Environment Protection Authority v Hines

LEGAL REPRESENTATIVES: DEFENDANT Mr P. Clay (Barrister)

SOLICITORS McIntosh McPhillamy & Co Solicitors

JUDGMENT: IN THE LAND AND ENVIRONMENT COURT OF NEW SOUTH WALES 50086 of 2003 50087 of 2003

13 February 2004 Environment Protection Authority Prosecutor v Kevin Hines Defendant Judgment 1 The defendant is charged with two offences and the proceedings in each matter have been heard concurrently. 2 The first charge alleges that between 28 September 2001 and continuing until 1 November 2002 the defendant committed an offence against s 48(2) of the Protection of the Environment Operations Act 1997 ("the Act") in that he was the occupier of premises at which a scheduled activity was carried on and at that time he was not the holder of a licence which authorised that activity to be carried on in those premises. 3 The second charge alleges that on or about 20 August 2002 near Gumble in New South Wales he committed an offence by polluting waters contrary to s 120(1) of the Act. The waters said to be polluted are identified in the particulars as Grail Creek. The pollutant is defined as effluent containing nitrogen and phosphorous and compounds thereof. The charge alleges that the defendant was the occupier of premises at which the pollutant was placed in a position where it was likely to be washed or percolate into waters. The premises are defined as the farm known as "Bywong" on the Manildra-Cumnock Road near Gumble. 4 Each offence carries with it a penalty in respect of an individual of $120,000. The defendant has pleaded guilty to each charge and accordingly the Court is required to determine the appropriate penalty. 5 The agreed facts establish that the defendant is an owner of the property known as "Bywong" (hereafter referred to as "the site") which is located at the junction of Grail Creek and Little River near Gumble and that upon such land the defendant conducted a piggery. Prior to 1997 the defendant held a licence for the piggery operations. When the Act came into operation the licence held under the previous legislation was surrendered. The defendant did not require a licence under the Act provided the number of pigs kept at the piggery was less than two thousand. 6 Pigs were fattened in the piggery although the defendant was not personally involved in its operations since the property was operated by employees. The defendant did not live at the site. 7 On 6 August 2001 representatives of the Carbonne Shire Council ("the council") and of the Environment Protection Authority ("EPA") attended the site for a meeting. It had come to the attention of the council that new buildings were being erected for which no development consent had been obtained. At the meeting it became apparent that the operations of the piggery were being expanded into new eco-type shelters. As a consequence a licence was required under the Act for the increased number of pigs. 8 A letter was sent by the council on 17 August 2001 advising Mr Hines of his obligations to submit a development application. On 20 August 2001 clean up notice number 1010707 was issued by the EPA. At that meeting in August the defendant was informed of the necessity to obtain a licence and of his responsibilities under the Act. The evidence establishes that the defendant complied with the clean up notice. 9 On 6 August 2002 the council received a letter of complaint concerning the water quality in Grail Creek. As a result an inspection took place on 12 August 2002 and it was discovered that the source of the poor water quality in the creek was emanating from the piggery. Three new eco-sheds had been built and one older style piggery building remained on the site. It was found that effluent from one of the new sheds was by-passing the retention pond and flowing through a paddock to Grail Creek. It was also found that the effluent pond was full of residual solids and that the effluent pond had less than 10 per cent capacity for effluent run-off. There was evidence of overtopping of the effluent pond and that a second effluent pond, which served two of the new sheds was overflowing. 10 The inspection revealed that an irrigation system had failed and that the effluent drains from all the piggery sheds were full of residual solids. Thirty carcasses in various states of decomposition were lying on the premises uncovered and unburied. 11 On 19 August 2002 a written clean up notice was issued following a previous oral notice and on 20 September, 2002 a notice of preventive action was issued under s 96 of the Act. The defendant acknowledges that he did not hold the relevant licence during that period. 12 With respect to the charge relating to s 120(1) of the Act the offence results from effluent overtopping the dams. The evidence establishes that the effluent may not have actually reached Grail Creek but it was placed in a position where it was likely to do so. Ammonia is present in the effluent which crystallised into a salt form which converts to nitrites. If washed into the creek they become highly soluble. Samples were taken upstream and downstream which confirmed pollution of the waterway. 13 The prosecutor contends that because no licence was held, no proper controls were in place. The prosecutor submits that these offences are serious, and that the water quality in the creek was unlikely to have been impaired if a licence had been held. With respect to the charge relating to pollution the prosecutor says that there was a significant but not substantial impairment of the water quality. 14 The statement of agreed facts describes the environmental effects of the consequence of the water pollution. At para 45 Ms Julie Currey of the EPA states: The concentrations of BOD and nutrients in the effluent discharge coming out of shed 3 on the "Bywong" piggery property were orders of magnitude higher than the ANZECC guidelines or indicative values for the protection of aquatic ecosystems and therefore had the potential to adversely affect the environment of the receiving waters of Grail Creek.

The concentrations of BOD and nutrients in Grail Creek downstream of the "Bywong" piggery were also well in excess of the ANZECC guidelines or indicative values for the protection of aquatic ecosystems, and well in excess of the concentration upstream of the piggery.

At the time I inspected the property the effluent discharge from shed 3 was not directly entering Grail Creek. The discharge was soaked into the ground a short distance downhill. However, in my opinion, the elevated concentrations of BOD and nutrients downstream of "Bywong" piggery would more than likely have resulted largely from the effluent discharge coming out of shed 3. I draw this conclusion based on the following. Firstly, there was a distinct effluent path of dead and yellowing grass leading from shed 3 down to the receiving waters of Grail Creek. The yellowing grass indicates ammonia toxicity. Secondly, upon inspection of the area I found no other discharges, incoming water courses or other possible sources of pollutants entering Grail Creek between the upstream and downstream sites that could have cause the elevated BOD and nutrient concentrations. Thirdly, the visible effluent path was not connected to a retaining pond of any kind, and therefore there were no obvious measure being taken to prevent the effluent reaching the receiving waters of Grail Creek.

Further, in my opinion, the discharge posed a significant risk of environmental harm. The effluent soaking into the ground contained high concentrations of ammonia. In soil, this ammonia would have been converted to nitrate, a more soluble and mobile form. Any subsequent rainfall would have caused immediate runoff and subsurface flow into the Grail Creek. Particularly as the discharge was in very close proximity of the receiving waters (approximately 100m). This is supported by the presence of distinct effluent paths of dead and yellowing grass leading from shed 3 down to the receiving waters of Grail Creek. In my opinion, in wet weather, even without any further surface discharge, the close proximity of the observed discharge to Grail Creek would have caused subsurface flow that would transfer these nitrates to the receiving waters within only a few days.

In my opinion, the extremely high concentrations of BOD and nutrients found in the effluent being discharged from shed 3 had the potential to cause environmental harm to aquatic flora and fauna of the receiving waterways. The seriousness of the environmental effect from this discharge would be proportional to the quantity and duration of the discharge. In the short term, the high levels of ammonia could prove harmful to the aquatic ecosystem, with the high ammonia concentrations reported possibly toxic to fish. In the longer term, the nutrients could encourage the growth of nuisance algae and macrophytes.

At para 48 of the statement of agreed facts Mr Sunderam Ramaswamy of the EPA concludes: The EPA Analytical and Environmental Chemistry Laboratory results for the samples collected in August 2002 suggest there is a possible impairment to water bodies adjacent to the Bywong piggery. However, this was not confirmed from the samples taken in September 2002.

The Nitrate/Nitrite concentration found in Grail Creek in September sample will be of concern if major portion of Nitrate/Nitrite is present as nitrite

Phosphorus [in samples taken in September 2002], both total and free and reactive, were within acceptable limits.

E.coli and coliform counts in downstream of Grail Creek were slightly above the acceptable limit. This may be of concern if the counts persists or increases with time. This may need further monitoring.

Ausrivas analysis of the macroinvertebrate samples suggests that there is significant but not severe impairment in the downstream of Grail Creek and Little River. 15 The defendant has sworn an affidavit dated 11 February 2004. It establishes that Bywong was purchased by him and his wife in 1977. A piggery then operated on the property. The same management of the property continued thereafter for approximately ten years. However, it became financially unviable and the defendant needed to alter production from breeding to fattening. As a result it was decided to install the new eco-shelters. These were constructed between 14 November 2000 and 13 November 2001. From 1998 the defendant engaged the services of a manager who proved to be unsatisfactory. Another manager was engaged and he also appears to have been unreliable. 16 Following the visit of the officers of the council and the EPA in August 2001 the defendant retained an expert, namely, K Richardson and Associates Pty Limited, to prepare a development application which was to be lodged with the council to initiate the process to obtain a licence required by the Act. The defendant was informed by that company that the development application would be ready for lodgement by February 2002. In fact it was delayed and not received by the defendant until 11 April 2002. Simultaneously it was lodged with the council. 17 Between April 2002 and August 2002 there is no evidence of any action taken either by the council or by the defendant in relation to obtaining the licence. However, in July 2002 the manager then in charge of the piggery left the site for a week without notice. During this period the retention ponds overflowed. When further inspection took place it was discovered that the state of the piggery was not compliant with any of the requirements in relation to the provision of retention ponds and other environmental matters. No licence had been issued and by December 2002 the defendant decided to close the piggery. Its operations ceased during that month. 18 The defendant said that when complying with the notices issued by the EPA subsequent to the September 2001 visit he had spent approximately $50,000 to $60,000 in installing new dams and he had borrowed $160,000 to increase the size of the piggery. Accordingly, the venture was highly unsuccessful. The defendant has placed evidence before the Court of his antecedents and I shall deal with them under the considerations which are required pursuant to s 241 of the Act. 19 Section 241 of the Act requires the Court to take into consideration various matters before imposing penalty. Section 241(1)(a) requires the Court to consider the extent of the harm caused or likely to be caused to the environment by the commission of the offence. 20 With respect to the licensing offence there is no direct harm caused or was likely to be caused except for one matter. Section 48(2) of the Act required the person who is the occupier of any premises at which a scheduled activity is carried on to hold a relevant licence. The operation of a piggery accommodating more than two thousand pigs is a livestock intensive industry requiring a licence. Because a licence was not held the whole of the operations were uncontrolled and there was certainly the likelihood that there could be harm caused to the environment by the commission of the offence. 21 With respect to the s 120(1) charge there is evidence of significant but not severe impairment downstream of Grail Creek and Little River. Accordingly, the Court is satisfied that a likelihood of harm being caused to the environment is established. Secondly, there was actual harm caused to the waterway. 22 Section 241(1)(b) requires the Court to consider the practical measures that may be taken to prevent, control, abate or mitigate that harm. The defendant had within his power the ability to take steps to both prevent, control, abate and mitigate that harm. Although the defendant was relying upon employees to undertake the conduct of the piggery it lay within the defendant's control to ensure the piggery was in fact being operated in accordance with the requirements of the Act. 23 Section 241(1)(c) requires the Court to consider 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. In this case the failure to observe the controls which would have been imposed had a licence existed and the failure to take appropriate measures to protect the waterway from pollution were obvious. 24 Section 241(1)(d) requires the Court to consider the extent to which the person who committed the offence had control over the causes that gave rise to the offence. The Court is satisfied with respect to this matter that the defendant had complete control, albeit in relation to the offence in relation to s 120(1) he was relying upon an employee. However, that employee had apparently proved to be unreliable and it is apparent that there was no recognition by the defendant of the need to observe the requirements of the Act. 25 Section 241(1)(e) does not apply. 26 The Court must take into account the provisions of the Crimes (Sentencing Procedure) Act 1999 ("the Sentencing Procedure Act"). The relevant section is s 21A. Within that section the Court is required to consider any aggravating factors as provided by s 21A(2). The Court is satisfied that there are no aggravating factors. 27 The Court must also consider the requirements of s 21A(3) of the Sentencing Procedure Act and the numerous subsections within that section. Many of those are not relevant but the Court is required to have regard to the matters in relation to subsection (a) which relates to harm. This has already been considered. 28 Whether the offender had any previous record is also to be considered pursuant to s 21A(3)(e) of the Sentencing Procedure Act. It is acknowledged that the defendant has no convictions. 29 The Court must consider the character of the defendant pursuant to s 21A(3)(f) of the Sentencing Procedure Act. The affidavit of the defendant discloses that he has been a totally responsible citizen and has undertaken substantial work for charities over many years in a voluntary capacity. The Court accepts that he is a person of good character. 30 The Court must consider s 21A(3)(g) of the Sentencing Procedure Act, namely, whether the offender is likely to re-offend. The Court is satisfied that there is no such prospect. Pursuant to s 21A(3)(i) the offender must show remorse for the offence by making reparation for any injury, loss or damage. The remorse for the offence has been demonstrated. There is no offer to reinstate any injury or harm to the creek but that matter will be considered hereunder. 31 The Court must consider under s 21A(3)(m) of the Sentencing Procedure Act any assistance to the law enforcement authorities. The Court is satisfied that the defendant co-operated on each occasion with the officers of council and the EPA.

Mitigation of Penalty 32 The Court notes that the defendant has pleaded guilty at an early stage and in accordance with the principles referred to in Cameron v The Queen (2002) 209 CLR 339 and R v Thomson; R v Houlton (2000) 49 NSWLR 383 the defendant is entitled to a reduction in the penalty. 33 There are other considerations which the Court must take into account as established by authority. In Axer Pty Ltd v Environment Protection Authority (2001) 113 LGERA 357 the Court observed the need for businesses to be conducted in a manner which complies with the law. There has been a clear failing to do that in this instance. Further, in Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 the Court of Criminal Appeal made similar observations concerning the need to operate businesses as observed in Axer. 34 It has been suggested by counsel for the defendant that this is not a case in which individual deterrence is required as an element of any penalty. The Court is satisfied that the defendant should not have any element of individual deterrence as part of the penalty. However, the recognition that events may require some general deterrence has been referred to in Axer and more recently in Environmental Protection Authority v Coggins (2003) 126 LGERA 219. 35 The Court has also referred to the need for deterrence as considered in R v Jenkins [1999] NSWCCA 110. The gravity of the offence must also be considered. As was explained by the Court in Camilleri's, the seriousness of the offence as reflected by the penalties must be considered. The extent of the penalty itself can indicate the gravity of the offence. 36 There are various factors which the Court has taken into account. Firstly, with respect to the licensing offence under s 48(2) of the Act the Court notes that the process for the application for the licence was in train. The defendant had not ignored the responsibility to have a licence once the need for it was drawn to his attention. He was obviously relying upon experts to prepare the application. Secondly, the period during which the premises were unlicensed was a little over twelve months. Those factors have been taken into consideration. 37 The defendant did not act fast enough to ensure the licence process was carried out. The Court cannot speculate but inference could be drawn from the fact that the piggery was closed down some months later that perhaps the defendant had considered the cost and procedures necessary to obtain the necessary licence and to comply with its conditions would outweigh the continued benefit of conducting the business. 38 With respect to the offence against s 120(1) of the Act, there is no evidence of any loss to any species of plant or animal loss. It is not a case, for example, that a substantial amount of marine life or plant life has been destroyed. 39 Accordingly, having taken all matter into consideration, the Court is satisfied that the gravity of each offence falls in the low category. The Court is also mindful that the prosecutor is seeking an order for payment of its costs in the amount of $25,000 for both charges. Whether that amount will be agreed remains unresolved because the assessment has only been made this morning and the defendant has not had adequate time to consider such quantification. However, the costs and the fact of the public prosecution are each matters which the Court takes into consideration when it assesses penalties. 40 The Court considers that of the two offences the charge that the defendant failed to have the requisite licence under s 48(2) of the Act is the more serious because the business was effectively uncontrolled. The Court considers that the appropriate penalty for that charge is $20,000. Because the plea of guilty was entered early the fine is reduced to $16,000. 41 With respect to the charge relating to s 120(1) the Court considers that the appropriate penalty is the sum of $15,000. Because of the early plea of guilty that amount will be reduced to $13,000. 42 In addition because the two charges are related the defendant is entitled to the benefit of the principle of totality as explained in R v Holder; R v Johnston (1983) 3 NSWLR 245. A further $2,000 will be deducted from each of the penalties. Accordingly, the charge under s 48(2) of the Act will be reduced to $14,000. The charge under s 120(1) of the Act will be reduced to $11,000. 43 The prosecutor has sought an order under s 250(1)(c) of the Act, that the defendant carry out a specified project for the restoration or enhancement of the environment in a public place or for the public benefit in lieu of any fine being paid to Consolidated Revenue. The prosecutor also seeks an order for the publication of the conditions as provided by s 250(1)(a) of the Act. The defendant does not oppose the first order but opposes the second order. 44 The Court considers that in lieu of the payment of a fine it is appropriate to make an order under s 250(1)(c) of the Act. Since the defendant had taken appropriate steps to seek the necessary licence and was personally unaware that his employee had left the premises in an unsatisfactory state the Court accepts that the offences were not committed deliberately. For that reason it considers that the publication of the offence is not warranted. By complying with the Court order to carry out a specified project to the value of the fine the defendant will be satisfying any public obligation arising out of the offences. Orders 45 The Court makes the following orders:-

1. ORDER that in proceedings No 500986 of 2003 the defendant is convicted as charged of the offence against s 48(2) of the Protection of the Environment Operations Act 1997 and in respect of such conviction a penalty of $14,000 is imposed;

2. ORDER that in proceedings No 50087 of 2003 the defendant is convicted of the charge against s 120(1) of the Protection of the Environment Operations Act 1997 and in respect of such conviction a penalty of $11,000 is imposed;

3. ORDER that in lieu of the payment of the fines of $14,000 in respect of charge No 50086 of 2003 and of $11,000 in respect of charge 50087 of 2003 the defendant is ordered to enter into an arrangement with the prosecutor within forty-five days for the purpose of the restoration and enhancement of Grail Creek and its tributaries;

4. ORDER that the defendant is ordered to pay the prosecutor's costs;

6. ORDER that liberty to apply in respect of the implementation of the arrangement referred to in Order no. 3.

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.