Environment Protection Authority v Metalcorp Recyclers Pty Limited

IN THE LAND AND MATTER No. 50009-15 of 2001 ENVIRONMENT COURT CORAM: Cowdroy J OF NEW SOUTH WALES DECISION DATE: 7/9/01

Environment Protection Authority Prosecutor v Metalcorp Recylers Pty Limited Defendant JUDGMENT

The defendant has pleaded not guilty to seven charges brought against it, each of which allege that it committed an offence against s 64(1) of the Protection of the Environment Operations Act 1997 ("the Act") by contravening a condition of an environment protection licence. The defendant is the holder of licence 000872 ("the licence"). Condition L65 of the licence provides:- Offensive noise resulting from explosions on the premises is not to be emitted from the premises at any time. "Offensive noise" means any noise that, by reason of its level, nature, volume, intensity or at the time at which it is made, is likely to: i. be harmful to; or ii. to interfere unreasonably with the comfort or repose of; any person outside the premises who is not associated with the management or operation of the premises.

The offences were alleged to have occurred on 28 April 2000; 23 May 2000; 31 May 2000 (two charges); 14 July 2000; 7 September 2000 and 8 September 2000. Each offence is alleged to have occurred at Riverside Road, Chipping Norton ("the site").

There is no dispute concerning the factual circumstances of each alleged offence. The business of metal recycling has been conducted at the site for approximately 30 years and the defendant has conducted the operations since approximately 1996. The process involves the delivery to the site of scrap metal which is unloaded in the presence of approximately four inspectors who are employed by the defendant. When the material is unloaded, a crane picks up the scrap and then drops it in small quantities so that its content can be seen by the inspectors. Objects which are likely to be hazardous or explosive are removed. Once inspected the scrap is loaded by the same crane onto a conveyor for crushing.

Worldwide there are approximately 680 similar recycling or shredding plants, ten of which are in Australia, and three of which are in New South Wales. Mr Stephen Mark Durrington, an Environment Protection Officer, testified that within his area of control, two recycling plants operated and explosions had occurred at both plants. The evidence establishes that explosions are a common product of the recycling operations.

Mr Vincent Konrad Chaplin, the Group Manager for Metal Corp Limited, of which the defendant is a subsidiary, provided evidence of the operations of the company. He said that in the year 2000 nearly 240,000 tonnes of scrap were received for recycling at the premises which included 40,000 automobiles. The plant operates 6 days per week and an average of 831 tonnes of scrap and 139 automobiles are received per day at the premises.

Mr Chaplin said that explosions can occur from fuel, fuel tanks, LPG cylinders, gas barbeque bottles, propane cylinders, modified nitro-burning race tanks and long range fuel tanks ("explosive material"). He said a cup full of fuel or even a cigarette lighter would be sufficient to initiate an explosion which can in turn trigger a much larger explosion caused by the build-up of dust within the crusher. Such explosions are accidental, unpredictable, unplanned, and according to the defendant, inevitable. Explosive material such as gas cylinders are occasionally deliberately concealed in the scrap metal as a ready means of disposal. If such items do not come to the attention of the inspectors they are likely to be the cause of explosions within the crushing plant. The explosions cause no damage but the noise may breach the licence conditions.

To minimise such explosions the company engaged inspectors to search for and remove the explosive material. In the year ending 30 June 2000, thirty explosions were recorded and in this period 1,742 gas bottles and other explosive items had been extracted from the scrap metal to be recycled. Fuel tanks in motor cars were either spiked or removed from approximately 40,000 motor vehicles. Mr Chaplin said that the inspectors search in all cavities of motor vehicles and in other containers such as refrigerators for gas cylinders.

In 1998 a bonus incentive was devised by the defendant with the object of providing an incentive to the employees to be vigilant in their search for explosive material. The bonus system costs the company approximately $50,000 per year. The bonus system has been revised and signs erected at the premises to remind employees of the explosion-free days. Signs have also been erected at the front of the premises that such explosive material will not be accepted. As a further measure to reduce explosions the defendant is diverting potentially hazardous material for recycling to its plant at Hexham.

The defendant submits that it is entitled to the benefit of a defence to each of the charges by virtue of the satisfaction of s 64(2) of the Act which provides:- The holder of a licence is not guilty of an offence against this section if the holder establishes that:- (a) the contravention of the condition was caused by another person, and (b) that other person was not associated with the holder at the time the condition was contravened, and (c) the holder took all reasonable steps to prevent the contravention of the condition.

The defendant submits that the explosions were caused by unknown persons who have hidden explosive materials within containers such as car bodies and scrap metal such as white goods; that those persons were not associated with the defendant and that the defendant has taken all reasonable steps to prevent the contravention of the condition.

The defendant does not challenge established principles relied upon by the prosecutor relating to causation as discussed in Kirkheaton District Local Board v Ainley, Sons & Co [1892] 2 QB 274; Alphacell Ltd v Woodward [1972] AC 824; Environment Agency v Empress Car Co. (Abertillery) Ltd [1999] 2 AC 22; Environment Agency v Milford Haven Port Authority [1999] 1 LloydsRep 673; Environment Protection Authority v Environmental and Earth Sciences [1999] NSWCCA 192.

In Alphacell, Lord Wilberforce at 834F observed that the word 'causing' where appearing in the Rivers (Prevention of Pollution) Act 1951 required a commonsense interpretation. In that decision, a pump which was designed to recycle polluted water had become choked with weeds, resulting in pollution of a river. His Lordship said (at 834H):- In my opinion this is a clear case of causing the polluted water to enter the stream. The whole complex operation which might lead to this result was an operation deliberately conducted by the appellants and I fail to see how a defect in one stage of it, even if we must assume that this happened without negligence, can enable them to say that they did not cause the pollution. His Lordship determined that rather than saying that the appellant was ' a cause ' of the pollution, held that the appellants ' caused ' pollution of the stream.

Lord Pearson after referring to the pumping activities of the defendant observed at 845C:- Those were positive activities and they directly brought about the overflow. What other cause was there?

The authorities referred to were each concerned with causation as an element of the offence. In this case, however, the question is whether the defendant has established that it is entitled to the benefit of a statutory defence. The pivotal question is not whether the defendant is not guilty of the offence, but whether the contravention of the condition was caused by another person.

Ordinarily, it would be a complete defence to a charge to say that someone else was the cause of the offence. In Environment Protection Authority v Multiplex Pty Limited (2001) 112 LGERA 1 Lloyd J held that such a defence could be availed of even for a strict liability offence. In R v Lambert [2001] 1 All ER 1014 at 1022 Lord Woolfe CJ observed in relation to statutory offences that a court should lean against an interpretation which required a defendant to prove an element of an offence where it can be read as a way of avoiding liability for what would otherwise be an offence. In this case the defendant is not required to prove that it did not commit the offence but rather that another person was responsible. Accordingly, the statutory defence provided by s 64(2) of the Act creates a different defence to that found by Lloyd J in Multiplex and that discussed by the House of Lords in Alphacell.

The obvious purpose of the statutory defence provided by s 64(2) of the Act was to relieve the licence holder from any breach if another person is proved to have been responsible for the breach. The statutory defence requires the defendant to satisfy the Court of the specified criteria on the balance of probabilities: s 141 Evidence Act 1995; and see also R v Carr-Briant [1943] KB 607; R v Dunbar [1958] 1 QB 1; DPP v Cole (1994) 100 NTR 1). If the defendant does so the defence is established and a conviction cannot be recorded.

To uphold the defendant's submissions, the Court would be required to find that each of the three requirements of s 64(2) of the Act have been satisfied. That is, factual findings are required that explosive material was placed in scrap for recycling, and further, that it was concealed in such manner that, despite all reasonable measures being taken, it was not detectable. Such finding could be available if there was evidence that each of the explosions resulted from concealment, and that a reasonable inspection could not detect explosive material.

Evidence has been called from three persons who are employed by the defendant as inspectors. They have provided evidence of the inspecting process and of the importance of their duties, namely to minimise the risk of explosions. Their evidence however does not address any of the incidents the subject of the charges and do not address the question of the specific measures taken on such days to minimise the risk of explosion. The explosions could have equally resulted from an omission on the part of the inspectors to observe explosive material which could have been readily detected. That is, there is insufficient evidence from which the Court could conclude that 'all reasonable measures' were taken by the defendant on such dates to avoid the explosions. The requirements of s 64(2) of the Act are cumulative, and the failure of the defendant to prove any one aspect renders the defence unavailable to it.

The Court accepts that the defendant has been attempting to inform its customers of the dangers of attempting to recycle explosive devices, and has adopted other measures to reduce the incidents. The fact that the defendant has been able to reduce the incidence of explosions from 30 to 20 during the ensuing year, by the implementation of such methods suggests that measures have now been taken which were not in force at the time of the offences.

The Court is therefore not satisfied on the balance of probabilities that the explosions were caused by the acts of others, nor that 'all reasonable measures' were in operation at the date of the offences. However, the Court is satisfied beyond reasonable doubt that the acts and omissions of the defendants resulted in the explosions the subject of the charges.

The Court finds that each offence is proved and that accordingly the defendant is guilty as charged.

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