking at about $15 a tonne just for transport and then they wanted 300 or $350 a tonne as a tip fee which included the waste levy; and he agreed (L23) that Foxmans Holdings Pty Ltd could be contracted to assist with some of the remediation works.

Consideration

1. In arriving at the appropriate sentencing outcomes, the Court must now undertake the "instinctive synthesis" of objective and subjective factors and circumstances ([47] above).

Objective circumstances

1. As already noted ([56] above), the Prosecutor relied in this sentencing hearing upon the expert evidence of civil and environmental engineer, and scientist, Dr Daniel Martens, sworn on 15 October 2015, as to harm caused to the environment by the subject offences.
2. In the end, after Mr Isaacs had the opportunity to review Exhibit P19 from the trial, Martens was not required by the defence for any cross-examination.
3. I had preferred and accepted his evidence at trial (TJ [243]), and I accept his updated evidence on sentence.
4. For the purposes of the sentencing hearing, Dr Martens prepared two reports ("DM1" dated 14 September 2015, and "DM2" dated 15 October 2015), giving, as requested by the Prosecutor (on 6 August 2015), his expert opinion on: (a) the extent of any environmental harm (actual and potential) caused, or likely to be caused, by the application of the material in the Eastern Fill Area and the Western Fill Area to the land; (b) the nature of any risks to the environment or human health posed by the presence of the waste on the land.
5. On 3 and 4 September 2015, the Prosecutor made further requests of Dr Martens: 1. It sought his expert opinion on: "Options for steps that could be taken to: a. Prevent, control or mitigate any harm to the environment caused by the application of the material to the land in the Eastern Fill Area and the Western Fill Area. b. To make good any environmental damage resulting from the depositing of the material to the land in the Eastern Fill Area and the Western Fill Area. c. Otherwise remediate or clean up the to the land in the Eastern Fill Area and the Western Fill Area. You are aware of the orders made by Justice Pepper in the Class 4 proceedings. Your opinion is sought as to whether those orders are the most appropriate option or if any alternative orders would be better from an environmental perspective. Please provide reasons as to any opinions you hold in this regard." and 1. It sought his assessment of "the alternative draft Remediation Action Plan prepared by Andrew Lau", Foxman's expert, which was being discussed between the Class 4 parties (see [24] - [26] above).
6. Martens opines (DM1, ss 2.1 and 2.2) that the deposition of waste materials on the surface of land causes both actual environmental harm, by contamination of existing ecological systems, and the potential for future environmental harm, through further contamination and pollution, including by leachate. Such contamination/pollution poses an ongoing threat to human health through direct contact with asbestos, and/or leachate, and/or contaminated storm water entering local water systems.

Subjective Considerations

1. In terms of the s 21A(3) factors ([50] above), the written submissions of the Prosecutor (par 49) accepted, as mitigating factors, that the offenders had no prior convictions for environmental offences, and put to the Court that Foxman had evidenced actual remorse in one of his affidavits of 23 October 2015.
2. The submission about "no convictions" was withdrawn at the hearing (T12.11.15, p17, L12 - p18, L7), and the Prosecutor tendered a certificate of conviction in respect of BBR (Exhibit P1). That matter had been the subject of some evidence at the trial (TJ [46]). The relevant breaches of an environmental protection licence occurred on 28 August and 26 November 2008, and were dealt with by fines totalling $8900, and costs orders totalling $7576, at Burwood Court on 18 May 2010, after BBR pleaded guilty.
3. Nonetheless, as Mr Isaacs submitted in respect of Foxman himself (T13.11.15, p86, LL27 - 28), "he's got no previous convictions for similar or related environmental offences". However, in terms of Foxman's own record outside the environmental field, the Prosecutor refrained (T12.11.15, p17, LL1 - 10) from tendering his "criminal history", once Mr Isaacs had indicated he would not submit that Foxman was "of prior good character".
4. I made some positive remarks about Foxman in my trial judgment ([61] - [73]), and Mr Isaacs tendered several "references" (Exhibit F2) in his favour, including an award from a Minister in the Israeli Government in recognition of his "outstanding voluntary activities in the field of environment in Israel".
5. Several of the letters addressed to the Court by prominent people, including the Chief Rabbi/Minister from the Central Synagogue in Bondi Junction, make reference to those activities, and to his activities in relevant industry organizations.
6. Mr Albert Dadon AM, Executive Chairman of "Ubertas" Funds Management Group, says: At first impression you may think that Mr Foxman may be rough on the edges, but don't be mistaken, this is a man that is very dedicated and has proved that he is rigorous about his undertakings and responsibilities. My personal experience of Mr Foxman is that he is a trustworthy individual who deserves the benefit of the doubt.
7. In terms of remorse, I acknowledge that, after a hard fight, Foxman has accepted my adverse findings against him and his companies. To put his position fairly, I note that he relevantly deposes: 6 I accept the Judgment and I deeply regret my actions and any actual or potential environmental harm my actions may have caused. 7. In response to the findings of fact by the Court in the Judgment, l wish to express that it was never my intention to cause any environmental harm as a result of my actions. Nor was it my intention that the transportation or the disposal of this material on the relevant property was done for the purpose of obtaining a profit. 8 When I transported this material in a manner in which the Court has found breached relevant laws, I wish to make it clear that I still made all possible attempts to use this material in an environmentally responsible manner. Practically, this involved using the material as road base. I was also acting on the honest belief that I held at that time that it was permissible to use the material for this purpose under the environmental regulations. 9 It is also my position that I exercised care and due diligence, as I understood it, when transporting and disposing of this material, with the aim of minimising any risk of contamination. I did that by employing a site management plan at the Banskmeadow site for the purpose of detecting asbestos and other containments. Specifically, these procedures included: a thorough visual inspection of the truck load, firstly from a weigh bridge, followed by a second, closer inspection; a refusal on my part to accept loads where I suspected there was a risk of contamination; and also a further closer inspection once the material had been delivered and spread at the facility. 10 It was my honest belief held at the time that I was attempting to do the right thing in the processes l employed. This was particularly so given my belief that the exemptions for recycled material were so restrictive that they ran counter to the express policy of the recycling of construction waste, which should be encouraged within appropriate environmental safeguards. It was also my honest belief held at that time and at all times I (sic) that I was complying with Environmental Protection Authority requirements when the materials were being transported and also when they were being used on the land. However, I accept that the Court has found against me on those points, and I sincerely regret and apologise for any environmental harm my actions may have caused as a result of my mistaken beliefs I held at the relevant time. 11 l wish to emphasise that the regulations in this area are particularly technical and complex, often making it difficult to understand obligations in this area when attempting to comply with the relevant laws. I ask the Court also take into consideration the significant regulatory burden of complying with all legislative instruments which govern waste and asbestos, and the significant practical difficulties in complying with these extremely technical regulations. 12 I accept the Court's Judgment. I have deep remorse for any actual or potential environmental harm these actions may have caused.

Financial Capacity

1. In terms of the financial capacity of Foxman and his companies to pay a substantial penalty, the Prosecutor does not accept the alleged impecuniosity of Foxman and FEDS, as asserted by Foxman in one of his affidavits of 23 October 2015, and in his oral evidence.
2. In his relevant affidavit, to which he exhibited a folder of financial materials (Exhibit F1), he deposed: 4 From the enquiries and searches which I have conducted and caused to be conducted I have formed the opinion that l have no net assets now or as at 28 October 2015 and I am unlikely to have any net assets in the future. 5 I refer to the Statement of Assets & Liabilities of Phillip Foxman and confirm that in my opinion my net liabilities on a rounded basis range between $11.4 million and $16.4 million.
3. I, therefore, found his oral evidence regarding his financial affairs and those of his family and various companies quite unsatisfactory and unconvincing. The fact is that he moved to a dramatic restructure of his affairs following Pepper J's orders.
4. He has apparently paid his own costs of the Class 4 proceedings (T12.11.15, p42, LL10 - 12), but has undertaken none of the ordered remediation work, and has not yet paid Council's costs.
5. I, therefore, find myself in a similar position to that faced by the learned Chief Judge in Bankstown City Council v Hanna (2014) LGERA 39; [2014] NSWLEC 152, where his Honour said (at [181]): I consider that the evidence of Mr Hanna's financial circumstances available to the Court is "largely indefinite": see Environment Protection Authority v Capdate Pty Ltd [("Capdate")] (1993) 78 LGERA 349 at 353. The evidence is insufficient to justify reducing the fines on account of his financial circumstances. It is also relevant, in the exercise of the discretion under s 6 of the Fines Act, that his indebtedness and liability to pay to the State the accumulated fines and other penalties is self-inflicted. It is a product of Mr Hanna's persistent and habitual offending and his continued failure to pay the vast majority of the fines and other penalties imposed for this offending. It is not just or appropriate for Mr Hanna to benefit, by way of a reduction in the amount of the fines that would otherwise be appropriate to impose, from this self-inflicted financial stress.
6. His Honour was referring (in [181]) to the following remarks made by Stein J in Capdate (at 353, dealing with the law as it then stood): Mr Lidden submits that in these circumstances any substantial penalties imposed could not be met and the Court ought therefore impose only nominal fines. The prosecutor, Mr Cowan, submits that while the means of a defendant to pay a substantial fine may be relevant, the offences are very serious and the circumstances make it inappropriate to impose nominal fines. He also notes that the Court can allow time to pay under s 54(1) of the Land and Environment Court Act 1979 (NSW) and the enforcement of the fines will be a matter for the Environmental Planning Authority. I accept that issues such as impecuniosity and means are relevant to the sentencing discretion notwithstanding the absence of a statutory direction such as contained in s 80A of the Justices Act 1902 (NSW): see R v Rahme (1989) 43 A Crim R 81. Whether a person or company's financial circumstances will sound in mitigation of penalty however will very much depend on the particular facts and circumstances. One matter to keep in mind is that failure to pay a fine does not lead to imprisonment in default: see s 53 of the Land and Environment Court Act. ... So far as the company is concerned all I know is that it is not longer trading. It is difficult to see how its largely indefinite financial circumstances should mitigate the fine to any appreciable extent. It is not in receivership and could possibly trade again. In any event, the means of the company may not have the same impact on third parties as with an individual defendant. Regarding Mr Phillips, the situation is less clear. It is not as if a substantial fine will deprive him of a home for himself and his family. This has already been disposed of in order to pay the company's debts, according to Mr Phillips. The dearth of real or accurate knowledge of Mr Phillips' financial situation leads me to conclude that his financial circumstances should not play a (sic) overly significant part in mitigation of penalty. Indeed, no financial information was provided by the defendant other than in answer to my questions. Additionally, I am uncertain about the accuracy and reliability of the sketchy information provided by Mr Phillips. ...

Deterrence

1. Section 3A ([44] above) dictates that sentences must "deter the offender and other persons".
2. Clearly those in the waste/recycling industry must be deterred from behaving as these defendants have: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357, at 359 and 367.
3. Foxman himself is an energetic type, and not yet 60 years of age. He remains active in relevant industry associations, and describes himself as a "contractor". Although he wants to cultivate the appearance of being in a parlous financial position, when all his liabilities are considered, I am not convinced that he is without means, so his prospects of seeking to return to the waste/recycling industry cannot be discounted.
4. I have concluded, therefore, that there ought be a significant element of specific, as well as general, deterrence in the penalty package at which I arrive in this case.

Totality, and Double Punishment

1. In formulating the appropriate penalty package(s) the Court must abide by the "totality" principle, and also avoid "double punishment".
2. In respect of applying the "totality" principle in the present circumstance, I have had regard to R v Holder R v Johnston [1983] 3 NSWLR 245, at 260; R v Sgroi (1989) 40 A Crim R 197, at 203, Camilleri, at 704; EPA v Barnes [2006] NSWCCA 246, at [43] - [46], and Environment Protection Authority v Wattke, Environment Protection Authority v Geerdink [2010] NSWLEC 24, at [98].
3. As noted by Pepper J in Environment Protection Authority v Geoff Robinson Pty Ltd, Environment Protection Authority v Robinson [2011] NSWLEC 14, at [128]: ... care must be taken to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the individual offenders' conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence.
4. Issues of "double punishment" frequently arise in cases of one-person companies charged along with their dominant mind.
5. In the present case, the maximum penalty for each of the three offences committed by corporations is four times the maximum penalty for each of the other three committed by the key individual in them ([31] above).
6. However, BBR is in liquidation, placed there voluntarily by Foxman, and FEDS would, on the rather inadequate evidence before me, appear to have negative realisable assets.
7. These circumstances result from a restructuring of the Foxman family and business affairs, when confronted by the twin burdens of legal costs in both the civil and criminal matters, and the cost of carrying out Pepper J's orders, and any I make.
8. In Leichhardt Council v Geitonia Pty Ltd (No 7) ("Geitonia") [2015] NSWLEC 79 - a decision unaffected by the recent Court of Criminal Appeal decision in Geitonia Pty Ltd v Inner West Council; Gertos v Inner West Council [2016] NSWCCA 186 - Biscoe J faced a situation which he described thus (at [52]): ... Where an individual offender and the company that he owns are each being sentenced for the same offence, the fines to be imposed should be such as to avoid double punishment of the individual arising from the diminution in the individual's valuable interest in the company to the extent of the fine imposed on the company.

Conclusion

1. The major criminality in this case is on the part of Foxman himself. He was deeply, and personally, involved in every aspect of the behaviour proven against the two companies he dominated, as well as himself.
2. There are some aggravating factors, only late expressions of remorse put in mitigation, and no satisfactory basis for any discount on grounds of financial capacity.
3. Hence, apart from the need to apply the totality principle, I am not persuaded to move upwards or downwards from the penalties arrived at after the process of "instinctive synthesis".
4. The financial penalty to be imposed has to be proportionate to the proven criminality, viewed as a whole, but the major burden should fall on Foxman, as the author and chief manager of the scheme.
5. There is little utility in imposing heavy penalties on BBR for its part in the two transportation offences, but it should bear some burden despite its subsequent liquidation. Mr English submitted (T13.11.15, p92, LL25 - 46): Geitonia. ...tempers that thought that there should be some relaxation in the penalty that your Honour would otherwise impose on BBR. Having said that, I would not necessarily say that it would be improper for your Honour to consider imposing a lesser penalty on BBR because of its financial predicament, and it would be, in my respectful submission, if your Honour wanted to do that, that Mr Foxman's fine as director of the company would become heavier. ... If your Honour was to discount the fine applicable to BBR because of its position in liquidation, especially given the circumstances Mr Foxman put it into liquidation at a time when it owed considerable money to the tax department, your Honour would have no hesitation in readjusting the fine that would otherwise [sic] applicable to Mr Foxman, so he ... bears a heavier burden, whereas BBR might receive something less. and, later (p93, LL44 - 50): ... if your Honour were to adjust the penalty to be imposed on BBR as a consequence of its financial position in liquidation, then in order to ensure that the full penalty that was imposed was proportionate to the offence, your Honour would need, in my respectful submission, to increase Mr Foxman's penalty to ensure that there is still one whole penalty that reflects the objective seriousness and the subjective considerations of the offenders.

Orders

1. Having already found all three defendants guilty of the offences with which they were charged, I now make the following orders:

In Matter 2016/158950 (formerly 51244 of 2011) 1. The defendant Foxman Environmental Development Services Pty Ltd is convicted of the offence that, as the owner of the land comprised in Lot 733 DP 811421 at or near The Oaks, NSW, and known as "Foxman's Valley" (hereafter "the land"), it used that land as a waste facility without lawful authority, in contravention of s 144(1) of the Protection of the Environment Operations Act 1997 (hereafter the "POEO Act"), from about 1 May 2009 to about 30 September 2013. 2. The defendant is fined $100,000.

In Matter 2016/159008 (formerly 51251 of 2011) 1. The defendant Botany Building Recyclers Pty Ltd is convicted of the offence that it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act, between about 1 May 2009 to 30 September 2009 inclusive. 2. The defendant is fined $15,000.

In Matter 2016/159009 (formerly 51252 of 2011) 1. The defendant Botany Building Recyclers Pty Ltd is convicted of the offence that it caused waste to be transported to a place that could not lawfully be used as a waste facility, in contravention of s 143(1) of the POEO Act, between about 12 January 2010 to 22 April 2010 inclusive. 2. The defendant is fined $25,000.

In Matters 2016/159126 (formerly 51249 of 2011), 2016/159127 (formerly 51253 of 2011), and 2016/159128 (formerly 51254 of 2011) 1. By reason of s 169(1) of the POEO Act, the defendant Phillip Foxman, contractor, now of 298 Cobbity Road, Cobbity, NSW, is convicted of the following three offences: 1. that, between about 1 May 2009 to about 30 September 2013, he committed an offence in contravention of s 144(1) of the POEO Act; 2. that, between 1 May 2009 to 30 September 2009 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act; 3. that, between 12 January 2010 to 22 April 2010 inclusive, he committed an offence in contravention of s 143(1) of the POEO Act. 1. The defendant Foxman is fined for the three offences in par (7) above, respectively: 1. $100,000 2. $75,000 3. $75,000

In Matters 2016/158950 (formerly 51244 of 2011), 2016/159008 (formerly 51251 of 2011), 2016/159009 (formerly 51252 of 2011), 2016/159126 (formerly 51249 of 2011), 2016/159127 (formerly 51253 of 2011), and 2016/159128 (formerly 51254 of 2011) 1. Pursuant to s 257B of the Criminal Procedure Act 1986, the three defendants are ordered, jointly and severally, to pay the Prosecutor's legal costs, as agreed or assessed. 2. Pursuant to s 248(1) of the POEO Act, the three defendants are ordered, jointly and severally, to pay to the Prosecutor an amount of $4,646, being the costs and expenses it reasonably incurred for laboratory analysis of samples during its investigation of these offences. 3. Pursuant to s. 250(1) (a) of the POEO Act, the Offenders: 1. At their expense, within 28 days of the date of this Order, must cause a notice, in the form of "ANNEXURE A" to these orders, to be placed within the first 5 pages of the following publications at a minimum size of 10 cm x 18 cm: 1. The Sydney Morning Herald; 2. Inside Waste Magazine. 1. Within 35 days of the date of this Order, the Offenders must provide to the Prosecutor a complete copy of the page of the publications in which the notice appears. 1. Within 90 days of the date of this order, the Offenders, Foxman Environmental Development Services Pty Ltd and Phillip Foxman, must remove, or procure the removal of, the fill material from the land as identified in the Lean & Hayward survey dated 26 May 2010, being "ANNEXURE B" to these orders, and dispose of the waste at a waste facility or facilities licensed under the POEO Act to accept such waste. 2. Within 118 days of the date of this order, the Prosecutor's expert shall file an affidavit with the Court setting out the Offenders' compliance or otherwise with order (12) above. 3. Within 90 days of the date of these orders, Foxman Environmental Development Services Pty Ltd and / or Phillip Foxman are to provide receipts to the Prosecutor evidencing the lawful disposal of the waste the subject of the proceedings at a facility or facilities licensed under the POEO Act to accept such waste. 4. Exhibits are returned, other than Exhibit P3.

ANNEXURE A (10.1 KB, pdf) ANNEXURE B (27.7 KB, pdf) ANNEXURE B (27.7 KB, pdf)

Amendments 16 September 2016 - Typographical error in paragraph 127(a) "$100,000" replaces "$100,00" 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: 16 September 2016