Environment Protection Authority v Greater Taree City Council [2014] NSWLEC 88 | Case summary

Discussion 23The very comprehensive SAF indicates a very large degree of common ground between the prosecutor and the defendant on virtually every issue of fact and law which the Court must consider in arriving at the appropriate penalty to impose on Council for this offence. 24In their respective submissions, both counsel re-stated the oft-repeated sentencing principles this Court applies, and then, on the question of "evenhandedness", took the Court through many cases involving breaches of s 120. 25I dealt at length with the relevant statutory provisions, sentencing principles, and influential authorities, in Newcastle Port Corporation v MS Magdalene Schiffahrtsgesellschaft MBH; Newcastle Port Corporation v Vazhnenko ("Magdalene") [2013] NSWLEC 210, especially at [117] - [160], and [269] - [278], and I will not repeat that analysis here. 26The Court must have regard to (a) the purposes of sentencing set out in s 3A of the CSP Act, relevantly, in cases like this, punishment, deterrence, denunciation, and a recognition of the harm done to the community; (b) various other sections of that Act to which I will soon refer; (c) the objects of the POEO Act (set out in s 3); and (d) the specific matters that s 241 of the POEO Act requires the sentencing court to consider. 27Offences arise when the objects of the POEO Act are undermined, and Parliament has both defined offences, and prescribed major penalties for them. 28The sentencing function requires an "instinctive synthesis" by the Court of the key objective and subjective factors of the particular case - see Pain J most recently in Chief Executive, Office of Environment and Heritage v Kyluk Pty Limited (No 4) [2014] NSWLEC 74, at [39] - [40]. I will return to those factors involved in this matter after I summarize what emerged from the hearing, and my view of the evidence. 29It would be otiose to repeat the contents of the SAF, the short oral expert evidence, and the arguments of counsel, but the key matters to note from them are: (i)that the defendant accepts full responsibility for the subject breach, which occurred in early April 2012 (Tpp 31 and 35); (ii)that the breach really involved a failure, or "serious yet inadvertent mistake" by a council employee or contractor (Tp36, L28 and Tp41, LL23 - 25), to repair the relevant leachate pipe in 2007 in a more "permanent" way (Tp31), followed by Council's failure to test the pipe regularly and otherwise adequately monitor the pumping-out of leachate from its waste facility; (iii)that both the law, and the defendant's EPL, which obliges compliance with s 120, recognize that leachate may be discharged, without resulting in an offence, as it "isn't so toxic that it requires containment" on all occasions (Tpp29, and 45 - 48); (iv)that the polluting substance was the leachate sourced in the facility from green and domestic waste, not industrial waste (such as toxic resin), or sewage, or sediment-laden water, and that such leachate, while "relatively benign" (subs par 17), contained potentially harmful concentrations of ammonia (a key indicator of leachate), but no harmful chemicals; (v)that the leak caused high levels of ammonia, which raised the alkalinity of the affected water "slightly", but the concentrations of ammonia "had returned to normal levels" by 17 May 2012, and environmental recovery was assisted by significant rainfall (Tp33); (vi)that there is no evidence that, of itself, and apart from some tannin staining, the leaking leachate harmed the non-wetland (Tp47) soil or vegetation, or killed any significant aquatic organisms (fish, crayfish etc, c.f. micro-invertebrates - Tp45), or that the affected watercourse sustained anything more than short-term toxic harm (Tp32), leaving no detectable residual impact (Tp34); (vii)that this case involved none of the aggravating factors, but several of the mitigating factors, nominated in s 21A of the CSP Act; (viii)that the defendant is entitled to rely on its exemplary record of no convictions over 40 years of operating the facility (s 21A(3)(e)); (ix)that the defendant is also to be commended for its prompt and expensive response to the incident, not only in terms of clean-up, and co-operation with the authorities (ss 21A(3)(m) and 22 of the CSP Act), but also in terms of measures taken since, to re-route the leachate line, organize training, improve the facility, and put "multiple layers of protection" in place, to minimize the likelihood of, and the degree or harm flowing from, future similar incidents (Tp37, and Ireland subs pars 36 - 40); (x)that the defendant is entitled to a discount (under ss 21A(3)(k) and 22 of the CSP Act) for entering its plea of guilty as soon as the prosecutor had filed its evidence and its statutory disclosure statement, and has otherwise demonstrated contrition and remorse (s 21A(3)(i) of the CSP Act), including by agreeing to orders under s 250 of the POEO Act, and to the payment of the prosecutor's legal costs and investigation expenses. 30The objective circumstances to bring into the "instinctive" synthesis in this case include the high maximum penalty ($1 million) against which to sentence; the degree of environmental harm caused; the foreseeability of the risk of that harm; the practical measures available to the Council to prevent the risk; and the control over the causes of the offence. 31The defendant's state of mind is not a concern in this case, and its degree of control over causes is clear from the EPL and the operating contract, and it is clear that Council has since done what it could and should have done all along, by way of practical measures to prevent the risk - ensure proper and more permanent joints, check the pipe and take samples regularly, put culvert/waterway gates in place, better train staff etc. 32There is little to add to the SAF and what I have already said on the modest and short-term or transient harm caused, which had no lasting residual impact (Ireland subs pars 16 and 30). The prosecutor accepts (subs par 14) that its expert agrees with the defendant's expert. I, therefore, accept Mr Ireland's submission (his subs par 48) that actual environmental harm in this case is "in the low range". 33On the question of foreseeability, I would adopt again, as I did in Environment Protection Authority v Chillana Pty Ltd ("Chillana") [2010] NSWLEC 255, what Preston J said in another ruptured pipe case, Environment Protection Authority v Baiada Poultry Pty Limited ("Baiada") [2008] NSWLEC 280; (2008) 163 LGERA 71 (at [28] - [31] - some emphasis added): 28 The risks that the effluent pipe might rupture and that effluent might pollute waters were reasonably foreseeable. Indeed, Baiada's own risk assessment ... (July 2006) identified the risk of rupture of the pipes in the plant's effluent system. 29 However, Baiada submitted that the extent or degree of foreseeability of this risk was low. Baiada's risk assessment had stated that "it is felt unlikely in the extreme that other pipes for the effluent system would be subject to rupture". Baiada submitted that the effluent pipe had been installed only a couple of years before the leak occurred; it had been installed by a licensed plumber who had previously been contracted by Baiada to perform plumbing work at the plant; Baiada had no knowledge that the weld of the T-fitting had not been done in accordance with the relevant Australian Standard; and the pipe was underground so that any defect was not discernible by usual observation without excavation and specific inspection. 30 These submissions may be accepted as far as they go. They are matters that show an absence of knowledge by Baiada about the integrity of the pipe. However, they do not show that Baiada took any steps to form a positive belief in the integrity of the pipe or took any steps to monitor the continued integrity of the pipe or took precautions to prevent pollution if the pipe lost integrity for any reason. 31 Experience also shows, time and again, that accidents happen. As Mahoney JA said in Axer Pty Limited v Environment Protection Authority (1993) 113 LGERA 357 at 359: "The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure that pollution does not occur. Experience has shown that it is not enough merely to take care: accidents will happen. The legislation envisages that in many cases care must be supplemented by positive precautions; business must be arranged and precautions taken so as to ensure that pollution will not occur." 34Relevant subjective circumstances to synthesise in this case include the lack of any deliberate or planned failure on Council's part; its exemplary environmental record; the unlikelihood of it re-offending; its timely plea; assistance to authorities; the remedial operational response of Council; and the various indicia of contrition and remorse. 35Of themselves, those subjective factors bring me to the conclusion that specific deterrence is not called for in this case. 36In terms of general deterrence, I would again adopt some sentencing remarks made by Preston J. In another case involving leachate, Environment Protection Authority v Ballina Shire Council ("Ballina") [2006] NSWLEC 289; (2006) 148 LGERA 278, his Honour said (at [65] - [68]): 65 The sentence of the Court is an important denunciation of the conduct of the defendant. 66 The sentence must also serve as a public deterrent. 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 a light punishment will be imposed: R v Rushby (1977) 1 NSWLR 594 at 597-598. 67 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 [85] and [93]. 68 The deterrent effect of a fine must send an important message that laws requiring the conservation of the environment and compliance with approvals to carry out activities that may harm the environment, must be complied with. Also, the community must be satisfied that, by the Court's sentence, the offender is given his just desserts. 37Those remarks indicate why it is difficult for the Court to grant a s 10 order to a public authority or a properly licensed waste operator. 38The causative failures of Council in this case could be described as "systemic", and in that regard some further remarks made by Preston J in Ballina (at [88] - [93]) are instructive: 88 In relation to ... systemic failure, it is evident ... that there was no proper system of management or control in place from the outset. Mr Truman, the responsible manager of the Department overseeing public infrastructure works of the Council including the landfill, gave evidence that, regrettably, he had not read the licence or understood the content of the conditions, including condition M6.2, before September 2004. He had not instructed any employees in relation to the licence or its condition. He had no knowledge whether the employees knew of the conditions of the licence. There was no system of reporting to Mr Truman as the responsible manager. He was unaware that there was any breach of the conditions of the licence until September 2004. 89 ... There is no evidence that the General Manager was aware of the conditions of the licence or was aware of any of the problems that were being encountered in the field in relation to the landfill. 90 The Council had implemented a system of audit, by Mr Sutherland, on a quarterly basis since 2002. This involved providing audit reports in writing and holding debriefings on those audit reports with Council staff. Unfortunately those reports and those briefing meetings did not involve either Mr Truman as the responsible manager or, seemingly, the General Manager until September 2004. 91 Mr Sutherland said that he had repeatedly requested the monitoring data, both in the quarterly audit reports and in the meetings with Council staff. Mr Sutherland said that he was told that it would be forthcoming, but it never was. Eventually in despair, Mr Sutherland wrote the letter dated 2 September 2004 directly to the Mayor to bring the matter to a head. 92 Mr Truman, as manager, did seem to be aware of the fact that infrastructure problems were being encountered on a regular basis, including in relation to the new leachate system. However, he failed to require the auditor to report to him about those matters and failed to see what would be the consequence of these infrastructure problems in relation to the relevant licence and operating conditions. 93 The extent of the systemic failure that is outlined by both Mr Truman and by Mr Mulder, as well as by Mr Sutherland, makes this an objectively serious matter. 39In this present case, less criticism can be levelled at the defendant Council and its systems. Very senior officers have been involved in the new systems Council has put in place, and personally attended the sentencing hearing to affirm Council's contrition, and its resolve to maintain its "proud environmental record" (Tp34, LL15 - 27). Council's efforts were conceded by the prosecutor, and I accept Mr Ireland's submission (subs par 58) that Council has "excellent corporate character". 40In particular reference to Council's contrition and remorse, I accept (1) Mr Jose's evidence (par 28), confirming it in "sincere and genuine terms" (Tp38, L15), and (2) Mr Ireland's written submissions (pars 20 and 60), which say: 20. The Defendant is contrite and has expressed its regret over the incident. The Defendant unreservedly apologises for the incident, which it does not regard as acceptable as a matter of its own high environmental management standards which it strives to implement as the local authority with its own role and interest in ensuring compliance with environmental law and good environmental outcomes. ... 60. The Defendant by its conduct has shown remorse for the offence by accepting responsibility for its actions. This is further evidenced by: (a) its proactive approach to responding to the incident; (b) the identification and implementation of measures to improve leachate management, including a whole new pipeline that avoids Dennes Creek entirely and heads North more directly to the sewer; (c) the express acceptance of responsibility for the incident and expression of regret for the incident; (d) its plea of guilty at the earliest opportunity; and (e) its agreement to pay the prosecutor's agreed costs. 41In terms, therefore, of reaching a conclusion on the "objective seriousness" of this offence, I find that it was an "isolated incident" (Tp40, L20), where a good citizen must accept responsibility for the consequences of inadequate repairs carried out on its behalf at an earlier time. The defendant accepts overriding responsibility to ensure that such overflows do not occur (Tp48, LL 28 - 30). 42No two cases of s 120 water pollution are exactly the same, and the Court was long troubled with endeavouring to formulate a range, scale, or gradation of "seriousness" - see Magdalene, at [233] - [249]. 43The prosecutor submits (par 26) that this offence is in the "low to mid" range of objective seriousness. Mr Ireland uses descriptions such as "the lowest end ... of the moderate range of seriousness" (subs par 1), "low to very low objective gravity" (par 52), "the lower end of the range of seriousness" (par 85), "very much ... in the lowest range" (Tp39, LL29 - 30), and "perhaps at most the mid range of the lower range" (Tp52, L29). 44Both counsel took a more empirical approach, taking the Court to a selection of relevant precedents - a handful in the case of the prosecutor, and more in the case of defence counsel. 45The prosecutor referred the Court to Baiada, Ballina, Chillana, Environment Protection Authority v George Weston Foods Ltd [2010] NSWLEC 120, and EPA v Cargill Australia Ltd [2007] NSWLEC 337. Mr Ireland referred to 19 cases. 46The maximum fine for a s120 offence was increased fourfold in 2006, but the cases discussed in submissions were under both the old and new regimes. I will not attempt to analyse all of the cases here, but I note that, in respect of his analysis of them, Mr Ireland put to the Court (Tp42, LL29 - 33) that: " ... in general where the Court dealing with an offence that's characterised as of higher than lower or moderate objective seriousness, it's only then it appears from a review of the cases in general that a penalty of more than $50,000 appears to be regarded as reasonable." and (at Tp49, LL9 - 11): " ... it's really only when one gets into the moderate objective serious category that on the present stream of authorities the Court is likely to go above the $50,000 level." 47Mr Ireland's oral submissions then went on to discuss Pepper J's decision Environment Protection Authority v Forestry Commission of New South Wales [2013] NSWLEC 101. Her Honour found "systemic failures" on the defendant's part, and concluded that backburning operations for which it was charged were of "low to moderate objective gravity" ([150] - [151]). Mr Ireland commented (Tp49, L23 - p50, L16): Quite distinct in my submission your Honour from the situation in the present case where there were many substantial systems in place from a contractual regime to ongoing environmental training that had been in place for a number of years. And what failed was a pipe that had been buried for some years after a temporary repair that was though to be sufficient at the time no doubt and which came apart a number of years after the initial repair. Now in retrospect it's accepted that it should have been repaired with a permanent clip rather than a temporary clip, but nevertheless this isn't a case where in my submission there have been identified what could be properly characterised as systemic failures leading to the commission of the offence. It's a regrettable and unfortunate incident in my submission and quite different from there being a thorough going system of inadequate environmental management and oversight. So that case is one also that I rely upon as indicative that the penalty of around $30,000 that in my submission is an appropriate one in this case, is well supported having regard to the stream of recent authorities. ... In the present case I'd made the submission that we are, at most, at the mid range of the lower end of objective seriousness or even at the lower end of the low range. It's a case where there was actual environmental harm so perhaps that gets the case out of the very lowest range but certainly what environmental harm there was, was confined to a particular kind of aquatic invertebrates upon life, if you like, and it was extremely transient and corrected very quickly by the next substantial period of rain that occurred immediately after the incident in question. In my submission having regard to the expert evidence in this case the facts of this case and the substantial evidence of council's good conduct both before and after the incident and council's responsiveness as a result of this incident and the fact that it has resulted in a significant fillip to council's already admirable efforts in the area of environmental management and active improvement of its environmental management in its local area. 48Mr Ireland went on (from Tp50, L11) to affirm his submissions that a penalty discounted to $30,000 would be "appropriate" in the present case, but that the Council would "contribute voluntarily up to the amount of $50,000" for the agreed project (in Exhibit P4), which (Tp50, LL23 - 33): " ... goes directly to the environmental area in question in terms of the improvement of water quality in the Manning River and the surrounding system is of importance in terms of indicating my client's approach to environmental mattes, its proactive approach to environmental matters and the fact that it approaches matters properly and responsibly as I have indicated based on other affidavit evidence. It's a concrete manifestation of that approach and the fact council is standing behind that project and willing to contribute in that way underscores in a practical way the material is Mr Jose's affidavit." 49The $30,000 "fine", net of deductions, and the $50,000 project contribution, of which it could be made part, were included in Mr Ireland's written submission (pars 88 - 92), filed and served prior to the hearing, but were not traversed by the prosecutor in its submissions. 50The authorities to which I have been referred would indicate to me a fine in the order of $50,000 for this offence, subject to discounts. 51I see no basis for any discount beyond a discount of 25% for the utilitarian value of the timely guilty plea - see R v Thomson; R v Houlton [2004] NSWCCA 309: (2000) 49 NSWLR 383, and my discussion of discounts in Magdalene at [122] - [128], and [269] - [278]. 52I will, therefore, order, in lieu of imposing a fine, a contribution of $37,500 to the agreed project. 53The orders of the Court will, therefore, be: (1)The defendant is found guilty, and is convicted, of the offence with which it was charged in the prosecutor's summons dated 10 April 2013. (2)By way of penalty, and in lieu of a fine, the defendant is ordered, pursuant to s 250(1)(c) of the Protection of the Environment Operations Act 1997, to allocate, within 28 days from the date of this order, an amount of $37,500 towards the project known as the "Taree Urban Waterways Riparian Regeneration Project", and described in Annexure "B" to this judgment, but the Court notes the defendant's undertaking, through its counsel to the Court, to increase that contribution to the amount of $50,000. (3)The defendant is further ordered, within 21 days from the date of this order, to place a notice in the Manning River Times, at a size of at least 10cm by 15cm, in the form of Annexure "A" to this judgment, pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997. (4)All future references to the works the subject of the environmental service order referred to in Order (3) hereof, and in the notice in Annexure "A", must be accompanied by the following passage: These bushland regeneration works are part of a penalty imposed on Greater Taree City Council by the Land and Environment Court after it was convicted of an offence of polluting waters, being Dennes Creek and a tributary of that creek, in April 2012. (5)The defendant is ordered to pay to the prosecutor, within 28 days, an amount of $57,492, in respect of professional legal costs and investigation costs and expenses. (6)Exhibits P2, P3 and C1 may be returned.

Environment Protection Authority v Greater Taree City Council

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