Environment Protection Authority v Pullinger - [2024] NSWLEC 51 - NSWLEC 2023 case summary — Zoe

NSWNSWLEC

Environment Protection Authority v Pullinger

[2024] NSWLEC 51

Land and Environment Court (NSW)|2023-08-25|Before: Pritchard J

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At a glance

Source facts

Court

Land and Environment Court (NSW)

Decision date

2023-08-25

Before

Pritchard J

Catchwords

[1976] HCA 55 Boddington v British Transport Police [1999] 2 AC 143
[1998] 2 All ER 203
[2013] NSWCCA 204 George v Rockett (1990) 170 CLR 104
[1990] HCA 26 Gray v Woollahra Municipal Council [2004] NSWSC 112 Kempsey Shire Council v Slade (2015) 214 LGERA 214

Source

Original judgment source is linked above.

Catchwords

[1976] HCA 55 Boddington v British Transport Police [1999] 2 AC 143[1998] 2 All ER 203[2013] NSWCCA 204 George v Rockett (1990) 170 CLR 104[1990] HCA 26 Gray v Woollahra Municipal Council [2004] NSWSC 112 Kempsey Shire Council v Slade (2015) 214 LGERA 214[2015] NSWLEC 135 Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531[2010] HCA 1 Liverpool City Council v Cauchi (2005) 145 LGERA 1[1980] FCA 94 Precision Products (NSW) Pty Limited v Hawkesbury City Council (2008) 74 NSWLR 102[2008] NSWCA 278 R v FiliopovicGelevski (2008) 181 A Crim R 83[2008] VSCA 14 R v Rondo (2001) 126 A Crim R 562[2001] NSWCCA 540 Ryding v Kempsey Shire Council [2008] NSWLEC 306 Selby v Pennings (1998) 102 LGERA 253(1998) 19 WAR 520 Sutherland Shire Council v Benedict Industries Pty Ltd (No 4) [2015] NSWLEC 101 Sutton v R (1984) 152 CLR 528[1984] HCA 5 Taikato v The Queen (1996) 186 CLR 454

Judgment (608 paragraphs)

the Environment Operations Act 1997 (NSW) (as in force on 16 November 2020) ss 3, 6, 91, 92, 96, 101, 102, 104, 110, 212C, 212D, 217, 256, Sch 1, Dictionary Maitland Local Environmental Plan 2011 (NSW) Cases Cited: Beckwith v The Queen (1976) 135 CLR 569; [1976] HCA 55 Boddington v British Transport Police [1999] 2 AC 143; [1998] 2 All ER 203; [1998] 2 WLR 639 Burwood Council v Pan Pac Investments Pty Ltd [2018] NSWLEC 110 Council of the City of Sydney v Blue Chips Franchise Pty Ltd (Local Court (NSW), 9 August 2016, unrep) Council of the City of Sydney v Blue Chips Franchise Pty Ltd [2017] NSWLEC 24 Environment Protection Authority v Lithgow City Council [2007] NSWLEC 695 Environment Protection Authority v O'Brien [2023] NSWLEC 118 Environment Protection Authority v Pullinger (2021) 252 LGERA 102; [2021] NSWLEC 144 Environment Protection Authority v Ramsey Food Processing Pty Ltd [2009] NSWLEC 152 Environment Protection Authority v Sydney Drum Machinery Pty Ltd (No 4) [2016] NSWLEC 59 Environment Protection Authority v Truegain Pty Ltd (2013) 85 NSWLR 125; [2013] NSWCCA 204 George v Rockett (1990) 170 CLR 104; [1990] HCA 26 Gray v Woollahra Municipal Council [2004] NSWSC 112 Kempsey Shire Council v Slade (2015) 214 LGERA 214; [2015] NSWLEC 135 Kirk v Industrial Relations Commission of New South Wales (2010) 239 CLR 531; [2010] HCA 1 Liverpool City Council v Cauchi (2005) 145 LGERA 1; [2005] NSWLEC 675 Maund v Shoalhaven City Council [2019] NSWLEC 89 Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3) (1980) 47 FLR 163; [1980] FCA 94 Precision Products (NSW) Pty Limited v Hawkesbury City Council (2008) 74 NSWLR 102; [2008] NSWCA 278 R v Filiopovic; Gelevski (2008) 181 A Crim R 83; [2008] VSCA 14 R v Rondo (2001) 126 A Crim R 562; [2001] NSWCCA 540 Ryding v Kempsey Shire Council [2008] NSWLEC 306 Selby v Pennings (1998) 102 LGERA 253; (1998) 19 WAR 520 Sutherland Shire Council v Benedict Industries Pty Ltd (No 4) [2015] NSWLEC 101 Sutton v R (1984) 152 CLR 528; [1984] HCA 5 Taikato v The Queen (1996) 186 CLR 454; [1996] HCA 28 Udy v Hornsby Shire Council [2007] NSWLEC 242 Texts Cited: Macquarie Dictionary, 9th ed (2023) Category: Principal judgment Parties: Environment Protection Authority (Prosecutor) Robert Lenard Pullinger (Defendant) Representation: Counsel: F Berglund (Prosecutor) L Sims (Defendant) Solicitors: Legal Services Branch, Environment Protection Authority (Prosecutor) Carmody Lawyers (Defendant) File Number(s): 2020/327089 2020/327090 2020/327091 Publication restriction: Nil

[2]

JUDGMENT Introduction The three charges Direction 7 charge - proceeding 2020/327089 Direction 10 charge - proceeding 2020/327090 Prohibition notice charge - proceeding 2020/327091 Issues Outcome The initial clean-up notice given on 5 June 2017 The varied clean-up notice given on 18 May 2018 The prohibition notice given on 25 August 2020 The relevant legislative provisions Chapter 4 of the POEO Act Relevant legal principles Separate consideration of the three charges Burden and standard of proof Notices under ss 91, 96 and 101 of the POEO Act Agreed facts The premises The defendant, Glowbye and Truegain Truegain's activities at the premises between 7 December 2000 and 1 April 2016 Prevention notices given to Glowbye and the defendant on 30 September 2016 The nature and extent of the defendant's compliance with the initial clean-up notice in the period between June 2017 and March 2018 The EPA's inspections in March and April 2018, and the engagement by the EPA of Tox Free and GHD The nature and extent of the defendant's compliance with the varied clean-up notice in the period May 2018 to May 2019 The activities of EPS at the premises and the defendant's breach of the contract with EPS The nature and extent of the defendant's compliance with the varied clean-up notice in the period between May 2019 and June 2020 The prohibition notice, and the nature and extent of the defendant's compliance with the varied clean-up notice and the prohibition notice in the period from June 2020 onwards Rainfall at the premises in the period between 3 June 2018 and 27 November 2021 The engagement of Suez by the EPA in January 2021, and the operation of the interception system at the premises by Suez Cost compliance notices given by the EPA in relation to voluntary clean-up actions Donpat, Truegain, Glowbye, Bellham, JM&BP Defendant's financial capacity to comply with the varied clean-up notice and the prohibition notice The EPA's investigation into the defendant's financial circumstances from June 2020 onwards Registration of cost compliance notices on the premises Not agreed facts Evidence Mr Howat Ms Marler Mr Klepetko Mr Gleeson Mr Cowman Mr Matthews The defendant, Mr Pullinger The direction 7 charge: alleged offence against s 91(5) of the POEO Act The defendant's challenge to the validity of direction 7 of the varied clean-up notice (1) Whether there was a connection between direction 7 and the "pollution incident" the subject of the varied clean-up notice Defendant's submissions Prosecutor's submissions (2) Whether the prosecutor had a reasonable suspicion that a "pollution incident" had occurred or was occurring in relation to the above ground tanks Defendant's submissions Prosecutor's submissions (3) Whether the prosecutor was the appropriate regulatory authority in relation to the above ground tanks Defendant's submissions Prosecutor's submissions Conclusion in relation to the validity of direction 7 of the varied clean-up notice Failure to comply with direction 7 of the varied clean-up notice The direction 10 charge: alleged offence against s 91(5) of the POEO Act The prohibition notice charge: alleged offence against s 102 of the POEO Act Whether the giving of the prohibition notice was "warranted" within the meaning of s 101 of the POEO Act Prosecutor's submissions Defendant's submissions Conclusion in relation to whether the giving of the prohibition notice was warranted Whether the defendant complied with the prohibition notice Prosecutor's submissions Defendant's submissions Conclusion in relation to whether the defendant complied with the prohibition notice Conclusion in relation to the prohibition notice charge Defence of reasonable excuse Defendant's submissions on the defence of reasonable excuse in relation to the direction 7 charge, the direction 10 charge and the prohibition notice charge The direction 7 charge The direction 10 charge The prohibition notice charge The surrounding circumstances (1) The steps required to be taken to comply with the notices and other environmental obligations in relation to the premises (2) The resources required to carry out those actions (3) The resources available to the defendant (4) The actual steps taken by the defendant to attempt to comply with the notices and factors outside the control of the defendant that inhibited his ability to comply with the notices Prosecutor's submissions on the defence of reasonable excuse in relation to the direction 7 charge, the direction 10 charge, and the prohibition notice charge (1) Whether compliance with the notices was technically possible (2) Whether the defendant's financial circumstances resulted in an inability to comply with the notices Defendant's submissions in reply on the defence of reasonable excuse in relation to the direction 7 charge, the direction 10 charge and the prohibition notice charge Conclusion on the defence of reasonable excuse in relation to the direction 7 charge Conclusion on the defence of reasonable excuse in relation to the direction 10 charge Conclusion on the defence of reasonable excuse in relation to the prohibition notice charge Conclusion and orders

[6]

Direction 10 charge - proceeding 2020/327090

By summons filed on 16 November 2020 and amended on 29 March 2022 and 23 August 2023, the defendant is charged with an offence against s 91(5) of the POEO Act (the direction 10 charge). The amended summons dated 23 August 2023 alleges as follows: The Prosecutor claims: 1. An order that the Defendant … answer the charge that, from about 7 February 2020 and continuing to 5 November 2020, at or near 62 Kyle Street, Rutherford (the Premises) in the State of NSW, he committed an offence against section 91(5) of the Protection of the Environment Operations Act 1997 (the Act), in that he was given a Clean-Up Notice and, without reasonable excuse, he did not comply with the Clean-Up Notice. Particulars (a) Clean-Up Notice Clean-Up Notice No. 11548804 issued 5 June 2017 as varied by the Notice of Variation of Clean-Up Notice No. 1564650 issued 18 May 2018. (b) Direction not complied with: "10. Upon the completion of Direction 6, immediately remove and lawfully dispose of all liquids from the onsite bunds (or similar structures) and the underground tank and pit system as a result of the following circumstances: a) after 10mm or more of rainfall in any 24 hour period at Maitland Airport or recorded on Premises; or b) when the underground tank is over 1/3 full." (c) Manner of breach Direction 6 of the Varied Clean-Up Notice was completed on or about February 2019. From about 7 February 2020, the Defendant then failed to immediately remove and lawfully dispose of all liquids that accumulated in the onsite bunds and similar structures and the underground tank and put system at the Premises as a result of the following circumstances which occurred on an ongoing basis from 7 February 2020 and continuing to 5 November 2020: a) after 10mm or more rainfall in any 24 hour period at Maitland Airport or recorded on the Premises; or b) when the underground tank is over 1/3 full. …
On the third day of the hearing, 23 August 2023, the prosecutor filed amended consolidated particulars for the direction 10 charge. The amended consolidated particulars are as follows: 1) The manner of the breach particularised in the summon[s] states that "Direction 6 was completed on or about February 2019". On what dates "on or about February 2019" does the prosecutor allege that either of the circumstances referred to in Direction 10 occurred (ie on what dates or dates did "10mm or more of rainfall in any 24 hour period at Maitland Airport or recorded on the premises" OR "the underground tank is over 1/3 full" occur?" The Prosecutor alleges that the underground tank was more than one third full on the following occasions after February 2019, with reference to the relevant parts of the Prosecutor's evidence: i. 4 June 2020 … ii. 11 June 2020 … iii. 12 June 2020 … iv. 16 June 2020 … v. 22 June 2020 … vi. 22 June 2020 … vii. 1 August 2020 … viii. 19 August 2020 … ix. 4 September 2020 … x. 5 September 2020 … xi. 15 October 2020 … xii. 24 October 2020 … xiii. 26 October 2020 … xiv. 5 November 2020 … Additionally, the Prosecutor alleges that 10mm or more of rainfall in any 24-hour period occurred at Maitland Airport and/or the Premises on the following occasions with reference to the Prosecutor's evidence: 1. 7 February 2020: 35.4mm 2. 8 February 2020: 12.2mm 3. 9 February 2020: 66.4mm 4. 10 February 2020: 20.6mm 5. 6 March 2020: 24.2mm 6. 7 March 2020: 21.8mm 7. 4 April 2020: 15.6mm 8. 26 May 2020: 22.2mm 9. 10 June 2020: 12.4mm 10. 14 June 2020: 13.6mm 11. 13 July 2020: 13.0mm 12. 26 July 2020: 15.8mm 13. 27 July 2020: 46.8mm 14. 28 July 2020: 11.6mm 15. 10 September 2020: 10.4mm 16. 21 September 2020: 12.4mm 17. 25 October 2020: 15.4mm 18. 26 October 2020: 26.6mm 19. 29 October 2020: 10.6mm "2) For each date in answer to the above, does the prosecutor allege that the Defendant did or did not carry out Direction 10 to "immediately remove and lawfully dispose of all liquids from the onsite bunds (or similar structures) and the underground tank and pit system"? Yes. "3) If there is more than one occasion during the charge period that the prosecutor alleges Direction 10 was triggered but not complied with, which of those occasions is the subject of the charge in the summons?" The Prosecutor alleges that the Defendant failed to comply with the requirement in Direction 10 from February 2019 on each of the occasions set out at above in response to paragraph 1.
On the fourth day of the hearing, the prosecutor conceded that there was nothing in evidence in relation to particulars (i) to (iv), and that particular (vi) was not pressed.

[7]

Prohibition notice charge - proceeding 2020/327091

By summons filed on 16 November 2020 and amended on 29 March 2022, the defendant is charged with an offence against s 102 of the POEO Act (the prohibition notice charge). The amended summons dated 29 March 2022 alleges as follows: The Prosecutor claims that the Defendant … answer the charge that, from 25 August 2020 and continuing to 16 November 2020, at or near 62 Kyle Street Rutherford (Premises) in the State of NSW, he committed an offence against s 102 of the Protection of the Environment Operations Act 1997 (the Act), in that, without reasonable excuse, he did not comply with a prohibition notice given to him. Particulars (a) Prohibition Notice The Prohibition Notice issued and signed by the Honourable Matt Kean MP, Minister for Energy and Environment and dated 25 August 2020. (b) Direction not complied with "You, Robert Lenard Pullinger, are directed to cease carrying on the following activities for the period specified below: Storing waste and keeping substances that are harmful or potentially harmful to the environment, including hydrocarbons and PFAS chemicals, in the System and in tanks, containers, drums, sheds, vehicle trailers and other receptacles at the Premises, for a period of two years from the date of this Notice." (c) Manner of breach The Defendant failed to cease carrying on the activities of storing waste and keeping substances that are harmful or potentially harmful to the environment in a spill containment system at the Premises comprised of tanks, containers, drums, sheds, vehicle trailers and other receptables at the Premises from 25 August 2020 and continuing to 16 November 2020. …
On the third day of the hearing, 23 August 2023, the prosecutor filed amended consolidated particulars for the prohibition notice charge. The amended consolidated particulars are as follows: 1) What physical acts does the Prosecutor allege were carried out by the Defendant that amounted to the "activities of storing waste and keeping substances that are harmful or potentially harmful to the environment?" The Prosecutor alleges that, at the relevant times, the Defendant was the occupier of the Premises where quantities of waste and substances harmful or potentially harmful to the environment were kept, and he continued to store waste and keep substances harmful or potentially harmful to the environment. "2) What waste does the Prosecutor allege that the Defendant "stored" on the premises during the charge period?" Liquid waste, including waste oils and water contaminated with per- and poly-fluoroalkyl substances. "3) What substances that are harmful or potentially harmful to the environment does the Prosecutor allege the defendant "kept" on the premises during the charge period?" Liquid waste, including waste oils and water contaminated with per- and poly-fluoroalkyl substances.

[10]

The initial clean-up notice given on 5 June 2017

The initial clean-up notice was given to the defendant under cover of a letter dated 5 June 2017 which provided: The NSW Environmental Protection Authority ("EPA") reasonably suspects that a pollution incident is occurring as a result of current circumstances at 62 Kyle St Rutherford NSW 2320. … On the 28 April 2017 the EPA provided a draft notice to you for review and provide any comments. On 30 May 2017 the EPA received your response. The EPA has considered your comments and has decided to issue the notice as originally drafted with the exception of an extension to the date for compliance contained in direction 1 of this Clean-Up Action Notice from Friday 16 June 2017 until Friday 23 June 2017.
The initial clean-up notice was given on 5 June 2017 pursuant to s 91(1) of the POEO Act, and included the following by way of background: [9] The EPA is aware from previous inspections of the Premises and information provided to it by Truegain that Truegain constructed and operated a Spill Containment System at the Premises: (i) to capture spillage of substances received, used, blended, manufactured or stored at the Premises; (ii) to capture rainwater, including rainwater contaminated with those substances; and (iii) to prevent the escape of any spillage of those substances, and any liquid contaminated with those substances, from the Premises entering waters. [10] The EPA is aware, from previous inspections of the Premises and information provided by Truegain, that the Premises Spill Containment System includes the following: • The bunded area surrounding the area known as the Southern Tank Farm; • The bunded area surrounding area known as Tank Farm 112; • The bunded area surrounding area known as the Drum Tank Farm; • The bunded area surrounding area known as Tank Farm 108; • The bunded area surrounding area known as Waste Water Treatment Plant ("WWTP") Tank Farm; • The bunded area surrounding area known as Process Area Tank Farm; • The underground tank and pit system that causes liquids falling or spilling onto the Premises roadway to be captured and drained to the underground wastewater storage tank. This underground tank and put system is identified in Attachment 1 to this Clean-Up Action Notice. Attachment 1 to this Clean-Up Action Notice shows the approximate location of the areas and Spill Containment System referred to above. … [11] The EPA is also aware that, as part of the Spill Containment System, a roadway drainage, collection and liquid capture system was constructed, and operated at the Premises. The pits and pipes that form part of this liquid capture system drain via gravity to an underground wastewater tank. This liquid capture system and the underground waster tank is designed to prevent the escape of substances received, used, blended, manufactured or stored at the Premises including but not limited to rainwater contaminated with those substances that may have been placed or split at the Premises, from discharging into waters. … [13] During its inspection of the Premises on 16, 19 and 26 September 2016 the EPA officers observed the following: (i) the bund walls of the Southern Tank Farm, Tank Farm 112, Tank Farm 108 and the Drum Tank Farm were observed to have a number of seeps; (ii) the south-eastern section of the Southern Tank Farm also had a layer of what appeared to be emulsified waste oil. It was also noted that this material had a strong oily odour; (iii) the underground wastewater storage tank and associated pits appeared full. The EPA understands that this underground tank collects hydrocarbon contaminated water from within the Premises. Hydrocarbon contaminated water was present directly adjacent to the pit system, which is associated with the underground storage tank; (iv) hydrocarbon contaminated water was observed on parts of the internal road system and within the main refinery building; (v) sections of the hardstands around the Premises were cracked and/or slumping; (vi) the bunded storage area known as the Water Treatment Plant Tank Farm was approximately one third full of rainwater and potentially containing unknown contaminants; and (vii) the Premises appeared abandoned and no site personnel were present. The inspections were undertaken during business hours. … [17] The EPA has, based on observations made during the site inspections described above, and information provided by [the defendant], determined that liquid in the [p]remises Spill Containment System compromises the [p]remises ability to contain a spill from the bulk storage tanks, IBCs and 205 litre drums within the [p]remises Spill Containment System. This is due to the fact that the storage capacity of the bunds has been reduced to less than 50% design capacity and less than 20% in the Southern Tank Farm (as at 5 April 2017). [18] The EPA has, based on its observations of the [p]remises made during the site inspections described above, also determined that liquids containing PFOS/PFOA and hydrocarbons and other unknown chemicals contained within the [p]remises Spill Containment System would discharge, via the stormwater drains located at the [p]remises, to the environment, including nearby watercourses, in a rainfall event if not removed and lawfully disposed of in an environmentally acceptable manner. [19] Based on the information above, the EPA is of the opinion that the presence of contaminated liquid in the [p]remises Spill Containment System, and the inability of that system to contain the contaminated liquid in the event of rainfall, constitute a set of circumstances, as a consequence of which there is likely to be, a leak, spill or other escape of a substance, as a result of which pollution is likely to occur. …
The initial clean-up notice required the defendant to take clean-up actions including the following: 1. By Friday 23 June 2017, remove from the Premises and lawfully dispose of all liquid from the Premises Spill Containment System, which is defined in paragraph 10 above. 2. Remove from the Premises and lawfully dispose of at a facility that can lawfully receive it, all liquid in the Premises Spill Containment System within 48 hours of the conclusion of any rainfall event recorded at the Premises or at the Commonwealth Government's Bureau of Meteorology (Maitland Airport) Weather Monitoring Site. 3. By 7 July 2017, provide to the EPA in respect of the removal of liquid from the premises, pursuant to direction 1 above, the following: (i) A receipt from the transporter showing the name of the driver and registration of all vehicle(s) used to transport the liquid and the date that the liquid was transported and disposed; (ii) A receipt from the facility which received the liquid showing the business name/company name and the Australian Business Number … of the waste facility (or facilities) to which the liquid was transported, location of each facility where the liquid was transported; receipts/weighbridge dockets/invoices for liquid transport and disposal, showing the amount of liquid received at the facility. …

[11]

The varied clean-up notice given on 18 May 2018

On 18 May 2018, the prosecutor varied the initial clean-up notice pursuant to s 110(1) of the POEO Act.
The varied clean-up notice included a background section which provided as follows: D. The EPA is of the opinion that a Pollution Incident has occurred or is still occurring at the Premises as: a) the EPA understands that since the Notice was issued, contaminated liquid from the spill containment system has been pumped into above ground tanks located on the Premises and that these tanks are now full; b) the EPA understands that there has been minimal or no maintenance of the above ground tanks since the former occupier of the Premises, Truegain Pty Limited, as placed in liquidation in September 2016. The structural integrity of the tanks is uncertain; c) on 11-Apr-2018, an EPA Authorised Officer observed that the spill containment system was almost at full capacity; d) there is a risk that more rainfall will result in further discharges of Per- and poly-fluoroalkyl substances ("PFAS") and other contaminants discharging into Stony Creek; and e) The inability of the contaminated liquid to be contained on the Premises in the event of rainfall, constitutes a set of circumstances, as a consequence of which there is likely to be, a leak, spill or other escape of substance, as a result of which pollution is, or is likely to occur.
The varied clean-up notice "removed and replaced" directions 1, 2, 3, 4 and 5 of the initial clean-up notice as follows: 1. No waste is to be received at the Premises 2. By no later than 5pm on Wednesday 30 May 2018, install, operate and maintain on the Premises a standard rain gauge complying with relevant Australian Standards that measures rainfall in millimetres. Note: this Direction relates to Direction 10 below 3. By no later than 5pm on Wednesday 30 May 2018, place or cause to be placed, a sign (as depicted in Attachment A) at each entrance to the Premises.
The varied clean-up notice required further actions to be taken to reduce pollution including the following: 6. By no later than 5pm on Friday 29 June 2018, process, remove and lawfully dispose from the Premises all liquids contained within all onsite bunds and the underground tank and pit system. 7. By no later than 5pm on Friday 31 August 2018, process, remove and lawfully dispose from the Premises all liquids contained within all above ground tanks. 8. Processing of liquids as required in Direction 6 and 7 must be undertaken by an operator who holds a current in-force Environment Protection Licence issue by the EPA for the scheduled activity of 'Mobile waste processing'. 9. Mobile plant must not be on the Premises for longer than six (6) months in any 12-month period. 10. Upon the completion of Direction 6, immediately remove and lawfully dispose of all liquids from the onsite bunds (or similar structures) and the underground tank and pit system as a result of the following circumstances: a) Following a rainfall of 10mm or more in any 24 hour period (9:00am to 9:00am) recorded at the Commonwealth Government's Bureau of Meteorology (Maitland Airport) Weather Monitoring Site and/or recorded on the Premises. b) When the underground tank is over 1/3 full. For the purposes of determining if the underground tank is over 1/3 full the tank shall be dip tested at 9:00am each day or levels monitored by installing monitoring equipment.

[12]

The prohibition notice given on 25 August 2020

The cover letter to the prohibition notice dated 25 August 2020 provides as follows: The NSW Environmental Protection Authority (EPA) has recommended I give you a notice in writing directing you to cease carrying on the activity of waste storage and the keeping of substances harmful to the environment at the Premises (the activity). The EPA has made this recommendation because it advises me that it is of the opinion that there is an ongoing discharge of pollutants within the Premises arising from the activity, that activity is likely to cause harm to the environment and be injurious to public health and that the giving of the notice is warranted. …
The prohibition notice given on 25 August 2020 provided the following by way of background, and made the following direction: BACKGROUND … N. On 4 February 2019, Mr Pullinger and Glowbye provided the EPA with a preliminary investigation report examining groundwater and soil contamination at the Premises. Sampling involved targeting PFAS, petroleum hydrocarbons, polycyclic aromatic hydrocarbons and heavy metals as contaminants of concern, but did not include solvents despite a solvent wash area and a drum storage area in the northern parts of the Premises. The report found groundwater exceedances against the PFAS National Environment Management Plan (NEMP) drinking water guidelines, concentrations of copper, nickel and zinc exceeding NEPM groundwater investigation levels and soil detections of PFAS and NEPM Ecological Investigation Level exceedances for zinc. … P. On 12 September 2019, the EPA undertook sampling of the bund storage areas at the Premises confirming high levels of PFAS and other contaminants in bund water. It is believed that the above ground tanks are still holding waste material with similar pollutant characteristics to the bund water. There is an ongoing risk that contaminated liquids will be discharged from the System to areas within the Premises, especially during or after rain. Q. Under s 101 of the Act the EPA may recommend the issuing of a prohibition notice, including if it is of the opinion that there is an ongoing discharge of pollutants within premises arising from an activity, and that the continued activity is likely to cause harm to the environment or be harmful to public health. The EPA has made such a recommendation in respect of the activities at the Premises. … DIRECTION TO PROHIBIT ACTIVITIES You, Robert Lenard Pullinger, are directed to cease carrying on the following activities for the period specified below: 1. Storing waste and keeping substances that are harmful or potentially harmful to the environment, including hydrocarbons and PFAS chemicals, in the System and in tanks, containers, drums, sheds, vehicle trailers and other receptacles at the Premises, for a period of two years from the date of this Notice.

[14]

Chapter 4 of the POEO Act

Part 4.2 of Chapter 4 of the POEO Act concerns clean-up notices. As in force at 16 November 2020, the date of the commencement of the direction 7 charge and direction 10 charge proceedings, s 91(1) and (5) provided as follows in relation to clean-up notices that may be given by the appropriate regulatory authority: 91 Clean-up by occupiers or polluters (1) Notices The appropriate regulatory authority may, by notice in writing, do either or both of the following - (a) direct an owner or occupier of premises at or from which the authority reasonably suspects that a pollution incident has occurred or is occurring, (b) direct a person who is reasonably suspected by the authority of causing or having caused a pollution incident, to take such clean-up action as is specified in the notice and within such period as is specified in the notice. … (5) Offence A person who, without reasonable excuse, does not comply with a clean-up notice given to the person is guilty of an offence. Maximum penalty - … (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.
Also in Part 4.2, s 92 (as in force at all relevant times) provided as follows in relation to clean-up by public authorities: 92 Clean-up by public authorities (1) Directions to public authorities to take clean-up action If the EPA reasonably suspects that a pollution incident has occurred or is occurring, the EPA may, by notice in writing, direct a public authority to take such clean-up action as is specified in the notice. The public authority is authorised and required to take that action. (2) Voluntary clean-up action by public authorities If a public authority reasonably suspects that a pollution incident has occurred or is occurring, the public authority may take such clean-up action as it considers necessary. The public authority is authorised to take that action, whether or not it is directed to take clean-up action under subsection (1). …
Part 4.3 of Chapter 4 is concerned with prevention notices. Section 96 of the POEO Act (as in force at all relevant times) provides as follows in relation to preventive action: 96 Preventive action (1) Application of section This section applies when the appropriate regulatory authority reasonably suspects that an activity has been or is being carried on in an environmentally unsatisfactory manner at any premises or by any person (otherwise than at premises). (2) Prevention notices The appropriate regulatory authority may, by notice in writing, do either or both of the following - (a) direct the occupier of the premises, (b) direct the person carrying on the activity (whether or not at premises), to take such action, as is specified in the notice and within such period (if any) as is specified in the notice, to ensure that the activity is carried on in future in an environmentally satisfactory manner. (3) Examples The action to be taken may (without limitation) include any of the following - (a) installing, repairing, altering, replacing, maintaining or operating control equipment or other plant, (b) modifying, or carrying out any work on, plant, (c) ceasing to use plant or altering the way plant is used, (d) ceasing to carry on or not commencing to carry on an activity, (e) carrying on an activity in a particular manner, (f) carrying on an activity only during particular times, (g) monitoring, sampling or analysing any pollution or otherwise ascertaining the nature and extent of pollution or the risk of pollution, (h) action with respect to the transportation, collection, reception, re-use, recovery, recycling, processing, storage or disposal of any waste or other substance, (i) preparing and carrying out a plan of action to control, prevent or minimise pollution or waste, (j) reviewing the carrying out of an activity. …
Part 4.4 of Chapter 4 concerns prohibition notices. In Part 4.4, s 101 of the POEO Act (as in force at 16 November 2020, the date of the commencement of the proceedings in relation to the prohibition notice charge) provided as follows in relation to prohibition on activities: 101 Prohibition on activities (1) Application of section This section applies where the EPA recommends to the Minister that a notice be given under this section because it is of the opinion that the emission or discharge of pollutants from (or within) any premises in which any activity is carried on - (a) is causing or is likely to cause such harm to the environment, or (b) is or is likely to be so injurious to public health, or (c) is causing or is likely to cause such discomfort or inconvenience to any persons not associated with the management or operation of the activity, that the giving of the notice is warranted. (2) Notice The Minister may, by notice in writing, do either or both of the following - (a) direct the occupier of the premises, (b) direct the person carrying on the activity, to cease carrying on the activity, or any specified aspect of it, for such period as is specified in the notice. …
Also in Part 4.4, s 102 (as in force at 16 November 2020) provided as follows in relation to the offence of not complying with a prohibition notice: 102 Offence A person who, without reasonable excuse, does not comply with a prohibition notice given to the person is guilty of an offence. Maximum penalty - … (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.
Part 4.6 of Chapter 4 contains various miscellaneous provisions. In Part 4.6, s 110 (as in force at all relevant times) provides as follows in relation to the variation or revocation of a notice given under Chapter 4: 110 Revocation or variation (1) A notice given under this Chapter may be revoked or varied by a subsequent notice or notices. (2) A notice may be varied by modification of, or addition to, its terms and specifications. (3) Without limiting the above, a notice may be varied by extending the time for complying with the notice. (4) A notice may only be revoked or varied by the Minister or by the regulatory authority or public authority that gave it. …
Chapter 7 of the POEO Act concerns investigation. In Part 7.7 of Chapter 7, s 212C (as in force at all relevant times) provides as follow in relation to actions by incorrect regulatory authority: 212C Actions by incorrect regulatory authority (1) This section applies if a regulatory authority or an authorised officer of the authority exercises functions under this Act or the regulations relating to an activity or work that - (a) is not authorised or controlled by an environment protection licence, and (b) in relation to which the authority is not the appropriate regulatory authority. (2) A regulatory authority must, as soon as practicable after becoming aware of any such exercise of functions, notify the appropriate regulatory authority in writing of the functions so exercised and of any such functions that it proposes to continue to exercise or to cease to exercise in relation to the matter. (3) A regulatory authority or an authorised officer of the authority may (but is not required to), if notice is given in accordance with subsection (2), continue to exercise functions under this Act or the regulations relating to the activity or work until - (a) directed to do otherwise by the appropriate regulatory authority, or (b) an environment protection licence is granted in respect of the activity or work concerned. (4) The appropriate regulatory authority may, by notice in writing, direct a regulatory authority (including its authorised officers) not to exercise functions under this Act or the regulations in relation to an activity or work if it becomes aware that the other authority or an authorised officer of that authority is exercising, or has exercised, functions of the appropriate regulatory authority in relation to that activity or work. …
Section 212D (as in force at all relevant times) provides as follows in relation to the continuation of exercise of functions by the appropriate regulatory authority: 212D Appropriate regulatory authority may continue to exercise functions (1) If a regulatory authority (including an authorised officer) is required to cease to exercise functions, or ceases to exercise functions, under section 212C (3) or (4), the appropriate regulatory authority or an authorised officer of that authority may continue to exercise any functions commenced by the other regulatory authority or an authorised officer, as if the functions had been exercised by the appropriate regulatory authority or an authorised officer of that authority. (2) For the purposes of this Act and the regulations and any proceedings, any function previously exercised by the other regulatory authority (including an authorised officer) relating to the activity or work concerned is taken to have been exercised by the appropriate regulatory authority (or an authorised officer of that authority) and this Act applies accordingly. (3) Without limiting subsection (2), any notice or direction given by the other authority or an authorised officer of the authority may be enforced, or varied or revoked, as if it had been given by the appropriate regulatory authority or an authorised officer of that authority. (4) A notice issued by the other authority or an authorised officer of the authority is taken to be varied, to the extent of any inconsistency, if a subsequent inconsistent notice is issued by or on behalf of the appropriate regulatory authority or an authorised officer of that authority. (5) Nothing in this section affects the right of the other regulatory authority to recover a fee, charge or cost under this Act in relation to a notice given while exercising functions as referred to in section 212C (1) or (3).
Chapter 8 of the POEO Act concerns criminal and other proceedings. Part 8.2 concerns proceedings for offences. In Part 8.2, s 217(1) (as in force at all relevant times) provides as follows: 217 EPA or other appropriate regulatory authority may institute proceedings (1) EPA Proceedings for an offence against this Act or the regulations may be instituted by the EPA. (2) Other appropriate regulatory authority Any such proceedings may also be instituted by the appropriate regulatory authority, if it is not the EPA, in connection with a matter for which it is the appropriate regulatory authority.
In Part 8.5, which concerns evidentiary provisions, s 256(1) provides in relation to the onus of proving that a person had a reasonable excuse: 256 Onus of proof of certain matters (1) In any proceedings under this Act, the onus of proving that a person had a reasonable excuse or lawful excuse (as referred to in any provision of this Act or the regulations) lies with the defendant.
Schedule 1 to the POEO Act concerns scheduled activities. Clause 42 (as in force at all relevant times) provides relevantly as follows in relation to waste storage: 42 Waste storage (1) This clause applies to waste storage, meaning the receiving from off site and storing (including storage for transfer) of waste. (1A) Waste is taken to be stored at premises for the purposes of this clause even if the waste is only being transferred at those premises between units of rolling stock, motor vehicles or trailers. (2) However, this clause does not apply to any of the following - (a) the storage of stormwater, (b) the storage of up to 60 tonnes at any time of any of the following kinds of waste (but not when accompanied by any other kind of waste) - … (iv) waste oil, (c) the storage of sewage within a sewage treatment system, (d) the storage and transfer of liquid waste that is generated and treated on site prior to sewer discharge, or lawful discharge to waters. … (3) The activity to which this clause applies is declared to be a scheduled activity if - (a) more than 5 tonnes of hazardous waste, restricted solid waste, liquid waste or special waste (other than waste tyres) is stored on the premises at any time, or (b) more than 5 tonnes of waste tyres or 500 waste tyres is stored on the premises at any time (other than in or on a vehicle used to transport the tyres to or from the premises), or (c) more than the following amounts of waste (other than waste referred to in paragraph (a) or (b)) are stored on the premises at any time - (i) in the case of premises in the regulated area - more than 1,000 tonnes or 1,000 cubic metres, (ii) in the case of premises outside the regulated area - more than 2,500 tonnes or 2,500 cubic metres, or (d) more than the following amounts of waste (other than waste referred to in paragraph (a) or (b)) is received per year from off site - (i) in the case of premises in the regulated area - 6,000 tonnes, (ii) in the case of premises outside the regulated area - 12,000 tonnes. (4) For the purposes of this clause, 1 litre of waste is taken to weigh 1 kilogram.
The Dictionary to the POEO Act (as in force as at the date of the commencement of all three proceedings) included the following definitions: clean-up action, in relation to a pollution incident, includes - (a) action to prevent, minimise, remove, disperse, destroy or mitigate any pollution resulting or likely to result from the incident, and (b) ascertaining the nature and extent of the pollution incident and of the actual or likely resulting pollution, and (c) preparing and carrying out a remedial plan of action. It also includes (without limitation) action to remove or store waste that has been disposed of on land unlawfully. … occupier of premises means the person who has the management or control of the premises. … pollution incident means an incident or set of circumstances during or as a consequence of which there is or is likely to be a leak, spill or other escape or deposit of a substance, as a result of which pollution has occurred, is occurring or is likely to occur. It includes an incident or set of circumstances in which a substance has been placed or disposed of on premises, but it does not include an incident or set of circumstances involving only the emission of any noise.
Section 191 of the Evidence Act 1995 (NSW) (Evidence Act) provides as follows in relation to agreed facts: 191 Agreements as to facts (1) In this section - agreed fact means a fact that the parties to a proceeding have agreed is not, for the purposes of the proceeding, to be disputed. (2) In a proceeding - (a) evidence is not required to prove the existence of an agreed fact, and (b) evidence may not be adduced to contradict or qualify an agreed fact, unless the court gives leave. (3) Subsection (2) does not apply unless the agreed fact - (a) is stated in an agreement in writing signed by the parties or by Australian legal practitioners, legal counsel or prosecutors representing the parties and adduced in evidence in the proceeding, or (b) with the leave of the court, is stated by a party before the court with the agreement of all other parties.
Section 192 of the Evidence Act provides as follows in relation to the court giving leave: 192 Leave, permission or direction may be given on terms (1) If, because of this Act, a court may give any leave, permission or direction, the leave, permission or direction may be given on such terms as the court thinks fit. (2) Without limiting the matters that the court may take into account in deciding whether to give the leave, permission or direction, it is to take into account - (a) the extent to which to do so would be likely to add unduly to, or to shorten, the length of the hearing, and (b) the extent to which to do so would be unfair to a party or to a witness, and (c) the importance of the evidence in relation to which the leave, permission or direction is sought, and (d) the nature of the proceeding, and (e) the power (if any) of the court to adjourn the hearing or to make another order or to give a direction in relation to the evidence.

[17]

Notices under ss 91, 96 and 101 of the POEO Act

In Precision Products (NSW) Pty Limited v Hawkesbury City Council [5] at [101], Allsop P (Beazley and McColl JJA agreeing) said that the following could be stated from the provisions in ss 91, 96 and 101 of the POEO Act: 101. From the above provisions the following can be stated: (1) The exercise of the power in s 91 is one of judgment for the regulatory authority (or the EPA: s 91(2)). The notice "may" be given. (2) The power in s 91 is not exercised for the benefit of either the occupier or the person to whom it is given; rather, the exercise of the power is only for the benefit of the public by dealing with, or preventing, the escape of polluting substances. (3) The nature of the possible action contemplated by the phrase "cleanup action" in s 91 is likely, in the ordinary course, to place a financial burden on the person obliged by the notice to act. (4) The notice in s 91 must be complied with, unless a person has a reasonable excuse. (5) The circumstances that may give rise to a clean-up notice under s 91, or a preventative notice under s 96, or a prohibition notice under s 101 are not clearly segregated. There is, to a degree, a hierarchy of importance or seriousness, but there is potential for overlap of the sections. This multiplicity of bases for action should not be used to limit the scope of any particular step provided for. All are concerned with the public good, by protecting the environment. (6) The relevant suspicion or belief or opinion is as to the occurrence of a pollution incident (s 91), or the carrying on of an activity in an environmentally unsatisfactory manner, including the occurrence of a pollution incident (s 96) or the serious matters of environmental damage (s 101). The relevant state of apprehension or belief is not one required (at least in terms of the provisions) to be judged having regard to the interests of the person or persons to whom the notice is directed. (7) The financial consequences of the notices are, to a degree, dealt with. Parliament has not, however, sought to create a statutory avenue for compensation should the views of the relevant authority turn out to be wrong. (8) The power in s 91 (and ss 96 and 101) is compulsory and enforced by the criminal law. To that extent, an obligation to consider the interests of the person to whom the notice is directed may be seen as inherently in conflict with the direction and focus of compulsory state power.
In Udy v Hornsby Shire Council [6] at [14], Jagot J said in relation to ss 91, 96 and 101 of the POEO Act: The circumstances in which environment protection notices may be issued, and the actions such notices may require, self-evidently overlap to some extent. For example, a pollution incident can trigger (in terms) a clean-up notice (s 91(1)) and a prevention notice (s 95 and s 96(1)). A pollution incident of sufficiently serious consequence may also trigger a prohibition notice (s 101(1)).

[19]

The premises

The premises are located on Lot 29 of Deposited Plan 221102 at 62 Kyle Street, Rutherford on land zoned IN1 Industrial pursuant to Maitland Local Environmental Plan 2011 (NSW). In the satellite photo reproduced below, the red site boundary shows the general location of the premises in Rutherford:
The following structures are located on the premises: 1. a brick office building, including a laboratory, on the northern frontage to Kyle Street; 2. plant buildings associated with former waste oil processing facilities; 3. a spill containment system (the spill containment system) comprising "9 bunded areas around approximately 70 above ground tanks", built on concrete hardstands with drains which drain liquids to an underground tank with approximately 60,000 litres (L) of capacity (the underground tank) (together, the system); 4. access roads; and 5. various sheds and storage buildings across the premises.
The site layout diagram below depicts the various structures on the premises (the site diagram):
The site diagram depicts the following features of the premises: 1. bunded areas described in black rectangle-shaped labels and marked in grey lines, including the areas marked: 1. southern tank farm (the southern tank farm); 2. tank farms 112 and 108 (tank farm 112 and tank farm 108); 3. drum tank farm (the drum tank farm); 4. waste water treatment plant (the waste water treatment plant); and 5. process area tank farm (the process area tank farm); 1. above ground tanks marked as circles with identifying tank numbers; 2. plant marked in purple; and 3. access roads marked in green.
There have been changes to the structures on the site from time to time, and the parties did not agree that the site diagram reflects the arrangement of structures on the site at all relevant times. However, the site diagram was referred to in the final SOAF.
A stormwater canal runs adjacent to the eastern boundary of the premises, and joins Stony Creek approximately 20 metres (m) south of the premises. The southern part of the premises is covered in vegetation extending to the southern boundary of the premises adjacent to Stony Creek. Stony Creek flows into Fishery Creek, Wallis Creek and the Hunter River, as shown on the map of watercourses provided to the EPA by WaterNSW below:

[21]

Truegain's activities at the premises between 7 December 2000 and 1 April 2016

Between 7 December 2000 and 1 April 2016, Truegain undertook the scheduled activities of waste oil processing and waste storage at the premises under Environment Protection Licence no 7638 (the Truegain EPL). During this period, Truegain received, stored and processed waste oils and waste water at the premises by refining and processing waste oils into re-usable petroleum-based products, and processed waste water for discharge to a sewer spill containment system operated by the Hunter Water Corporation (Hunter Water).
Truegain also conducted waste oil processing activities at the premises with Australian Waste Oil Refineries Pty Ltd (ACN 081 415 661) (AWOR). The defendant was a director and secretary of AWOR until it was placed into liquidation on 14 September 2016, and deregistered by ASIC on 17 September 2018.
Between 19 October 2005 and 24 February 2016, Truegain held a major trade waste permit issued by Hunter Water which permitted Truegain to discharge liquid waste from the premises to sewer, subject to certain conditions (the trade waste agreement). On 24 February 2016, Hunter Water directed Truegain to stop discharging waste water into Hunter Water's sewers due to Hunter Water detecting per- and poly-fluoroalkyl substances (PFAS) in discharges from the premises in samples taken by Hunter Water on 12 February 2016 (the Hunter Water direction). This fact was agreed on the basis that: 1. prior to February 2016, the defendant was not aware of the presence or likely presence of PFAS on the premises; 2. the trade waste agreement between Truegain and Hunter Water did not require monitoring for PFAS or place any limits on discharge of PFAS; 3. the Truegain EPL did not require monitoring for PFAS; and 4. the source of PFAS at the premises has not been identified.
It was agreed that the Hunter Water direction "caused significant difficulties for Truegain's continued operations, as it was prevented from discharging any waste water from the [p]remises, including treated waste water generated from waste oil processing and waste water from toilets and offices on the [p]remises."
On 9 March 2016, the EPA varied the Truegain EPL to require it to monitor rainfall at the premises and to conduct a mandatory environmental audit. On 1 April 2016, the EPA suspended the Truegain EPL by suspension notice no 1539166 (the suspension notice). On the same day, the EPA wrote to Truegain and directed it to store all waste in adequately bunded areas.
On 23 August 2016, the EPA inspected the premises and identified oily water in the main bunds. The EPA subsequently wrote to the defendant and Mr Paul Lucas, the then directors of Truegain, to remind them of Truegain's obligations under prevention notice no 1524877 to manage accumulated rainwater in the bunds at the premises. On 26 August 2016, Mr Lucas replied stating that he was retiring that day from Truegain and that all further decisions and administrative and financial control lay with the managing director of Truegain, the defendant.
As at 8 September 2016, there were approximately 200,000 L of waste oil and 60,000 L of PFAS-contaminated waste water stored at the premises. On 15 September 2016, JLA Insolvency & Advisory Pty Ltd, the administrator of Truegain, disclaimed Truegain's liabilities for the premises. On the same day, Mr Javier Parent, the former manager of Truegain, advised the EPA that he had informed the administrator's agent of the ongoing obligations under the conditions of the suspension of the Truegain EPL and the prevention notice no 1524877.
On 19 September 2016, EPA officers inspected the premises and observed that they appeared to be abandoned, that the bunds contained water apparently contaminated by hydrocarbons, and that the underground tank appeared full. On 26 September 2016, EPA officers again inspected the premises to investigate a complaint received by the EPA's environment line that oily water from the premises was entering the stormwater drain. EPA officers observed that the underground tank was full and was overflowing, but that the bunds in the spill containment system had not overflowed.

[22]

Prevention notices given to Glowbye and the defendant on 30 September 2016

On 29 September 2016, the defendant met with EPA authorised officers Mr William George and Mr Michael Howat in relation to a draft prevention notice. During that meeting, the defendant acknowledged the following: 1. it was his responsibility to prevent contaminated water discharging from the premises; 2. the EPA would take legal action against him should pollution of waters occur; 3. the underground tank required immediate attention to prevent waste water from discharging to the stormwater system; and 4. it would be crucial to engage or employ someone to manage the site to ensure that all waste water would be managed appropriately to prevent any discharge from the premises.
On 30 September 2016, the EPA gave prevention notice no 1545252 to the defendant and prevention notice no 1545280 to Glowbye pursuant to s 96(2) of the POEO Act. The prevention notices required the removal and lawful disposal off-site of all liquids or waste materials within bunded areas (including waste oil and contaminated rainwater) to prevent discharge of contaminated water from the premises.
Mr Konstanin (Kosta) Vujkovic is an engineer and was formerly a maintenance and production manager employed by Truegain until its liquidation in September 2016. Mr Vujkovic says that he was directly employed by the defendant on a casual basis from about October 2016 until the defendant ceased paying him in or about mid-2019.
Between 12 October 2016 and 11 February 2017, the defendant and the EPA corresponded by email.
On 17 January 2017, Clean-tech Partnerships Pty Ltd (CTP) was registered as an Australian company. On 9 June 2019, CTP was deregistered. Between 17 January 2017 and 9 June 2019, the defendant was one of three directors of CTP and its secretary.
On 5 April 2017, the defendant wrote to the EPA and advised: Due to the recent rainfall, the bunds are filling up with rainwater. The main southern tank farm is approximately 80% full and the others are approximately 50% full. I do not have the financial resources to empty the bunds or tanks. You requested my accountant's details and I emailed them you on 10 March 2017. I've instructed my accountant to respond to any request regarding my financial position. In October 2016, Toxfree removed 40,000[L] for $10,106.80. The breakdown is as follows: 40,000 [L] x 0.13 [cents] per litre plus liquid waste levy @ $72.70 per tonne plus truck hours = 6 x $170 per hour (2 loads) and two waste tracking fees @ $30 each. TOTAL COST = $ 9188 PLUS GST = $10,106.80.

[23]

The nature and extent of the defendant's compliance with the initial clean-up notice in the period between June 2017 and March 2018

On 28 April 2017, the EPA gave draft notice of clean-up action no 1548804 to the defendant, inviting comment. On 30 May 2017, the defendant sent a letter to the EPA in response to the draft clean-up notice. On 5 June 2017, the EPA gave the initial clean-up notice to the defendant pursuant to s 91(1) of the POEO Act. At the time the initial clean-up notice was given, the EPA was the appropriate regulatory authority under s 6(1) of the POEO Act as the premises were still subject to the Truegain EPL, and the defendant was the owner and occupier of the premises. On 26 June 2017, the defendant sent a letter to the EPA in response to the initial clean-up notice.
On 10 July 2017, EPA officers inspected the premises and observed as follows: Spill containment system. • A murky dark black/yellow colour liquid was observed in the concrete bunding to the drum and southern tank farms. • The liquid height in the bunds varied from approximately a third to three quarters full. • Liquid was pooling and tricking on the concrete apron outside the bunding adjacent to the join between the drum farm and southern tank farm. This liquid appeared to be seeping from inside the bunding to outside thorough a metal plate at the join of the two (2) bunded area.
On 10 July 2017, the defendant spoke with EPA authorised officer Ms Jenny Lange. Ms Lange's file note records the defendant telling her as follows: Where managing the site as best we can with what we've got. • Has a site manager Kosta • Is hampered by not having the money to undertake works • Restricted by Hunter Water Corporation, who require PFAS standards below enHealth guidelines. If it was enHealth guidelines he could treat the water himself. • Believes has the technology to treat PFAS by separation of water with filtration and distilling and then activated carbon. • In relation to the notice, he has no assets but has been managing the water generation on the site thorough installation of gauges on all the tanks, pumping the water into the tanks and evaporation. This has been quite good. • The hydrocarbon film to the top of the water has been removed and pumped into the tanks. Occurred during January to May. • Believes bunding area is at worst 70% and at best 40% full. • There are no suitable alternatives for the removal and treatment of the PFAS. • [the defendant] said that he is hoping to meet with Kosta towards the end of this week to come up with a plan for the site.
On 25 July 2017, the defendant sent an email to the EPA attaching photographs of him "locking off" tanks at the premises. On 1 September 2017, EPA authorised officer Ms Lange conducted an inspection of the premises with the defendant. Ms Lange's notes provide as follows: • [the defendant] said the underground tank forming part of the spill containment system has a capacity of approximately 50,000[L]. This tank was observed to have a dark to black colour liquid in it and was very close to capacity. [The defendant] stated that they would have to pump it out soon to the on-site storage tanks. • [the defendant] said that the tank is pumped out into the existing tanks on site as they don't have any oil in them they have been used to hold water from the bund areas. • Prior to water/oils entering the underground tank, it goes thorough an under and over oil separator. In the separator was a dark coloured liquid with very little colour or consistency change between each of the chambers. The separator appeared to be at least 3/4 full. • Numerous intermediate bulk containers (IBC's), with the wording oily water were stacked along the driveway access. • Sumps and grates to the concrete handstand areas were mostly full with black coloured liquid or sludge. • A dark green/brown coloured liquid was in the concrete bunded area of the southern tank farm, ranging from approximately 200-400mm in height (10% -60% capacity). An oily sheen was observed to the top of the liquid in some locations. [The defendant] said that the tanks have a capacity of approximately 3 million litres. • A dark green/brown coloured liquid was observed in the tank farm bunded area. The volume of liquid in this area was less than was observed on my inspection of 10 July 2017. No liquid was observed escaping from the tank farm bund. [The defendant] said that there are approximately 100 drums in this area. and the drums contained oily rags. The drums were mostly stacked two (2) high with some at single height. • IBC's containing oil were located in a bunded area adjacent to the [waste water treatment plant tank farm]. A black coloured oil was in the bund and close to overflowing indicating that one or some of the IBC had been damaged and leaked into the bund. • A murky green/grey liquid was in the bund area to the [waste water treatment plant] Tank Farm (approximately 1/3 full). • A number of tanks throughout the site were in a rusty condition. • 11 shipping containers were located behind the [waste water treatment plant] tank farm, which [the defendant] said some are full with drums with grease oil and others with work equipment. • At the rear at the premises was a 'grave yard' of empty tanks, tankers, equipment and machinery. • I ran thorough the clean-up notice 1548804 directions with [the defendant]. I said "Have you removed and disposed of the liquid from the [s]pill containment system?" (direction 1 of the Notice), [the defendant] said "No one will take it". I asked similar questions for directions 2-4 and [the defendant] had the same response "No one will take it". • [The defendant] said he had quotes from Toxfree to take the waste water but it's $800 per tonne and clean-away cannot take it. • Currently on-site they are [trailing] activated carbon filters on the premises to remove PFAS from the oily water. • [The defendant] was requested to undertake an audit of the volume and capacity left in the tanks on site. • Kosta is managing the premises and is on site for approximately 5 days a week for 4 hours a day.
On 5 January 2018, the EPA revoked the Truegain EPL. On 20 March 2018, EPA authorised officer Ms Lange inspected the premises with Mr Vujkovic and Mr Steve Matthews, the general manager of CTP. Ms Lange's notes provide as follows: I introduced myself and spoke with Mr Matthews and we had a conversation to the effect of: • Mr Matthews is the general manager for a new company Clean-tech partnerships Pty Ltd (CTP), who intends to lease the premises from [the defendant]. • Mr Matthews has previous involvement with a number of liquid waste companies. • CTP is proposing once the site is cleaned-up to lease the premises and commence a business of removing and treating PFAS, and to have RMIT as a technological partner in the process. • For now Mr Matthews has been seconded from CTP to the property owner [the defendant] to clean-up the premises. • Mr Matthews intended to come and talk with the EPA about what they can do with the site, but his first priority has been to discuss with Hunter [W]ater (Greg Heeney) getting a trade waste agreement. First starting with a domestic connection. • Also looking at removing IBC's and drums - believes mostly hydrocarbon impacted waters. • Kosta is on site everyday between 8am and 4pm. He is employed by [the defendant]. • Mr Matthews said that he would email thorough a proposal for removing waste from the premises. • I advised it is ok to remove waste provided it meets with requirements of clean-up notice and removed to a lawful facility with documentation. I suggested taking in-situ photographs prior to removal and matching with testing and disposal documentation. • Considering getting a mobile plant to process the contaminated liquid on the premises. I advised to ensure have consents and licences. • I advised that wet weather is forecast and need to ensure no discharges into the adjoining creek. OBSERVATIONS • The level in the bunds was the lowest I had seen it, approximately 400-500mm freeboard in the southern tank farm. Green shade to the bottom of the bund floor. • The drum farm was almost completely empty. • Kosta advised the underground tank is at full capacity.

[24]

The EPA's inspections in March and April 2018, and the engagement by the EPA of Tox Free and GHD

On 21 March 2018, EPA authorised officer Ms Lange made an unannounced inspection of the premises. Ms Lange's notes of the inspection provide as follows: • The [p]remises had commenced to flood, a liquid with a hydrocarbon sheen was across the driveway to a depth of up to 200-300mm at the southern end of the driveway and adjacent to the underground tank, • I could not see the grates to the oil separator near the underground tank thorough the liquid. • The driveway was flooded from the front to the rear of the southern tank farm. • The bunds were at approximately 50% full and rapidly filling. • A strong hydrocarbon odour was present. • I went along the rear of the buildings adjoining the creek and observed liquid rushing from the [p]remises through a rectangular shape hole at the base of the colourbond wall sheeting. Liquid was flowing from the hole over the ground and into the creek. • The liquid was flowing from the driveway into and thorough the building and then out as described above into the creek. • Mr Matthews and Kosta said they had not detected the discharge. • I notified [Fire and Rescue NSW] (FRNSW) to undertaken an assessment of the premises. • FR arrived on the premises at approximately 1.30pm, it was agreed to sandbag across the entrance to the premises, the entrance to the building, the rear of the western driveway and rear of IBC's at the end of the driveway. Steve Matthews and Kosta agreed to pump from the underground tank and into the southern tank farm to reduce the immediate flooding. • FRNSW checked the creek and advised that foaming had been observed in Stony Creek at the end of Gardner Street. Booms were installed at this location. • I spoke with Mark Hartwell who commenced arranging for tankers to pump out the liquid. • FRNSW assisted in collecting samples from the discharge point and upstream. The upstream point was in the creek to the south of Kyle Street but may still have been influenced by the discharge point due to turbulence and vegetation in the creek. There were no other safe locations to sample. • With sandbagging complete the discharge ceased. • EPA officer Matthew Corradin arrived on the premises at approximately 4pm. • I collected samples from the liquid on the hardstand driveway entrance and the southern tank farm bund. • I left the premises at approximately 4.45pm I took photographs and made notes in Field Notebook 72720 pages 42&43. SAMPLE RESULTS
On 21 March 2018, 42 millimetres (mm) of rainfall was recorded at Maitland Airport, and on 22 March 2018, 110.8 mm. On 21 March 2018, Ms Marler, then director of the EPA's Hunter Region, formed the view that it was necessary for the EPA to take emergency clean-up action by pumping out contaminated water from the underground tank to prevent the discharge of contaminated water from the premises and a pollution incident occurring as a result.
Between 21 March 2018 and 22 March 2018, the EPA undertook clean-up action under the initial clean-up notice by engaging Tox Free Solutions Ltd (Tox Free) to pump out 63,240 L of contaminated water from the spill containment system and transport and dispose of it at the waste water treatment plant of Cleanaway Operations Pty Ltd (Cleanaway) at Homebush at a cost of $281,233.81.
On 22 March 2018, EPA authorised officer Ms Lange inspected the premises. Ms Lange's notes of that inspection provide as follows: (a) Bunds mostly 150-300mm freeboard. Capacity significant reduced from inspection on 20/3/18. Patches of dark black, other areas green. Strong hydrocarbon odour throughout the site. Noted slight trickle dampness at discharge point rear of shed. Kosta put additional sandbags in this area. (b) Kosta [Vujkovic] was pumping liquid from the underground tank into the tank farm bunds; (c) Steve Matthews proposed to Ms Lange that water in the tank farm bunds would then be pumped into tanks. (d) Ms Lange advised Mr Matthews that the EPA intend to engage contractors to pump out contaminated liquids from the premises. Mr Matthews said that he "can't see the need as it had stopped raining and we have capacity in the tanks". (e) Ms Lange informed Mr Matthews that the [initial clean-up notice] required the removal of liquid, not pumping it around the premises, to which Mr Matthews replied "the wording of the notice does not say cannot move it around".
On 23 March 2018, EPA officers inspected the premises and observed that the underground tank was 98% full and the main southern tank farm had between 2/3 and 3/4 capacity remaining. On 26 March 2018, EPA authorised officer Ms Lange inspected the premises and was advised by Mr Matthews, Mr Vujkovic and representatives of Enviro Pacific Solutions Pty Ltd (EPS) that additional storage, being three 23,700 L tanks, would arrive at the premises after Easter 2018.
On 29 March 2018, the EPA received a letter from Mr Matthews (which, Mr Matthews agreed in cross-examination, set out the timeframes upon which the varied clean-up notice was based). The letter provided: Although we are waiting for some additional details, we are able to present the following Table as a guideline for our proposed plan. Note, Week 1 is the week starting the 2nd of April 2018 Table 1: Milestones … 1. In relation to week 3 (which I calculate to have commenced on 16 April 2018) and week 4 (which I calculate to have commenced on 23 April 2018), the Table provided as follows: Milestone "e) Mobilise and commission PFAS plant" "f) Formal meeting with Hunter Water" Comments An additional 100kL of temporary storage to be brought to the site for processing and future rainfall event management. Discuss existing legacy issues … 1. In relation to week 5 (which I calculate to have commenced on 30 April 2018), the Table provided as follows: Milestone g) Process underground storage tank water h) Start to process bund water i) Profile waste stored in tanks j) Generate 75kL of "clean" water for disposal k) Send samples offsite for analysis l) Complete grease removal Comments Initiate sampling regime to qualify performance of process. Start to stockpile "clean" water for potential discharge or offsite disposal Sample all tanks and develop a plan to identify technology requirements for processing External evidence to be provided to Hunter Water as proof of performance Prepare bund area for cleaning and sealing 1. In relation to week 6 (which I calculate to have commenced on 7 May 2018), the Table provided as follows: Milestone m) continue with bund water processing n) Sample sludge in underground o) Mobilise roadway/bund cleaning infrastructure p) Rectification works on sewer infrastructure to be completed Comments Determine PFAS levels and appropriate treatment methodology for sludge Focus will be on the stormwater retention system to reduce potential for contamination during rain Allow for site disposal of domestic waste and controlled release via batch discharge of treated PFAS waters (with Hunter Water approval) 1. In relation to week 7 (which I calculate to have commenced on 14 May 2018), the Table provided as follows: Milestone 1) Continue with bund water processing and start on water stored in tanks Comments This will create additional ullage for future rain events should it be required
On 3 April 2018, EPA officers again inspected the premises, and Ms Lange made notes as follows: Kosta advised that the underground tank is approximately 3/4 full. The sumps to the internal roadways were full, the separator leading connected to the underground tank had approximately between 100-150mm free. The bunds had approximately 150-200mm freeboard. Mr Matthews said that he believes that there is roughly 3 ML of contaminated liquid on site with approximately 2 ML of PFAS contaminated liquid - this includes the spill containment system and the above ground tanks. This is a guess and EPA officers advised him that testing would be required of all waste to be certain of its contents and disposal requirements. The bunding to the western side of the southern tank farm appeared to be leaking. Green liquid was observed in the bunds and the same colour green liquid outside the bund wall on the hardstand access driveway. Two 23,000 [L] poly-tanks were on the premises and can be used as emergency storage of liquids. Mr Matthews advised that obtaining quotes from [Haldon] and EPS for the treatment of PFAS contaminated liquids.
On 11 April 2018, EPA officers inspected the premises and observed as follows: 1. a hydrocarbon odour was detected throughout the premises; 2. the underground tank was almost full; 3. there was between 200-300 mm of freeboard in the bunds, the liquid in the bunds being green in colour with some algae growth; 4. the western side of the southern tank farm was leaking a green liquid that was observed on the adjacent hardstand driveway and flowing to sumps connected to the underground tank; 5. the sumps to the hardstand driveway access had a black coloured liquid in them; 6. the drum tank farm was free of liquid, which the EPA was advised had been pumped into the reactor (estimated 10,000 L); and 7. sandbags remained onsite across driveway entrances and the building from which bund liquid had discharged on 21 March 2018.
On 13 April 2018, EPA officers met with the defendant and Mr Matthews. Ms Lange's notes of the meeting record that the defendant and Mr Matthews advised as follows: 1. the defendant said that his focus was "on trying to make the premises environmentally safe". A new company had been established CTP, which was "looking to develop 21st century processing facility for PFAS" and the "goal [was] for CTP to occupy the site once the site is cleaned up"; 2. Mr Matthews said that he was the general manager of CTP, but had been seconded to the defendant and now acted on behalf of the defendant; and 3. EPS was likely to be engaged to process the liquid in the spill containment system by way of a mobile plant, but it did not yet have an EPA licence to do so.
On 19 April 2018, the EPA requested that the defendant empty the underground tank into the bunded areas to ensure maximum capacity was available in anticipation of heavy rainfall. On 19 April 2018, Mr Matthews advised the EPA that the underground tank had been pumped dry with only the sludge remaining at the bottom, and that there was approximately 130 kilolitres (kL) of above ground storage available and excess sand bags which could be deployed if necessary.
On 26 April 2018, the EPA notified Maitland City Council (Council) pursuant to s 212C of the POEO Act that the EPA intended to carry out functions as the appropriate regulatory authority to ensure the clean-up and removal of the contaminated liquids within the spill containment system at the premises.
On 27 April 2018, Mr Matthews advised the EPA that following a rainfall event on 25 April 2018, the premises had received an estimated 25 to 30 tonnes of rainwater which had been pumped from the underground tank into a 55 tonne above ground tank. Mr Matthews advised that the underground tank had no liquid and that there was approximately 90 tonnes of above ground storage, with a "couple of smaller bunds relatively free of water", but that "bund water levels remain high at this stage".
On 27 April 2018, Mr Matthews contacted the EPA proposing to arrange for additional water storage to be installed at the premises by EPS. On 1 May 2018, the EPA received an application from EPS for an environment protection licence to operate a mobile water treatment plant at the premises. On 2 May 2018, the EPA advised Mr Matthews of the EPA's decision to undertake clean-up action at the premises pursuant to s 92(2) of the POEO Act. On 3 May 2018, the EPA engaged GHD Pty Ltd (GHD) to conduct a remediation options report to identify options to prevent further potential discharges from the premises. On 21 September 2018, GHD provided its report to the EPA.
On 4 May 2018, EPS provided further supporting information in relation to its application for an EPL. On 7 May 2018, Mr Matthews emailed the EPA, advising that bund levels were lower; that there was 160 kL of "free room"; that 22 pallets of grease were removed from site; and that "activity for the rest of the week will involve consolidating oil and oily water for testing and offsite disposal and the repackaging of grease drums for external disposal".
On 11 May 2018, the EPA sent the draft variation of clean-up notice no 1564650 to the defendant. On 14 May 2018, Mr Matthews provided a report to the EPA, and on 17 May 2018, the EPA received the defendant's comments on the draft varied clean-up notice.
On 17 May 2018, the EPA advised the defendant of its intention to undertake further clean-up actions at the premises pursuant to s 92(2) of the POEO Act by engaging a contractor to remove contaminated water, noting that the defendant's comments of 17 May 2018 "failed to detail a clear course of action, timeframe or financial capacity to clean-up the [p]remises and remove the pollution".
Also on 17 May 2018, the EPA released a selective tender to the "top five market share organisation services in liquid waste collection services" to remove contaminated liquid from the spill containment system. On 14 June 2018, the tender period ended, one tender having been received from Cleanaway. EPS was not included in the tender process.
On 18 May 2018, the EPA gave the varied clean-up notice to the defendant pursuant to s 110 of the POEO Act, at which time the defendant was the owner and occupier of the premises.

[25]

The nature and extent of the defendant's compliance with the varied clean-up notice in the period May 2018 to May 2019

On 24 May 2018, EPA authorised officer Ms Lange inspected the premises. Ms Lange's notes of the inspection provide as follows: • 3 x 23,000 L poly tanks on site adjacent to Southern Tank Farm; • Mr Matthews said 'Kosta is noticing more movement with leaking from the bunds has increase' [sic]; • Bund levels decreased approx. 50mm; • Now freeboard in southern tank farm ranging 350-400mm; • Drum tank farm empty; • Rain gauge installed on front fence of the premises; • Observed leaking liquid to western side of wall of southern tank farm • Nick EPS advised once have mobile approval it will take 2 weeks to mobilise - including 1 week testing / validation
On 28 May 2018, the EPA sent an email seeking further information to assess EPS' application for an EPL. On 1 June 2018, Ms Lange inspected the premises and observed that: • EPA warning signs were erected on the entry gates as per the requirements of clean-up notice. • A strong hydrocarbon/tar odour was detected. • The access roads on the premises were covered in a thick black oil like substance with a hydrocarbon sheen that was sticky and slippery. • Storage options for contaminated liquids in the event of rainfall are 3 x 23,000 litre poly tanks and EPS storage container at 75,000 [L]. • Kosta said he has been decanting the IBC's, the oil is being stored in the reactor, water into IBC's and sludge into [Environmental Treatment Solutions] ETS bins. This is occurring thorough gravity as there is no power to the site. • Composition of IBC's approx. 5% oil, 30% water, 65% sludge. • Approximately 300 -400 mm freeboard in the southern tank farm. • Southern tank farm continues to seep liquid out of the bunded area.
On 4 June 2018, Mr Matthews emailed a report to the EPA, and on 5 June 2018, Ms Lange inspected the premises and observed that: • Kosta advised 0.5mm of rain received over the weekend. • Weekend runoff was pumped from the underground tank on Monday into the aboveground tank and southern tank farm. • A slight rise in liquid level in bunds. Southern tank farm between 250-300mm freeboard. • Steve Matthews was on site but occupied with people from [EPS].
On 12 June 2018, Mr Matthews emailed a report to the EPA, and on 13 June 2018, the EPA received a revised application for an EPL from EPS. On 18 June 2018 and 25 June 2018, Mr Matthews emailed reports to the EPA. On 19 June 2018, the EPA received a letter from Mr Mark Green, the defendant's then solicitor. On 21 June 2018, the EPA responded to the letter from Mr Green, and on 22 June 2018 and 25 June 2018, the EPA received further letters from Mr Green. On 25 June 2018, Mr Green telephoned Ms Lange, and on 26 June 2018, the EPA received a letter from Mr Green.
On 27 June 2018, EPA authorised officer Ms Lange inspected the premises with representatives of Cleanaway, Tox Free and Haldon Industries Pty Ltd (Haldon), and Mr Matthews and Mr Vujkovic. Ms Lange's notes record that: 1. 19 samples were taken from the underground tank, tank farm 112 and 108, the process area tank farm, the drum tank farm and the waste water treatment plant; 2. liquids in the bunds were a dark brown to green colour with a hydrocarbon odour detected, which intensified when disturbed; 3. the driveways were covered in a thick layer of oil film; and 4. Mr Matthews advised that no waste had left the premises and would remain onsite for processing by EPS upon approval of the licence application.
On 28 June 2018, the EPA received a further letter from Mr Green, and on 29 June 2018, the EPA responded to Mr Green's letters of 19, 25, 26 and 28 June 2018. On 29 June 2018, the EPA wrote to EPS advising that it had reviewed the revised application for an EPL and required further information for approval. On 2 July 2018, Mr Matthews emailed a report to the EPA, and on 6 July 2018, the EPA received further information in support of the application for an EPL from EPS. On 9 July 2018, the EPA provided in-principle approval for EPS' application for an EPL for a mobile water treatment. On 10 July 2018, 16 July 2018, 24 July 2018, 30 July 2018, 6 August 2018 and 14 August 2018, Mr Matthews emailed reports to the EPA.
On 15 August 2018, the EPA inspected the premises and was advised by Mr Vujkovic that the underground tank was approximately 200 mm full, leaving around 1.2 m freeboard in the tank. The EPA observed that there was approximately 390 mm of freeboard for the bunded area in the southern tank farm. Mr Vujkovic further advised that they were still pumping liquid from the underground tank to the bunds.
On 17 August 2018, the EPA issued a draft EPL to EPS for comment, and on 22 August 2018, EPS provided comment to the EPA. On 24 August 2018, the EPA provided a revised draft EPL to EPS.
On 24 August 2018, the EPA gave two notices requiring payment of reasonable costs and expenses under s 104(2) of the POEO Act (compliance cost notice no 1566748 and compliance cost notice no 1598403) to the defendant and Glowbye as the owners and occupiers of the premises for half shares of the EPA's costs of $281,233.81 incurred in engaging Tox Free to take clean-up action at the premises between 21 March 2018 and 28 May 2018 to remove and dispose of 63,240 L of contaminated liquid.

[26]

The activities of EPS at the premises and the defendant's breach of the contract with EPS

On 29 August 2018, the EPA issued environment protection licence no 21143 to EPS, authorising it to undertake the scheduled activity of mobile waste processing to treat PFAS-contaminated liquids at the premises (the EPS EPL). On 30 August 2018, the defendant entered into a contract with EPS for it to design, procure, commission and operate a water treatment system to treat 3 megalitres (ML) of PFAS contaminated water at the premises (the EPS contract). The works were to be completed by EPS in two phases: 1. the processing of liquids from the bunded areas and the underground tank, and any surface waters, estimated to be about 1.5 ML (addressing direction 6 of the varied clean-up notice) (phase 1); and 2. the processing of liquids in the above ground tanks (addressing direction 7 of the varied clean-up notice) (phase 2).
Prior to signing the contract with EPS, the defendant informed EPS that CTP was no longer involved, and that he personally would be running the clean-up of the premises. Under the EPS contract, the defendant was obliged to pay EPS amounts for scheduled items and milestone payments, totalling $302,158.61, as follows: 1. Milestone 1: preliminaries, payable on granting of the draft EPL: $30,465.07 (the milestone 1 payment). 2. Milestone 2: infrastructure, payable on all equipment having been delivered and assembled ready for commissioning on site: $79,728.30 (the milestone 2 payment). 3. Milestone 3: ready to treat 1 ML, payable on the start of operations, following successful commissioning: $65,865.88 (the milestone 3 payment). 4. Milestone 4: ready to treat 2 ML, payable after 1 ML of contaminated water have been treated: $65,865.88 (the milestone 4 payment). 5. Milestone 5: ready to treat 3 ML, payable after 2 ML of contaminated water have been treated: $60,023.48 (the milestone 5 payment). 6. Milestone 6: final reconciliation (payable after waste water treatment plant has been demobilised): to be specified (the milestone 6 payment).
As at 31 August 2018, the liquids which were contained in the above ground tanks as at 18 May 2018 (the date the varied clean-up notice was given) remained in the above ground tanks, and had not been processed or removed from the premises and disposed of lawfully. Between 31 August 2018 and 15 November 2018, EPS invoiced the defendant the following amounts in accordance with the EPS contract: 1. on 31 August 2018, EPS invoiced for work under milestone 1 in the amount of $30,465.07 (exclusive of GST) (the milestone 1 invoice); 2. on 17 September 2018, EPS invoiced for work under milestone 2 plus additional schedule of rate items in the amount of $79,728.30 (exclusive of GST) (the milestone 2 invoice); and 3. on 15 November 2018, EPS invoiced for work under milestone 3 in the amount of $74,752.16 (exclusive of GST) (the milestone 3 invoice).
On 13 September 2018, EPS commenced work and set up a mobile water treatment plant at the premises. On 17 and 24 September 2018, Mr Matthews emailed reports to the EPA. On 5 October 2018, EPA officers inspected the premises and observed that liquids from the underground tank were being pumped out into the tank farm area.
On 11 October 2018, the defendant paid EPS an amount of $121,212.71 for the milestone 1 and milestone 2 invoices.
Between 16 October 2018 and 7 November 2019, the EPA corresponded with EPS regarding the work to be completed at the premises under the EPS EPL. On 19 October 2018, the EPA conducted an inspection of the premises. During the inspection, Mr Vujkovic advised that the underground tank was empty and that liquid had been pumped into the southern tank farm. Mr Vujkovic explained that he stopped pumping into the bunded areas due to the area nearly reaching capacity.
On the night of 7 November 2018, the premises received 17.6 mm of rainfall, and on 8 November 2018, the EPA conducted an inspection. Mr Vujkovic told EPA officers that the underground tank was now empty as it had been pumped out to the bunds, however that morning it had been full and overflowing into the driveway. The defendant, also present at the inspection, advised the EPA of a further delay in securing funding to clean-up the premises.
By 15 November 2018, the construction and commissioning of the treatment plant was completed, and EPS had commenced operations treating PFAS-contaminated water.
On 21 November 2018, the defendant paid EPS an amount of $82,227.38 for the milestone 3 invoice.
On 22 November 2018, the EPA met with the defendant and Mr Matthews to discuss future clean-up action. The EPA file note records that the defendant advised as follows: 1. sampling had been conducted and sent away for analysis to determine that waste water from the premises was in line with the requirements for acceptance by Hunter Water; 2. cleaning of the premises' roads had been undertaken and there were various BICs and containers on the premises filled with liquids that needed to be treated and removed; 3. he had started acquiring quotes for the desludging of the underground tank; and 4. his intention was to remediate the premises and eventually sell it.
On 26 November 2018, Mr Matthews emailed a report to the EPA, and on 28 November 2018, EPA officers inspected the premises. Mr Vujkovic advised the EPA officers that the premises had received 18 mm of rainfall in the previous 24 hours, that the underground tank was emptied in the morning, and that he estimated that it was presently about half-full. On 29 November 2018, Mr Vujkovic told EPA officers that "the underground tank was now full and that he was pumping to the [s]outhern [t]ank farm which had approximately 200mm freeboard."
On 3 December 2018, Mr Matthews emailed two reports to the EPA, including a report from RCA Australia dated 3 July 2018 in relation to the results of groundwater monitoring. On 10 December 2018, 13 December 2018 and 17 December 2018, Mr Matthews emailed further reports to the EPA. Between 12 December 2018 and 18 April 2019, Mr Justin Gleeson of EPS provided weekly monitoring reports in relation to the operation of the mobile liquid waste treatment plant at the premises, including details of the quantities of liquid waste treated onsite and disposed of offsite, with tracking sheets and disposal dockets.
On 18 December 2018, EPA officers inspected the premises and observed that the underground tank was full and overflowing around the tank and drains. Several bunds also appeared to be near full capacity. The EPS treatment plant was not running at this time due to the pH probe being replaced. On 18 December 2018, the EPA wrote to the defendant requesting that he immediately arrange for additional waste water storage to ensure that no discharge occurred and that he remove and replace failed and contaminated sandbags. The defendant complied with this request. On 19 December 2018, the defendant responded to the EPA, and noted that the underground tank was now empty, additional sandbags had been purchased, and that the premises had 150 kL of storage capacity should a rain event occur.
On 4 February 2019, Mr Matthews provided the EPA with an updated report from WSP Australia Pty Ltd (WSP) dated 1 February 2019. On 11 February 2019, the EPA inspected the premises. By 13 February 2019, EPS had completed the work required for the milestone 4 payment by treating 1 ML of contaminated water, and was ready to commence treating 2 ML of contaminated water in the above ground tanks. On 18 February 2019, and again on 25 February 2019, Mr Matthews emailed reports to the EPA. The report of 25 February 2019 was Mr Matthews' last weekly report to the EPA on behalf of the defendant.
On 26 February 2019, EPS issued the defendant with an invoice in the amount of $115,029.66 for completion of the milestone 4 works; namely, being ready to commence treatment of the 2 ML of contaminated water (the milestone 4 invoice). The milestone 4 invoice required payment by 5 March 2019. It was agreed that the defendant failed to make any payment towards either the milestone 4 payment or the milestone 5 payment.
Between 28 November 2018 and 14 April 2019, EPS treated 1,866,900 L and disposed of 1,761,850 L of contaminated water from the premises. Between 14 February 2019 and 16 April 2019, EPS performed works associated with the milestone 5 payment, being the treatment of 2 ML of contaminated water to a value of $22,859.14 (excluding GST).
Reports provided by EPS indicate that the amounts of contaminated water processed by EPS and removed from the premises in the period between 28 November 2018 and 14 April 2019 were as follows: Period Quantity (L) of water treated at premises Quantity (L) of water disposed offsite from the premises 28 November 2018 to 2 December 2018 Not known 111,400 3 December 2018 to 9 December 2018 129,600 16,600 10 December 2018 to 16 December 2018 63,200 136,850 17 December 2018 to 23 December 2018 113,200 69,000 24 December 2018 to 30 December 2018 86,400 60,000 31 December 2018 to 6 January 2019 43,200 65,000 7 January 2019 to 13 January 2019 129,600 108,000 14 January 2019 to 20 January 2019 100,000 184,600 21 January 2019 to 27 January 2019 100,000 91,800 28 January 2019 to 3 February 2019 0 11,000 4 February 2019 to 10 February 2019 150,000 94,000 11 February 2019 to 17 February 2019 100,000 146,100 18 February 2019 to 24 February 2019 72,000 63,500 25 February 2019 to 3 March 2019 106,500 76,000 4 March 2019 to 10 March 2019 90,000 60,000 11 March 2019 to 17 March 2019 63,200 36,000 18 March 2019 to 24 March 2019 90,000 0 25 March 2019 to 31 March 2019 150,000 168,000 1 April 2019 to 7 April 2019 180,000 132,000 8 April 2019 to 14 April 2019 100,000 132,000 Total 1,866,900 1,761,850

[28]

The nature and extent of the defendant's compliance with the varied clean-up notice in the period between May 2019 and June 2020

On 15 May 2019, the EPA inspected the premises and observed that: 1. the underground tank was free of liquids, with sludge remaining in the base; 2. bund area 108 and 110 was approximately half-full of rainwater, and the southern tank farm bund "had approximately 100mm left in bund"; 3. the front bund appeared empty; and 4. no processing of the PFAS contaminated liquids was occurring at the time of inspection, and the defendant advised the EPA that processing had ceased due to financial constraints and that he was trying to sell the premises in its current condition.
On 30 May 2019, the defendant advised EPA authorised officer Ms Lange that his finance "on the premises had been knocked back", and that he was looking to sell another property in Queensland, but that "this would not be a quick solution".
On 3 September 2019, the EPA inspected the premises and was advised by Mr Vujkovic that the premises had received approximately 50 mm of rain over the last few days. The EPA observed a significant amount of water in the tank farm 108 area. That water was being pumped out of the underground tank to the southern tank farm; and the remaining storage capacity was only in the bunded areas and the underground tank.
On 5 September 2019, the EPA issued to the defendant show cause letter no 1584805 (show cause letter no 1584805), inviting him to show cause why the EPA should not take regulatory action in respect of a suspected breach of s 91(5) of the POEO Act by him in failing to comply with direction 7 of the varied clean-up notice. On 6 September 2019, Mr Chris Kintis of Clarke Kann Lawyers wrote to the EPA in response to show cause letter no 1584805 on behalf of the defendant and Glowbye. On 19 September 2019, the EPA received an email from the defendant in response to show cause letter no 1584805.
On 23 October 2019, the EPA inspected the premises and observed that volumes of water in various bund areas seemed to have dropped since the most recent inspections.
On 24 October 2019, EPS commenced civil proceedings against the defendant in the District Court of NSW seeking judgment in the amount of $163,232.30 for amounts due under the contract plus interest and costs.
On 19 March 2020, Glowbye engaged WSP to inspect the premises and provide a report summarising "the infrastructure and waste remaining on the site" and "estimating the scope of works and cost required to remediate the site." WSP provided to Glowbye a report dated 1 May 2020 (the WSP report).
On 26 May 2020, EPA officers inspected the premises which were unattended. On the same day, the EPA was advised by Mr Vujkovic that he had commenced other employment, and that he no longer attended the premises or performed his former duties as a site caretaker.
Between June 2020 and October 2020, Cleanaway attended the premises and pumped out the spill containment system and removed approximately 468,280 L of contaminated rainwater that threatened to discharge from the premises, and issued 2 invoices for those works which amounted to $897,706.98.
Between 4 June 2020 and 19 June 2020, there was an estimated 2.1 ML of contaminated water present in 62 above ground tanks, with 38 above-ground tanks estimated to contain 347,000 L of non-aqueous phase liquids.

[32]

Cost compliance notices given by the EPA in relation to voluntary clean-up actions

The EPA gave the following compliance cost notices to the defendant pursuant to s 104(2) of the POEO Act in relation to voluntary clean-up actions undertaken by it pursuant to s 92(2) of the POEO Act (the cost compliance notices): Date of notice Notice no. Purpose Amount 24 August 2018 1566748 For half of the clean-up costs incurred by the EPA in between 21 March 2018 and 28 May 2020 in engaging Tox Free to pump out, remove and lawfully dispose of 63,240 L of contaminated liquid from the premises. $140,616.90 20 August 2020 1598403 For Glowbye's share of the clean-up costs incurred by the EPA in between 21 March 2018 and 28 May 2020 in engaging Tox Free to pump out, remove and lawfully dispose of 63,240 L of contaminated liquid from the premises that were previously the subject of cost compliance notice no. 1568898 as Glowbye was now deregistered. $140,616.90 20 August 2020 1598934 For clean-up costs incurred by the EPA in between 26 June 2020 and 19 July 2020 in engaging Cleanaway to remove and lawfully dispose of 343,280 L of contaminated liquid from the premises. $897,706.98 18 November 2020 1603011 For clean-up costs incurred by the EPA between 1 August 2020 and 10 September 2020 in relation to the removal and lawful disposal by Cleanaway of 195,180 Ls of contaminated liquid from the premises. $533,179.35 21 April 2021 1606051 For clean-up costs incurred by the EPA between 1 October 2020 and 31 January 2021 in relation to the removal and lawful disposal by Cleanaway of 918.3 tonnes of contaminated liquid from the premises. $2,306,914.52 30 September 2021 1613107 For clean-up costs incurred by the EPA in relation to the installation, monitoring and operation of an interception system by Suez, and the removal and lawful disposal by Suez of 1,443,250 tonnes of contaminated liquid from the premises between 21 January 2021 and 30 March 2021. $3,425,942.91 TOTAL $7,444,977.56

[35]

Defendant's financial capacity to comply with the varied clean-up notice and the prohibition notice The Gevin loan

On 24 September 2018, Gevin Nominees Pty Ltd (Gevin) offered to lend Glowbye $1,200,000 (the Gevin loan). On 28 September 2018, the mortgage over the premises as security for the Gevin loan was registered.
Gevin engaged JPM Valuers and Property Consultants (JPM) who provided a report dated 20 February 2019 valuing the premises at $500,000, and finding that it was "not suitable security for First Mortgage Security Purposes" due to the ongoing and extensive contamination of the premises. As a result of the advice of JPM, Gevin ceased to advance the balance of the principal sum under the Gevin loan. At the time Gevin ceased providing advances, Gevin had advanced $917,862.46 to Glowbye.
On 25 September 2020, Gevin issued a notice of default to Glowbye as borrower and the defendant as guarantor of the Gevin loan. The notice of default asserted that Glowbye was in default of the terms of the loan for failing to pay the principal sum and interest from 10 October 2019, and required the payment of $1,184,847.18 within 30 days. The Benkath loan
On or about 25 October 2018, Benkath Nominees Pty Ltd (ACN 005 225 945) as trustee for the Kevin T Meade & Associates Pty Ltd Superannuation Fund concluded a loan contract with Bellham to loan to Bellham the sum of $3,255,000 (the Benkath loan). The terms of the Benkath loan included that the loan was secured by: 1. a first ranking mortgage over 66-108 Watsons Road, South Ripley, Queensland (the Ripley property); 2. a second ranking mortgage over 9A Crescent Street, Hunters Hill, NSW 2100 (the Hunters Hill property); 3. general security interest on the personal property security register granted by Bellham and the defendant personally; and 4. a guarantee provided by the defendant personally.
As at 25 October 2018, the Ripley property was wholly owned by Bellham and had been valued by Ponton Valuations (Qld) Pty Ltd on 18 September 2018 for asset consideration purposes at $5,250,000.
As at 25 October 2018, the registered proprietor of the Hunters Hill property was Ms Jane Mulvihill, the defendant's spouse. The loan contract for the Benkath loan was signed by the defendant on behalf of Bellham as borrower and mortgagor of the Ripley property, by the defendant on his own behalf as guarantor, and by Ms Mulvihill as mortgagor of the Hunters Hill property. On 25 October 2018, Benkath advanced $3,043,425 to Bellham. On 26 October 2018, $2,960,230.54 of those funds were directed to refinancing loans over the Ripley property and the Hunters Hill property. On 2 September 2019, Ms Mulvihill sold the Hunters Hill property for $4,375,000.
On 12 February 2020, the solicitors for Benkath notified the defendant (as director of Bellham as borrower and in his capacity as guarantor) by two letters as follows: 1. on 26 January 2020, the term of the Benkath loan had expired; 2. Bellham had failed to attend to the payment of interest since that date; 3. Benkath required repayment of the principal sum of $3,255,000, plus interest and costs; and 4. a notice to exercise a power of sale in respect of the Ripley property was enclosed.
On or about November 2020, Benkath exercised its power of sale of the Ripley property and sold it for $3,300,000. The Fidelity loans
On or about 27 March 2019, Fidelity Capital (Australia) Pty Ltd (Fidelity) entered into a loan contract with Glowbye under which Fidelity loaned $100,000 to Glowbye as borrower (Fidelity's first loan). The loan contract for Fidelity's first loan was signed by the defendant on behalf of Glowbye as borrower and on behalf of the guarantors. On 1 April 2019, Fidelity lodged a caveat over the premises under the contract for Fidelity's first loan. Glowbye repaid the $100,000 under Fidelity's first loan. On or about 30 April 2019, Fidelity entered into a facility agreement with Bellham (the facility agreement) under which Fidelity loaned the sum of $385,000 to Bellham (Fidelity's second loan).
Fidelity subsequently engaged Preston Rowe Paterson Valuers to provide a valuation report in relation to the premises. On 1 May 2019, Preston Rowe Paterson Valuers inspected the premises and provided a valuation report dated 1 May 2019 which gave a market valuation of the premises in the amount of $1 "on the basis of vacant possession, as is, with plant and equipment on site, subject to EPA Clean Up Notices".
On 21 November 2019, Fidelity entered into a deed of variation of the facility agreement with Bellham in which the principal sum loaned under the facility agreement was increased from $385,000 to $620,000. The defendant signed the deed of guarantee on behalf of Donpat, Glowbye and himself. The also defendant signed the second mortgage over the premises on behalf of Glowbye and himself. On 25 November 2019, the mortgage was executed for the mortgagee by Fidelity as the trustee for the Fidelity Capital (Australia) Unit Trust.
It is alleged by Fidelity that on 1 February 2020 Bellham defaulted on Fidelity's second loan. On 1 February 2020, the amount owing under the mortgage was $797,953.33. Fidelity says that at 27 November 2020, the mortgagors had made no repayments and the amount outstanding was $865,491.58.

[36]

The EPA's investigation into the defendant's financial circumstances from June 2020 onwards

On 15 June 2020, the defendant sent an email to EPA officer Mr Hartwell stating that: With regard to the companies you require information on. Namely Glowbye … Bellham … Donpat … These companies never submitted tax returns nor have they had a bank account as they didn't generate any income nor tax losses at this stage. JM[&]BP self managed superannuation is a self managed super fund that when Truegain's operation were closed down. I paid wages to staff with these funds as my staff wages were required. Currently there is $116.00 in the bank. Truegain Pty Ltd has been wound up as a result of the PFAS contamination. It was a profitable company before the PFAS contamination actions.
On 22 June 2020, the defendant sent an email to Mr Hartwell stating that: Re your other emails concerning particulars on the companies. As I stated all are not operational and really have never generated income at all. I have asked my accountants to provide what is available and I will forward within the week.
In July 2020, the EPA issued letters to 32 Australian banks and financial institutions requesting details of bank accounts held for the defendant, Truegain, Donpat, Belham, JM&BP and Glowbye. The responses received by the EPA included the following: 1. AMP Bank Limited provided a response identifying an account under the name of the defendant created in March 2008, but stated that it was not active; 2. the Commonwealth Bank of Australia (Commonwealth Bank) provided a response identifying several accounts held for the defendant, Truegain, Donpat and JM&BP; and 3. Suncorp provided a response identifying an account held for Truegain between 2011 and 2013.
On 6 August 2020, the EPA gave a notice under s 191 of the POEO Act to the Commonwealth Bank (notice no 1598377), requiring copies of financial records and information in respect of the defendant, Bellham, Donpat, Glowbye, JM&BP and Truegain. On 26 August 2020, the EPA received a response from the Commonwealth Bank to notice no 1598377. The response identified a number of bank accounts held by the Commonwealth Bank for the defendant, Donpat, JM&BP and Truegain, and did not identify any accounts held for Glowbye or Bellham. The information provided by the Commonwealth Bank is summarised in the following table: Account Name BSB and Account Number Account Type Date Opened Date Closed Last recorded balance/date Signatory / Authorised Operator Donpat Investments Pty Ltd. xxxxxxxxxx19 DDA - Business Transaction Account 24/04/15 N/A $713.90 as at 31 July 2020 Robert Lenard Pullinger JM & BP Superannuation Fund Pty Limited as Trustees for JM & BP Superannuation Fund xxxxxxxxxx 51 DDA - Cwlth Direct Investment 23/09/15 N/A $116.53 as at 23 March 2020 Robert Lenard Pullinger and Jane Mulvihill Truegain Pty Ltd xxxxxxxxxx 27 DDA - Business Transaction Account 07/03/13 8/07/19 Nil Robert Lenard Pullinger and Paul Andrew Lucas and Mcrae Denis Truegain Pty Ltd xxxxxxxxxx 48 DDA - Business Transaction Account 19/06/00 6/08/18 Nil Robert Lenard Pullinger and Paul Andrew Lucas Truegain Pty Ltd xxxxxxxxxx13 DDA - Cheque Account Not Bearing Interest 22/03/00 17/11/17 Nil Robert Lenard Pullinger and Paul Andrew Lucas Truegain Pty Ltd xxxxxxxxxx 20 DDA - Business Transaction Account 18/03/13 14/08/14 Nil Unable To Confirm

[38]

On 28 September 2020, Bacchus Associates provided information and records to the EPA in response to notice no 1594805 given to it under s 191 of the POEO Act. Bacchus Associates informed the EPA that: 1. it had acted as an external accountant for the defendant and Truegain from 2005 until 2016 when Truegain was placed into liquidation; 2. the most recent tax return prepared by Bacchus Associates for the defendant was for the year ending 30 June 2016, and it provided a taxation estimate showing a taxable income of $154,201 and tax payable of $45,001.37; 3. "[f]ollowing the appointment of the liquidator to Truegain, Bacchus [Associates] had undertaken very limited work for [the defendant] or his related entities"; and 4. it otherwise: 1. did not have in its possession any bank statements held individually or jointly by the defendant for the period 1 July 2012 to 28 September 2020; 2. did not prepare any income tax returns for the defendant after the year ending 30 June 2016; 3. did not have in its possession any statements from any shareholding or "financial instruments" for the defendant from 1 July 2018; 4. did not have in its possession, nor did it prepare, any financial statements for any self-managed superannuation fund associated with the defendant between 1 July 2018 and 28 September 2020; and 5. did not have in its possession any records of annual statement for any superannuation fund associated with the defendant between 1 July 2018 and 28 September 2020.
From September 2020, the EPA gave further notices pursuant to s 191 of the POEO Act requiring the provision of information and records as part of the investigation into the defendant's financial circumstances, and received responses to those notices summarised as follows: Notice Number and date Recipient Response date Response summary Notice 1600824 given 28 September 2020 AMP Bank Limited 15 October 2020 No record of any bank accounts held for the defendant or Truegain (either individually or jointly) for period of 1 January 2008 to 28 September 2020 Notice 1600967 given 28 September 2020 Bank Australia Limited 6 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600972 given 28 September 2020 Westpac Banking Corporation 9 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600905 given 28 September 2020 Capital Finance Australia Limited 12 October 2020 No record of any accounts held for Bellham, Donpat or JM & BP (either individually or jointly) for the period of 1 June 2012 to 28 September 2020. Several commercial hire purchase accounts identified for Truegain, with Glowbye and the defendant as guarantors Notice 1600936 given 28 September 2020 Customer Owned Banking Association Limited 17 November 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600945 given 28 September 2020 Colonial First State Investments Limited 7 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600941 given 28 September 2020 Cuscal Limited 13 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600921 given 28 September 2020 HSBC Bank Australia Limited 2 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600959 given 28 September 2020 Macquarie Bank Limited 12 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600971 given 28 September 2020 Members Equity Bank Limited 12 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600917 given 28 September 2020 RAMS Financial Group Pty Ltd 2 October 2020 No record of any bank accounts held for the defendant, Truegain, Bellham, Donpat, Glowbye or JM & BP (either individually or jointly) for period of 1 July 2012 to 28 September 2020 Notice 1600906 given 28 September 2020 Rural Bank Limited No response received N/A Notice 1600841 given 28 September 2020 Suncorp Metway Limited 25 November 2020 No record of any bank accounts held for the defendant or Truegain, (either individually or jointly) for period of 1 January 2010 to 28 September 2020 Notice 1600976 given 30 September 2020 Jamieson Louttit Associates (Liquidator appointed for Truegain) 18 November 2020 Response attached Liquidator's annual reports to creditors, minutes of meetings of creditor, annual administration returns and presentation of accounts statements Notice 1601025 Knight Frank (QLD) Pty Ltd 22 October 2020 Knight Frank (QLD) Pty Ltd undertook a campaign in March 2019 for the sale of 66-108 Watsons Road, South Ripley owned by Bellham but the property did not sell. RayWhite Special Projects were the current agents as the date of the Notice Notice 1602521 Ray White (Real Estate) Pty Ltd 21 December 2020 and 8 February 2021 Ray White (Real Estate) Pty Ltd act for the mortgagee (Benkath Nominees Pty Ltd) who is exercising power of sale over 66-108 Watsons Road, South Ripley which is owned by Bellham. The property was yet to be sold as the date of the Notice Notice 1602526 given 5 November 2020 The Holidays Collection Holdings Pty Ltd 14 December 2020 No rental properties identified in the notice and managed by The Holidays Collection Pty Ltd are owned by the defendant, Truegain, Donpat, JM & BP, Bellham or Glowbye Notice 1601979 given 27 October 2020 Gevin Nominees 11 November 2020 Gevin Nominees provided information and records including trust account ledgers in respect of the mortgage secured over the Premises, two property valuations for the Premises dated 13 September 2018 and 20 February 2019 and a copy of a Deed of Guarantee and Indemnity signed by the defendant Notice 1601957 given 26 October 2020 and Notice 1602517 given 5 November 2020 Fidelity Capital 30 November 2020 Fidelity Capital provided information and records including details of the amount secured by unregistered mortgage over the Premises which was $846,413.13 as at 30 November 2020. Notice 1602516 given 5 November 2020 Benkath Nominees Pty Ltd 14 January 2021 Benkath Nominees holds a mortgage over 66-108 Watsons St, South Ripley owed by Bellham. Bellham has defaulted on the loan and the amount owing is in excess of $3,910,000. The mortgagee is exercising power of sale and has entered into a Call Option Deed where the proposed purchase price is $3,300,000.

[45]

Ms Marler

Ms Marler gave evidence in relation to the level of complexity in removing PFAS from the premises in 2018: Q. In order to remove material from the subject site that's potentially contaminated with PFAS, do you agree that that's not a simple matter? A. The removal itself is quite simple. It's what to do with the waste that becomes complicated. … Q. If the defendant, for example, is directed to remove and lawfully dispose of water contaminated with PFAS, do you accept that that's not a simple matter? A. No, there are - there are options to deal with the waste. Q. The options are to dispose of it to the Homebush facility, that's it isn't it? A. Or there was another mobile treatment - my, my understanding is there was another piece of equipment that was licenced at the time to do that. … Q. Prior to June 2018, there were actually no facilities in New South Wales that could accept liquid waste contaminated with PFAS, is that right? A. In terms of premises based? Q. For disposal. A. Yes.
Ms Marler said as follows in relation to the demand for PFAS mobile waste treatment in NSW in the middle of 2018: A. Look it was very much an emerging issue at that time. I mean we'd had the experience of Williamtown et cetera, and PFAS was very much becoming a topic of interest. But in terms of demand, not being driven by the EPA necessarily. It was very early days for us in terms of managing this issue.
Ms Marler gave the following evidence in relation to mobile waste treatment facilities for PFAS in 2018: Q. Other than the Homebush Bay facility, which you say there's also a mobile facility at the Homebush Bay liquid treatment plant, other than the facility the subject of the licence variation I've just shown you and the mobile waste treatment facility at that site, can you name any of the other facilities in New South Wales that were able to accept PFAS waste in 2018? A. I recall there may've been one other mobile plant that was licenced at the time, in addition to the one that was on the Cleanaway site during that period. Other than that, no. Q. With a mobile waste treatment plant, is it usual practice for [it] to be located at the facility where the waste is … A. They can be located anywhere. So, the only rule is they can't be located onsite for any more than six months in 12 months.
Ms Marler gave the following evidence about giving the varied clean-up notice and the expedition of EPS' application for an EPL to remove waste: Q. So when you issued the varied cleanup notice on 18 May, you required the defendant to do all those things by 29 June 2018, about a six week period. Do you agree with that? A. Yes. Q. So in that six week period, the defendant had to have EPS obtain an EPL, mobilise their equipment to the site. Do you agree with that? A. Yes, yep. … Q. And process water at a rate of 50 kilolitres a day? A. Yes. Q. And you thought that that could be achieved within six weeks, did you? A. I'm not aware of when they - when EPS actually lodged their [EPL] application. … Q. …[t]he EPS lodged their application on 1 May. A. Yep. And we were certainly doing everything we could to expedite that, that application. … Q. Did you turn your mind to extending the time for compliance under direction 6, having regard to the fact that EPS didn't obtain an EPL until 29 August 2018? A. No.

[50]

The defendant, Mr Pullinger

Mr Pullinger's evidence in relation to the varied clean-up notice included the following: Q. In relation to the variation of the notice in 2018 that notice was varied to match the timetable for clean-up works that you formulated with Mr Matthews and EPS, wasn't it? A. I think that's correct, yes. Q. Did you at any time seek to vary that clean-up notice? A. I wrote to the EPA on a number of occasions. I'm not sure whether I sought to vary it or not, to be frank with you. I can't recollect. Q. It's fair to say you don't recall making a formal application to vary the notice? A. I'd say I don't recall, that's fair. … Q. Did you ask the EPA for more time to comply when you became aware of the delay in receiving the licence? A. EPS were dealing with the EPA on that issue and I - I just can't recollect whether I got involved or not, to be honest with you. Q. Did you ask for more time to comply with the clean-up notice when you became aware that EPS didn't have a licence yet? A. No, not that I can recollect, no. Q. When you engaged EPS you were aware that they didn't have the relevant licence, weren't you? A. Correct.
The defendant also gave evidence in relation to the money he spent in attempting to clean-up the premises and to comply with the EPA notices, including as follows: Q. --you say that you spent an estimated $2.5 million, in attempting to clean up the Rutherford land and to comply with the EPA notices and an earlier prevention notice? A. Correct. … Q. So you've given evidence, that you paid Mr [Vujkovic], … [K]osta, about $450,000? A. Yep. Q. And you paid Mr Matthews about $250,000? A. Correct. Q. And do you recall that the contract with EPS, the total contract, was for about $302,000? A. No that's incorrect. I think it was - there was a bit more than … I feel the $300,000 was - I, no I, I, I'm just I'm not sure on it, but I don't think that's right. Q. … do you agree that you paid just over, in terms of the amount you actually paid to EPS, it was just over $200,000? A. Yes that's correct. Q. About $203,000? A. With 115 [thousand] owing. … Q. Is it your evidence that that $2.5 million included legal fees? A. Absolutely. Q. And it also included your … living expenses, a salary if you like, to yourself? … A. --that and my wife, yeah so we could live yeah-- Q. Of about 250,000? All right? A. Something like that, I can't remember to be frank with you. Q. So it wasn't solely related to the physical clean-up of the site? A. I'm sorry but, you know, when, when you have expenses like that, and you're, you're spending it on legal fees, it's to do with the clean-up of the site. Those legal fees were essentially looking after my interests in the site, and looking to try and work with the EPA in it. … Q. Regardless of whether the total amount [of the EPS contract] was 302,000, or 300 and something else thousand, you agree that if you had been able to pay that contract in its entirety, that the clean-up notice would've been complied with? In your understanding? A. Can I just say this, absolutely. When - and just to explain that absolutely your Honour, with regard to that issue, I borrowed $1.2 million, of which, once you take out interest and then payments to all and sundry, it ended up at 950, $942,000.

[51]

The direction 7 charge: alleged offence against s 91(5) of the POEO Act

In relation to the direction 7 charge, the offence against s 91(5) of the POEO Act requires proof of the following elements: 1. that the EPA is the appropriate regulatory authority (element i); 2. that the notice was given to the owner or occupier of the site (element ii); 3. that the authority reasonably suspected a pollution event had occurred or was occurring (element iii); 4. that the clean-up action and time for compliance are specified in the notice (element iv); and 5. whether the defendant had a reasonable excuse for not complying with the clean-up notice (element v).
Proof of element (ii) was not in issue; it was agreed that the defendant was the owner and occupier of the site. Nor was proof of element (iv) in issue.
Elements (i) and (iii) were in issue in relation to the defendant's challenge to the validity of direction 7 of the varied clean-up notice. However, the defendant accepted that if he failed in his challenge to the validity of direction 7, he failed to comply with direction 7 of the varied clean-up notice. Element (v) was also in issue.
In Sydney Drum Machinery (No 4) at [259] Craig J said as follows in relation to the relationship between s 91 (concerning clean-up notices) and s 256(1) of the POEO Act (concerning the proof of a reasonable excuse) as follows: When ss 91 and 256(1) are read together, an offence against s 91 must be determined in the following manner: 1. the prosecutor is required to prove beyond reasonable doubt that the nominated defendant has failed to comply with a clean-up notice validly given; if that is proved, then 2. the defendant is required to prove, on the balance of probabilities, that there was a reasonable excuse for failing to comply. If the defendant succeeds in so doing, that defendant will not be guilty of the offence charged. However, if the defendant does not prove that it failed to comply with a notice without reasonable excuse, that defendant will be guilty of the offence as charged.
I have adopted the approach of Craig J in Sydney Drum Machinery (No 4) at [259] in relation to a charge against s 91(5) of the POEO Act, namely, that the prosecutor is first required to prove beyond reasonable doubt that the defendant has not complied with the varied clean-up notice and the prohibition notice; and secondly, that the defendant is required to prove, on the balance of probabilities, that there was a reasonable excuse not to comply with the notices.

[54]

Defendant's submissions

Pursuant to s 91 of the POEO Act, the appropriate regulatory authority may by notice in writing direct certain persons to take specified clean-up action where the authority reasonably suspects that a pollution incident has occurred or is occurring. The defendant referred to the definitions of 'clean-up action' and 'pollution incident' in the Dictionary to the POEO Act and submitted that on a proper construction of s 91 and the definition of 'clean-up action' in the Dictionary, in order for a clean-up notice to be valid, there must be a connection between the "pollution incident identified in the [initial clean-up] notice and the clean-up action required". The defendant submitted that the initial clean-up notice (given 5 June 2017) identified the pollution incident in respect of which the defendant was directed to take clean-up action in the background section of the initial clean-up notice, and submitted that the pollution incident the subject of the initial clean-up notice was "the likely discharge, in the event of rainfall, of the contaminated liquids within the [p]remises [s]pill [c]ontainment [s]ystem via stormwater drains located on the premises to the environment". The defendant submitted that at that time, on 5 June 2017 there was "no suspicion of a pollution incident in relation to the liquids contained in the above ground tanks".
The defendant submitted that the varied clean-up notice (given on 18 May 2018) likewise did not identify any pollution incident in relation to the above ground tanks. Like the initial clean-up notice, the varied clean-up notice focused on a discharge, in the event of rainfall, from the spill containment system. There was no express reference to a likely spill from the above ground tanks. Accordingly, the defendant submitted, there was no connection between the "pollution incident" identified in the varied clean-up notice and direction 7 of the varied clean-up notice, and that direction 7 was therefore invalid.
In closing submissions, counsel for the defendant re-iterated that there was "no reference at all to a potential spill from the above ground tanks" in either the initial clean-up notice or the varied clean-up notice: [the background in the varied clean-up notice] refers to the [clean-up notice] that had been issued as one would expect when what is being done is variation, …There is a reference to the above ground tanks and a reference to minimal or no maintenance of the above ground tanks, and the structural integrity being uncertain, but in D(e), is the identification of the pollution incident, which is the inability of the contaminated liquid to be contained on the premises in the event of rainfall. Again, it's a spill from the spill containment system in the event of rainfall, it's not got anything to do with the above ground tanks. The EPA hasn't expressed there any description of a pollution incident, for example there's no reference to a failure or a spill from the above ground tanks. Only that liquid has been pumped into them, and that the integrity is uncertain.
Counsel for the defendant expanded on the "no connection" point as follows (emphasis added): SIMS: … there's no expression in that varied clean-up notice by the EPA of a likely spill from the above ground tank. HER HONOUR: Except that in background D(e), "as a consequence of which there is likely to be" the language of likelihood appears in subparagraph (e). SIMS: Yes, in the event of rainfall, not in the event of a failure of the tank. HER HONOUR: Aren't the two the same really, ultimately? … … SIMS: I asked [Mr Howard] some questions about the above ground tanks which I think they're mostly all steel tanks, maybe some plastic ones, that are above ground; they don't fill from rainwater. They were previously containing waste oil or products or process tanks for the business. So they're not rain water tanks; they're waste oil recycling tanks. I was careful with Mr Howard to distinguish between those above ground tanks and the spill containment system. … HER HONOUR: So what you're saying is there is no relationship at all between rainfall incident and above ground tanks? SIMS: Yes, that's right. So the above ground tanks were full of rainwater that had been put there by Mr [Vujkovic], pumped there to avoid a spill. But the concern about discharge from the site, in the event of rainfall, was from the spill containment system which was comprised of the bunded areas and the underground tank and pits. HER HONOUR: So it's your submission that the above ground tanks, throughout the charge period, were entirely neutral in terms of the likelihood of a pollution incident? SIMS: Yes …

[57]

Defendant's submissions

Further, in support of his challenge to the validity of direction 7, the defendant submitted that the prosecutor did not form a reasonable suspicion that a pollution incident had occurred or was occurring in relation to the above ground tanks. A jurisdictional prerequisite, it was submitted, to the "making" of a valid clean-up notice is the formation of a reasonable suspicion by the appropriate regulatory authority that a pollution incident has occurred or is occurring. This requires the prosecutor to establish that: (1) the appropriate regulatory authority subjectively formed the suspicion; and (2) objectively judged, the suspicion was reasonable, the reasonableness of the suspicion to be judged on the information available to the person who formed the suspicion at the time the suspicion was formed.
The defendant submitted that the prosecutor had not established that the delegate who gave the initial clean-up notice (Mr Hartwell) subjectively formed a suspicion that a pollution incident relating to the above ground tanks had occurred or was occurring. The initial clean-up notice sets out the background to the giving of the notice (some of which is extracted above at [14]). That was submitted to be the only evidence that could assist the Court in determining whether Mr Hartwell subjectively formed a suspicion about a pollution incident related to the above ground tanks and the basis for that suspicion, as the prosecutor did not call Mr Hartwell to give evidence. Further, the defendant submitted that the prosecutor had not established that the delegate who gave the varied clean-up notice (Ms Marler) subjectively formed a suspicion that a pollution incident relevant to the above ground tanks had occurred or was occurring at the time the varied clean-up notice was given. There was no expression of any such suspicion in the varied clean-up notice, and in her affidavit dated 3 December 2020, Ms Marler did not attest to the formation of any suspicion that a pollution incident had occurred or was occurring in relation to the above ground tanks.
While there was reference in the varied clean-up notice to liquids in the above ground tanks and uncertainty as to the structural integrity of the above ground tanks, there was no expression of a reasonable suspicion that a pollution incident in relation to those tanks had occurred or was occurring. The background in the varied clean-up notice (extracted above at [1716]), like that in the initial clean-up notice, referred to "a potential discharge of liquids from the spill containment system in the event of rainfall". The defendant submitted that there was no mention of concern, for example, in relation to a pollution incident in the event of failure of one or more of the above ground tanks.
Further, the defendant submitted that to the extent that the prosecutor is able to establish that it subjectively formed a suspicion in relation to the above ground tanks, objectively that suspicion was not reasonable in the circumstances, "the reasonableness of the suspicion [having to] be assessed on the basis of the information that was actually available to the person who formed the suspicion at the relevant time". There was no evidence in relation to the material or information that Mr Hartwell considered when issuing the initial clean-up notice, other than the notice itself. There was "some evidence from Ms Marler as to matters of which she was aware as at the date of affirming her affidavit", but it was difficult to distinguish which of those matters she was aware of at the time of issuing the varied clean-up notice. The matters referred to by Ms Marler in her affidavit were known to her at the time of issuing the varied clean-up notice: "[h]owever, none of those matters would give rise to a reasonable suspicion in relation to a pollution incident from the above ground tanks".
The defendant referred to the evidence relied upon by the prosecutor as supporting a "reasonable suspicion" in issuing the initial clean-up notice and the varied clean-up notice, some of which included the following: 1. the background to the initial clean-up notice some of which is extracted above at [14], including paragraph 19 which is expressed as an opinion; 2. a number of agreed facts; 3. part of the exhibit to Ms Lange's affidavit dated 4 November 2020 which included: 1. EPA inspection reports dated 21 March 2018, 22 March 2018, 23 March 2018, 26 March 2018, 3 April 2018, and 11 April 2018; 2. correspondence between Mr Matthews and Ms Lange dated 29 March 2018 regarding CTP, "proposed immediate plans for the site", and "medium plans ~ existing liquid waste legacy"; and 3. a report addressed to Ms Lange dated 11 April 2018 from the NSW Office of Environment & Heritage, titled "Report of Analysis" which included a table of test results of samples and chemicals found in the samples; 1. the affidavit of Ms Marler affirmed 3 December 2020 in which Ms Marler said: 1. "on 21 March 2018, I became aware of a pollution incident at the premises when EPA Officer Mark Hartwell informed me of observations made by EPA officer Jenny Lange of a discharge occurring at the [p]remises during her inspection on that day"; and "I understand from that discussion, and from reviewing the inspection report … prepared by Ms Lange, that a pollution incident was occurring involving contaminated liquids discharging from the [p]remises and which entered adjacent waters in Stony Creek"; 2. "[b]etween 21 March 2018 and 22 March 2018, [Tox Free] pumped out 63,240 litres of liquid waste from the System and transported and disposed of it at Cleanaway's wastewater plant at Homebush, NSW"; and 3. "[o]n 19 April 2018, I sent an email to [the defendant] conveying the severe weather warning for the Maitland area and directing him to empty the underground tank into the bunds"; "[o]n 19 April 2018, [Mr] Matthews replied to my email of 19 April 2018"; "[o]n 21 April 2018, [the defendant] sent a letter dated 20 April 2018 to me of the EPA"; "[o]n 22 April 2018, [the defendant] sent a letter dated 20 April 2018 to me"; on "23 April 2018, Mr Matthews sent an email to David Simm, Manager of Development for Maitland City Council, copying in myself and Jenny Lange of the EPA"; on "26 April 2018, the EPA gave Maitland Local Council notification pursuant to s 212C of the POEO Act that it intended to take action as the appropriate regulatory authority"; that on "27 April 2018, Mr Matthews sent an email to me"; on "27 April 2018, Mark Hartwell of the EPA attended a meeting with [the defendant], Mr Matthews and Maitland Council; and Mr Hartwell emailed to me that day a report on the meeting". 1. part of the exhibit to Ms Marler's affidavit (which was tendered) which included: 1. an email from Ms Marler to the defendant and Mr Matthews dated 19 April 2018 about a "Severe Weather Warning for Maitland" in which Ms Marler stated as follows: Can you take immediate action to empty the underground tank to the bunded area to ensure maximum capacity of the underground tank and continue to take all necessary action to prevent discharge off-site. 1. an email from Mr Matthews to Ms Marler dated 19 April 2018 in reply to the above email which stated as follows: We are in the best possible position, given the situation. The underground tank has been pumped dry with only the sludge remaining … 1. a letter from the defendant to Ms Marler dated 20 April 2018; 2. email correspondence between Mr Matthews, the defendant and Mr David Simms (manager, development & environment, Council); 3. a letter from Ms Marler to Mr Evans at Council dated 18 April 2018; 4. an email from Mr Matthews to Mr Hartwell and Ms Lange dated 27 April 2018, titled "Site update"; and 5. an email from Mr Hartwell to Ms Marler and Ms Lange dated 27 April 2018, titled "Update on 62 Kyle Street - Meeting with Bob Pullinger/Steven Matthews and Maitland Council". The defendant submitted that none of the evidence relied upon by the prosecutor referred to any "pollution incident" in relation to the above ground tanks.
Further, the defendant submitted, it was necessary to address the Office of Environment and Heritage's Report of Analysis titled "Report 201800140" dated 11 April 2018 (the report of analysis) which was relied on by the prosecutor and admitted on a limited basis over objection. The report of analysis included details of three samples, GS-01, SC-02 and SC-03, and the prosecutor submitted it demonstrates "PFAS was available on the site". The prosecutor had asked the Court to infer that the three samples were taken on 5 April 2018 from Stony Creek and Gardiner Street which could be seen relative to the premises in the satellite photograph (reproduced above at [45]). The defendant submitted that without a more precise identification of the location from which the samples were taken, the samples could not found any basis for a reasonable suspicion of a pollution incident from the premises. In relation to the above ground tanks, it was also relevant that the defendant "locked off" those tanks at the request of the prosecutor on 25 July 2017.
The defendant also referred to the background to the varied clean-up notice which included that there had been "no or minimal maintenance of the above ground tanks" since September 2016, and that the structural integrity of the tanks was "uncertain". The lack of maintenance of tanks for a period of less than two years was submitted not to be sufficient to form a reasonable suspicion that there was a "real and not remote chance or possibility that there will be a leak, spill or escape of liquid from those tanks". That fact and the consequential uncertainty about the structural integrity of the tanks would not cause a reasonable person to suspect a pollution incident in relation to the tanks. In any event, the above ground tanks were within bunded areas "which were designed to have sufficient capacity to retain liquids in the event of failure". Accordingly, there could have been no reasonable suspicion of a pollution incident in relation to the above ground tanks on 18 May 2018 when direction 7 was given.
Ms Sims submitted as follows: … at [197] in Sydney Drum Machinery [(No 4)], his Honour referred to previous authorities, where the word "likely" in the definition of a pollution incident had been considered, and noted that the word likely" had been taken in those previous authorities, or at that previous authority, to mean real and not remote chance or possibility. Then using that formulation, his Honour concluded that the reasonable suspicion … is that there is a real and not remote chance or possibility that there will be a leak, spill or escape arising from the incident that occurred or the circumstances that existed. The expression of a likely leak or spill in the varied cleanup notice is the inability to be contained in the event of rainfall … not the failure of a tank. … to the extent that there was a reasonable suspicion formed by an officer of the prosecutor, in relation to the varied cleanup notice, it was solely concerned with a leak from the spill containment system in the event of rainfall, and not a leak in relation to the above ground tanks. …

[58]

Prosecutor's submissions

In relation to whether the prosecutor had a reasonable suspicion that a "pollution incident" had occurred or was occurring in relation to the above ground tanks, the prosecutor submitted that the evidence comfortably satisfied the legal test of reasonable suspicion held by the EPA at the time the initial clean-up notice was given on 5 June 2017, and varied on 18 May 2018. In relation to the initial clean-up notice, the basis for the EPA's reasonable suspicion were the factual matters that came to the notice of the EPA as set out in the initial clean-up notice. Those factual matters were submitted to demonstrate that, on or before 5 June 2017, the EPA, by its officers, formed a reasonable suspicion that the presence of contaminated liquid in the premises' spill containment system, and the inability of that system to contain the contaminated liquid in the event of rainfall, constituted a set of circumstances as a consequence of which there was likely to be a leak, spill or other escape of a substance and as a result of which pollution was likely to occur.
The prosecutor submitted that the reasonable suspicion held by the EPA at the point of giving the initial clean-up notice was supported by a "holistic view of the totality of the evidence" in the proceedings and which was available to the EPA as at 5 June 2017, including: 1. the physical characteristics of the premises; 2. the history of scheduled activities at the premises; 3. the presence of 200,000 L of waste oil and 60,000 L of PFAS-contaminated waters on the premises as at 8 September 2016 and the lack of evidence that any of this waste was transported or disposed of from the premises between then and 5 June 2017; and 4. the defendant's email of 5 April 2017 to the EPA stating that the "main southern tank farm bund was approximately 80% full and others are approximately 50% full".
The EPA's reasonable suspicion at the point of variation of the initial clean-up notice (18 May 2018) was likewise submitted to be supported by a "holistic view of the totality of the information available to the EPA at the relevant time", including the matters noted in relation to the physical characteristics and historical uses of the premises, as well as more temporally proximate factual matters: 1. Ms Lange's inspection on 1 September 2017, including admissions by the defendant in relation to the continuing presence of liquids in the spill containment system; 2. 42 mm of rain on 21 March 2018 and 110.8 mm on 22 March 2018 at Maitland Airport due to the occurrence of a significant rainfall event on 21 March 2018 as a result of an East Coast low pressure system; 3. Ms Lange's inspection on 21 March 2018, including sample results showing presence of PFAS at elevated levels at the discharge point of the spill containment system (but not upstream); 4. Ms Marler becoming aware of the pollution incident on 21 March 2018; 5. Ms Marler taking emergency clean-up actions on behalf of the EPA by engaging Tox Free to pump out 63,240 L of liquid waste from the spill containment system; 6. the EPA's inspections on 22, 23 and 26 March 2018; 7. Mr Matthews letter of 29 March 2018 containing implied admissions made by an agent of the defendant, with ostensible authority, as to the risk of a pollution incident; 8. the EPA's inspection on 3 April 2018; 9. sampling on 5 April 2018 showing the presence of PFAS; 10. the EPA's inspection on 11 April 2018; and 11. correspondence between Ms Marler, Mr Matthews and the defendant "implicitly accepting the presence of pollution risks at the [p]remises".
The prosecutor submitted that it in light of that evidence, it had established that in giving both the initial clean-up notice and the varied clean-up notice, the EPA had a reasonable suspicion that a pollution incident had occurred or was occurring in relation to the above ground tanks.

[60]

Defendant's submissions

In relation to whether the prosecutor was the appropriate regulatory authority in relation to the above ground tanks, the defendant referred to the prosecutor's contention that it was the appropriate regulatory authority on 18 May 2018 (the date the varied clean-up notice was given) because, on that date, the premises were being used for the scheduled activity of waste storage, namely storage of more than 60 tonnes of waste oil and more than 5 tonnes of liquid waste. The defendant submitted that the prosecutor had not identified any evidence to establish that the scheduled activity was being carried out on the premises as at that date.
In relation to the agreed fact that "the EPA is the appropriate regulatory authority and may institute proceedings for offences against the [POEO] Act: s 217(1)", the defendant submitted that the "subject of this … is clearly the [p]rosecutor's power to institute proceedings for an offence under the POEO Act". The agreement was that "the [p]rosecutor may institute the subject proceedings". In relation to the agreed fact that "at the time the [initial] [c]lean-[u]p notice was issued the EPA was the appropriate regulatory authority as the [p]remises was still subject to the EPL under s 6(1) of the [POEO] Act", the defendant said that it was agreed that the prosecutor was the appropriate regulatory authority on the date that the clean-up notice was given, at which time the Truegain EPL was extant. However, by the time the varied clean-up notice was given, the EPL had been revoked. On the last day of the hearing, Ms Sims orally submitted that s 6 of the POEO Act "has the consequence that as circumstances change the appropriate regulatory authority may change", and that "to the extent that [the agreed fact] refers to the EPA as an appropriate regulatory authority … [that] is not a fact but a legal conclusion and the factual basis for that legal conclusion being whether or not there was a scheduled activity conducted on the premises on the relevant date is a disputed fact". Ms Sims then submitted that if the Court does not accept her submissions, she seeks leave pursuant to s 191 of the Evidence Act to "traverse the fact", and submitted that "in relation to the above ground tanks, the prosecutor was not the appropriate regulatory authority". Ms Sims further submitted that: … there is an ability in subs (2) to seek leave to effectively traverse, that is contradict or qualify an agreed fact. The factors that are relevant to consider are set out in s 192 …
In relation to the factors in 192(2) of the Evidence Act, Ms Sims submitted as follows: SIMS: The agreement of the fact, as I said, is that the subject matter in para 2 is in relation to s 217 of the Act. There was a proposed agreed fact in relation to whether the premises was whether a scheduled activity was conducted on the premises and that fact was disputed. So, the context in which the agreement was reached was that the defendant was disputing a fact, being whether or not the proceedings were scheduled - the defendant was disputing the fact that was offered by the prosecutor that a scheduled activity was conducted on the premises. In the context of having disagreed that fact, it would be unfair to rely on para 2 to prevent the defendant from disputing that fact about the scheduled activity. … SIMS: Nature of the proceedings, obviously criminal proceedings, serious, and the defendant shouldn't be - the nature of the proceedings in the relevance of this matter is a matter that the prosecutor is required to prove and the defendant is entitled to put the prosecutor to proof on it. So para C, the importance of the evidence is that if the - it's critical to the charge because one of the grounds for invalidity is that - of direction 7 is that the prosecutor wasn't the appropriate regulatory authority in relation to the subject matter of that direction.
The defendant also referred to the definition of the activity of "waste storage" in cl 42(1) of Schedule 1 to the POEO Act as "the receiving from off site and storing (including storage for transfer) of waste", and submitted that the activity to which cl 42 applies is declared to be a scheduled activity if certain thresholds for different waste types are met. The relevant threshold for the storage of waste oil was submitted to be 60 tonnes (cl 42(2)(b)(iv)), and for the storage of liquid waste 5 tonnes (cl 42(3)(a)). However, cl 42 does not apply to the storage of stormwater: cl 42(2)(a). To the extent that there was water within the above ground tanks, bunds and "underground tanks" and pits on 18 May 2018, the defendant submitted that the water was stormwater, and hence cl 42 did not apply.
Further, the defendant submitted, prior to entering liquidation in September 2016, Truegain carried out the scheduled activity of waste storage at the premises; however, after September 2016, no waste was received from offsite. While efforts were being made to clean-up the premises, including removing waste, the scheduled activity of "waste storage" was not carried out. The defendant accepted that the prosecutor was authorised to carry out the functions of the appropriate regulatory authority for the purposes of the POEO Act to ensure the clean-up and removal of the contaminated liquids within the spill containment system at the premises. This is because on 26 April 2018, by letter addressed to Mr David Evans, general manager of Council, Ms Marler gave notice to Council pursuant to s 212C of the POEO Act that it had carried out functions in relation to the spill containment system and proposed to continue that work (the s 212C notice) (agreed fact). However, that notice did not relate to the above ground tanks, a different "work" to the spill containment system. The s 212C notice also expressed doubt about who was the appropriate regulatory authority (ARA) in relation to the premises: Who is the ARA for the Premises? When the licence was revoked it is possible, that at the time Maitland City Council (Council) became the Appropriate Regulatory Authority (ARA) to regulate the Premises for the purposes of the Protection of the Environment Operations Act 1997 (the POEO Act). However, given the quantity of waste on the premises it remains unclear if Council or the EPA is the ARA.
Ms Sims submitted as follows in relation to the s 212C notice: Ms Marler refers to a pollution incident in March 2018. And … gives a notification pursuant to s 212C of the [POEO Act] that the EPA intends to carry out the full functions of the appropriate regulatory authority to ensure the clean-up and removal of the contaminated liquids within the spill containment system at the premises. … turning to 212C, the section applies if a regulatory authority exercises functions relating to an activity or work that is not authorised or controlled by an EPL … Ms Marler was writing to the council because the EPL had been revoked, and she wasn't sure whether or not the EPA was the appropriate regulatory authority. [Subsection] (2) requires the regulatory authority to notify the appropriate regulatory authority of the functions that it has exercised and of any functions that it proposes to continue to exercise or to cease to exercise… And [subsection] (3) authorises the authority in those circumstances to continue to exercise the functions that it has notified. … The council didn't write back to the EPA and say, "No we'd prefer if you didn't exercise those functions." … It applies where the authority has exercised functions in relation to an activity or work, and in my submission the function exercised by the EPA that is the subject of the letter, is a function in relation to a work, and the work is the spill containment system on the premises. Because that is the notification that was given. … So [in subsection 6(1) of the POEO Act], the EPA is the [appropriate regulatory authority] except as provided by the section, and then there's two exceptions. … Nothing in subsection 6 arises … [subsection] (2). … Maitland Council in this case, is the appropriate authority for non-scheduled activities, except in relation to (a) licences, and there was no licence operating in relation to these premises. And (b) also relates to licences. (c) relates to activities carried on by public authority which doesn't arise here. (c1) network operator doesn't arise, and (d) is referring to [subsection] (3) which doesn't arise. … the only matter that really arises is whether an activity was carried on at the premises that was a scheduled activity or not. So if it's a non-scheduled activity … then the local council is the regulatory authority. If it is a scheduled activity, then [subsection] (2) doesn't apply and it falls into [subsection] (1). So … if the circumstances change, the regulatory authority can change. Firstly, one of the circumstances is whether or not an EPL applies to the site, and that was a relevant change …, and is referred to in Ms Marler's letter … the second change is, whether or not a scheduled activity was carried out on the premises.

[61]

Prosecutor's submissions

The prosecutor's primary position was that leave should not be granted to the defendant pursuant to s 192 of the Evidence Act to traverse an agreed fact "because it would be unfair to do so to the prosecutor in circumstances in which we did not become aware that there was an application to traverse an agreed fact until the defence closing".
Further, Ms Berglund submitted that s 212C of the POEO Act has to be read in conjunction with s 212D: … [Section [212D] provides that even if a regulatory authority is required to exercise functions or ceases voluntarily under 212C (3) or (4), that authority can continue to exercise any functions, and … can continue to exercise any functions and then … 212C (3) is what says that they can continue to exercise the functions as long as if they become aware of the issue they've notified the correct authority. … 212D says the regulatory authority, even if 212C is triggered which is questionable given that the EPA did not become aware which is a prerequisite to the triggering of 212C, even if it was aware then 212D says that it can continue to exercise those functions. … there's a legal argument that even if the EPA was not the correct authority that doesn't render the varied clean-up notice invalidly issued, because it was simply continuing to exercise functions albeit as the incorrect authority. And it's not conceded that it was an incorrect authority… … it commenced to issue that when it issued the clean-up notice and continued to exercise that authority at the stage of the varied clean-up notice. … even if there was an argument that it was not the appropriate regulatory authority, the combination of 212(3) and 212D mean that that would not result in the direction 7 being invalid.
Ms Berglund submitted that it was also agreed that the EPA was the appropriate regulatory authority on the date the initial clean-up notice was given (5 June 2017) as the premises were then still subject to the Truegain EPL.

[62]

Conclusion in relation to the validity of direction 7 of the varied clean-up notice

In Boddington v British Transport Police, [12] Lord Steyn said as follows in relation to a challenge to the validity of a by-law in criminal proceedings (at 664): There is no good reason why a defendant in a criminal case should be precluded from arguing that a byelaw is invalid where that could afford him with a defence. Sometimes his challenge may be defeated by special statutory provisions on analogy with the decision in Reg. v. Wicks [1998] A.C. 92. The defence may fail because the relevant statutory provisions are held to be directory rather than mandatory. It may be held that substantial compliance is sufficient. But, if an issue as to the procedural validity of a byelaw is raised, the trial court must rule on it.
In Cauchi, McClellan CJ of LEC said at [41]-[42]: 41. There are now a number of decisions in which it has been determined that an administrative decision which has no effect may be challenged in collateral proceedings, particularly proceedings in which the recipient of a notice or order is being prosecuted for a failure to comply with it: see Ousley v R (1997) 192 CLR 69 at 79-80 and 86-87, McHugh J at 100 and Kirby J at 146; Attorney-General (Commonwealth) v Breckler (1999) 197 CLR 83 at 108 and 131; see also the discussion in Cox & Hazell Pty Ltd v Gidney (1981) 1 NSWLR 468, in particular the judgments of Hope and Mahoney JJ. 42. It is plain that in circumstances in which an administrative decision has been made by a person, which is infected with jurisdictional error, which would include a failure to afford procedural fairness, that decision has no effect and is regarded in law as no decision at all: see Plaintiff S157/2002 v The Commonwealth of Australia (2003) 211 CLR 476.
In Sutherland v Benedict (No 4) at [9]-[10], Pepper J observed as follows in relation to a collateral challenge to the validity of a tree preservation order made under the Sutherland Shire Local Environmental Plan 2000: 9. It is open to Benedict to mount a collateral challenge to the validity of the TPO. In criminal proceedings in which an accused is charged with an offence contravening a statutory order or instrument, the accused may mount a collateral attack on the validity of the statutory order instrument (Gray v Woollahra Municipal Council [2004] NSWSC 112 at [51]-[112] and Liverpool City Council v Cauchi [2005] NSWLEC 675; (2005) 145 LGERA 1 at [41]-[42] and the authorities cited thereat). 10. The council bears the burden of proof in respect of Benedict's collateral challenge to the validity of the TPO (Selby v Pennings (1998) 102 LGERA 253 at 265 per Ipp J and 283 per Owen J).
In light of the authorities, I accept that it is plainly open to the defendant to mount a collateral challenge to the validity of direction 7 of the varied clean-up notice given on 18 May 2018. The timing of the challenge was unfortunate, it not having been foreshadowed by the defendant until day 3 of the hearing. However, the challenge having been made, I will proceed to consider it.
It arises then to consider the approach to be taken to the construction of the notice. In Melbourne Home of Ford Pty Ltd v Trade Practices Commission (No 3), [13] the Full Federal Court considered the validity of a notice given under s 155 of the Trade Practices Act 1974 (Cth). Brennan, Keely and Fisher JJ said as follows: … [n]otices are to be reasonably, not preciously, construed and the terms used in notices will ordinarily take their meaning from the commercial circumstances in which the notices are given.
In Ryding v Kempsey Shire Council, [14] Pain J considered a collateral challenge to the validity of a clean-up notice given under s 91 of the POEO Act, and at [16]-[17] said as follows: 16. There is no specific form for a written clean up notice identified in the POEO Act or Regulation except that s 91(1) refers to clean up action specified in the notice and to the period specified in the notice. … The POEO Act or Regulation does not specify that the type of pollution to be addressed must be identified in a clean up notice. The notice issued by Mr Nelson clearly contemplates a likelihood of water pollution as defined in the dictionary to the POEO Act given that the measures described are to prevent soil leaving the premises and entering the local stormwater system. The fact that Mr Nelson referred in the opening paragraph of the notice to pollution of adjacent properties, which is said by the Appellant to refer to the definition of land pollution in the POEO Act, does not mean the notice must be directed to land pollution only. While the opening words refer to pollution of adjacent properties that is general wording which could cover a range of pollution, including water pollution. 17. Clean up notices while provided for under statute are not intended to be drafted by lawyers but by officers of a regulatory authority who may or may not have legal training. Provided the notice is unambiguous and clear in what it seeks to achieve, as this does, an approach akin to strict legal drafting should not be applied. That imposes an unrealistic burden on those drafting such notices. …
In Maund v Shoalhaven City Council (Maund v Shoalhaven City Council), [15] Preston CJ of LEC upheld Mr Maund's challenge to the validity of a s 91 clean-up notice. In considering Mr Maund's challenge, Preston CJ of LEC took into account oral evidence at the hearing (at [23]) and four site investigation reports of Council at ([26]-[28]). The chief judge accepted two of the appellant's challenges to the validity of the clean-up notice, namely that Council had not formed the requisite subjective suspicion that a pollution incident had occurred or was occurring, and that even if Council had formed the subjective suspicion, there was no evidentiary foundation for the suspicion so as to enliven the power to give a clean-up notice.
Here, the first aspect of the defendant's challenge to the validity of direction 7 was that there was no connection between direction 7 and the "pollution incident" the subject of the varied clean-up notice. On the evidence before me, I am satisfied beyond reasonable doubt as to the existence of a relevant connection between direction 7 and the "pollution incident" the subject of the varied clean-up notice given on 18 May 2018: 1. Between October 2016 and mid-2019 (after the date of the varied clean-up notice), the defendant says he took steps to avoid discharge of contaminated water from the premises, including "pumping water from the underground tanks into the bunded areas or and pumping water from the underground tanks or bunded areas into the above ground tanks to create freeboard in the underground tanks and bunds". 2. After the initial clean-up notice was issued on 5 June 2017, the defendant says he continued to manage water on the premises "by pumping from the underground tank into the bunds and above ground tanks". 3. On 1 September 2017 during an inspection of the premises by EPA authorised officer Ms Lange, the defendant said that "the tank is pumped out into the existing tanks on site as they don't have any oil in them. They have been used to hold water from the bund areas"; that the "tanks have a capacity of approximately 3 million litres", and that the defendant "was requested to undertake an audit of the volume and capacity left in the tanks on site". 4. On 22 March 2018, Ms Lange inspected the premises and noted inter alia that "Steve Matthews proposed to Ms Lange that water in the tank farm bunds would then be pumped into tanks"; that Mr Matthews said that he "can't see the need as it had stopped raining and we have capacity in the tanks"; that Ms Lange informed Mr Matthews that the initial clean-up notice "required the removal of liquid, not pumping it around the premises" to which Mr Matthews replied "the wording of the notice does not say cannot move it around" (emphasis added). 5. On 23 March 2018, Mr Vujkovic and representatives of EPS advised that additional storage, being three 23,700 L tanks, would arrive at the premises after Easter 2018. 6. After March 2018, the defendant says that no more water was pumped into the above ground tanks. 7. On 3 April 2018, EPA officers again inspected the premises and Ms Lange made notes including the following: that Mr Matthews said that "he believes that there is roughly 3 ML of contaminated liquid on site with approximately 2 ML of PFAS contaminated liquid - this includes the spill containment system and the above ground tanks"; two 23,000 L poly-tanks were on the premises and "can be used as emergency storage of liquids" (emphasis added). 8. On 27 April 2018, Mr Matthews advised the EPA that following the rainfall event on 25 April 2018 and the premises receiving an estimated 25 to 30 tonnes of rainwater which had been pumped from the underground tank into a 55 tonne above ground tank, the underground tank had no liquid and there was approximately 90 tonnes of above ground storage. 9. The varied clean-up notice given on 18 May 2018 includes a background section which provides, amongst other things: at D(a), that the EPA understands that since the initial clean-up notice "was issued" on 5 June 2017, contaminated liquid from the spill containment system has been pumped into above ground tanks located on the premises and that these tanks are now full; at D(b), that the EPA understands that there has been minimal or no maintenance of the above ground tanks since a former occupier of the premises, Truegain, was placed in liquidation in September 2016 and that the structural integrity of the tanks is uncertain; and at D(e) that the inability of the contaminated liquid to be contained on the premises in the event of rainfall, constitutes a set of circumstances, as a consequence of which there is likely to be, a leak spill or other escape of substance, as a result of which pollution is, or is likely to occur. 10. On 18 May 2018, against this background, the EPA gave the varied clean-up notice to the defendant pursuant to s 110 of the POEO Act, requiring the action specified in direction 7, namely that by no later than 5pm on Friday 31 August 2018, the defendant "process, remove and lawfully dispose from the premises all liquids contained within all above ground tanks".
Accordingly, I do not accept the defendant's submission that there was no connection between direction 7 and the "pollution incident" the subject of the varied clean-up notice.
The second aspect of the defendant's challenge to the validity of the direction was as to whether the prosecutor had a reasonable suspicion that a pollution incident had occurred or was occurring in relation to the above ground tanks.
In Kempsey Shire Council v Slade (Kempsey Shire Council v Slade), [16] a case concerning ss 92 and 104 of the POEO Act, Biscoe J said at [20]-[21] as follows in relation to reasonable suspicion: 20. Legislatures often vest powers in administrative officers that are exercisable when the officer has a "reasonable suspicion" that specified factual circumstances prevail: Ruddock v Taylor [2005] HCA 48, 222 CLR 612 at [70]. In George v Rockett [1990] HCA 26, 170 CLR 104 at 115-116 the High Court considered a statutory power to issue a search warrant if "it appears to a justice, on complaint made on oath, that there are reasonable grounds for suspecting that there is in any" premises a prescribed thing. In a unanimous judgment, the High Court distinguished between suspicion and the firmer mental state of belief: Suspicion, as Lord Devlin said in Hussien v. Chong Fook Kam (1970) AC 942, at p 948, "in its ordinary meaning is a state of conjecture or surmise where proof is lacking: 'I suspect but I cannot prove.'" The facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown. … 21. In the context of a statutory power to stop, search and detain a person whom a police officer "reasonably suspects" of having a stolen thing, in R v Rondo [2001] NSWCCA 540, 126 A Crim R 562 at [53] Smart AJ (Spigelman CJ and Simpson J agreeing) concluded that the following propositions concerning "reasonable suspicion" emerge from the authorities (including George v Rockett): (a) A reasonable suspicion involves less than a reasonable belief but more than a possibility. There must be something which would create in the mind of a reasonable person an apprehension or fear of one of the state of affairs covered by [the statutory provision]. A reason to suspect that a fact exists is more than a reason to consider or look into the possibility of its existence. (b) Reasonable suspicion is not arbitrary. Some factual basis for the suspicion must be shown. A suspicion may be based on hearsay material or materials which may be inadmissible in evidence. The materials must have some probative value. (c) What is important is the information in the mind of the police officer stopping the person or the vehicle or making the arrest at the time he did so. Having ascertained that information the question is whether that information afforded reasonable grounds for the suspicion which the police officer formed. In answering that question regard must be had to the source of the information and its content, seen in the light of the whole of the surrounding circumstances.
In Sydney Drum Machinery (No 4) at [191]-[195], Craig J held that in order to found a reasonable suspicion, the facts upon which the suspicion is based must be sufficient to induce such suspicion in a reasonable person. At [194]-[197] Craig J noted the definition of "pollution incident" in the Dictionary to the POEO Act and said as follows: 194. Clearly, a subjective apprehension or fear is insufficient to found a reasonable suspicion. Whether a suspicion is reasonable is an objective question (McKinnon v Secretary, Department of Treasury [2006] HCA 45; 228 CLR 423 at 429 per Gleeson CJ and Kirby J). The determination of that question must be considered in light of all the facts known, or reasonably capable of being known, to the decision-maker at the time of making the decision (Ruddock v Taylor [2005] HCA 48; 222 CLR 612 at [40]). Those facts upon which the suspicion is based must, in order to found a reasonable suspicion, be sufficient to induce such suspicion in a reasonable person (George v Rockett [1990] HCA 26; 170 CLR 104 at 112). As was also observed in the latter case, it is the very nature of suspicion, as opposed to knowledge or belief, that proof is lacking (at 115). 195. The prosecutor submitted and I accept that facts reasonably grounding a suspicion may be quite insufficient to ground a belief. Those facts or circumstances upon which a reasonable suspicion is founded need not consist of admissible evidence (Environment Protection Authority v Multi-Fill Pty Ltd (1997) 93 LGERA 131 at 140; R v Rondo at [53]). 196. In the context of s 91 of the Act, the reasonable suspicion required is of a "pollution incident". It is convenient to repeat the definition of that phrase from the Dictionary to the Act as being: " … an incident or set of circumstances during or as a consequence of which there is or is likely to be a leak, spill or other escape or deposit of a substance, as a result of which pollution has occurred or is likely to occur." 197. The word "likely" in that definition is taken to mean a "real and not remote chance or possibility" rather than the more stringent requirement of being more probable than not (Pace Farm Egg Products Pty Ltd v Newcastle City Council [2006] NSWCCA 403; 151 LGERA 260 at [54]-[56]). Relevantly, the essential prerequisite to the exercise of power under s 91 is that the prosecutor, through its relevant office or officers, hold a reasonable suspicion that there is a real and not remote chance or possibility that there will be a leak, spill or other escape of liquid waste arising from the incident that occurred or circumstances that existed on 16 January 2012.
In Maund v Shoalhaven City Council, the chief judge at [16]-[18] referred to Craig J's explanation of reasonable suspicion in Sydney Drum Machinery (No 4) as follows: 16. In Environment Protection Authority v Sydney Drum Machinery Pty Ltd (No 4) [2016] NSWLEC 59, Craig J explained at [190] the requirement under s 91 of the POEO Act: "The prosecutor accepts that the formulation by the prosecutor, through its officers, of a reasonable suspicion that a pollution incident, as defined, had occurred or was occurring is a fact that must be satisfied before a valid clean-up notice could be given (Ryding v Kempsey Shire Council [2008] NSWLEC 306 at [14]). The section requires that a subjective suspicion be proved and that, objectively judged, the suspicion is reasonable." 17. As to the first element of the subjective suspicion, Craig J said at [191]: "The statutory requirement that there be a suspicion of a given state of affairs as a prerequisite to the exercise of a statutory power has been considered in a number of cases. In Queensland Bacon Pty Ltd v Rees [1966] HCA 21; (1966) 115 CLR 266, Kitto J said at 303: 'A suspicion that something exists is more than a mere idle wondering whether it exists or not; it is a positive feeling of actual apprehension or mistrust, amounting to 'a slight opinion, but without sufficient evidence', as Chamber's Dictionary expresses it." 18. As to the second element that the suspicion be reasonable, Craig J said at [192]-[194]: "Other descriptions of a 'suspicion' have been given. In R v Rondo [2001] NSWCCA 540; 126 A Crim R 562 at [53] Smart AJ (Spigelman CJ and Simpson J agreeing) said that a 'reasonable suspicion involves less than a reasonable belief but more than a possibility'. In State of New South Wales v Hunt [2014] NSWCA 47, Leeming JA (Barrett JA and Tobias AJA agreeing) said at [68] that a 'reasonable suspicion is a state of mind less certain than a belief'. In Goldie v Commonwealth of Australia [2002] FCA 433; 117 FCR 566, Gray and Lee JJ said at [5]: 'The context of the phrase 'reasonably suspects' suggests that something substantially less than certainty is required. Reasonable suspicion, therefore, lies somewhere on a spectrum between certainty and irrationality'. Clearly, a subjective apprehension of fear is insufficient to found a reasonable suspicion. Whether a suspicion is reasonable is an objective question (McKinnon v Secretary, Department of Treasury [2006] HCA 45; 228 CLR 423 at 429 per Gleeson CJ and Kirby J). The determination of that question must be considered in light of all the facts known, or reasonably capable of being known, to the decision-maker at the time of making the decision (Ruddock v Taylor [2005] HCA 48; 222 CLR 612 at [40]). Those facts upon which the suspicion is based must, in order to found a reasonable suspicion, be sufficient to induce such suspicion in a reasonable person (George v Rockett [1990] HCA 26; 170 CLR 104 at 112). As was also observed in the latter case, it is the very nature of suspicion, as opposed to knowledge or belief, that proof is lacking (at 115)."
The matters set out above at [192]-[195] in relation to the defendant's "no connection" submission also bear upon the question of the prosecutor's reasonable suspicion that a "pollution incident" had occurred or was occurring in relation to the above ground tanks. That material establishes that the EPA subjectively formed the suspicion and that objectively judged, the suspicion was reasonable. I have considered the reasonableness of that suspicion on the basis of information available to the person who formed the suspicion, namely Ms Marler. It is not to the point that the prosecutor did not call Mr Hartwell, who gave the initial clean-up notice, to give evidence.
I find beyond reasonable doubt that the prosecutor subjectively formed a suspicion in relation to the above ground tanks and that, objectively, that suspicion was reasonable in the circumstances. The varied clean-up notice is plain on its face that the prosecutor had formed a suspicion that a "pollution incident has occurred or is occurring" involving the above ground tanks. There was a real and not remote chance or possibility of a leak, spill or escape of contaminated liquid, including PFAS contaminated liquid, from the above ground tanks, the structural integrity of which had been clearly identified by the prosecutor in the varied clean-up notice.
As Biscoe J said in Kempsey Shire Council v Slade in relation to a reasonable suspicion, referring to the High Court in George v Rockett (George v Rockett) [17] , there is a distinction between suspicion and the firmer mental state of belief. And in R v Rondo, [18] Smart AJ (Spigelman CJ and Simpson J agreeing) said that emerging from the authorities, including George v Rockett, is the proposition that a reasonable suspicion involves less than a reasonable belief, but more than a possibility. A reasonable suspicion is not arbitrary, and the factual basis for the suspicion must be shown. Here, there was plainly some factual basis for the suspicion, those facts being sufficient to induce such suspicion in a reasonable person, somewhere on "a spectrum between certainty and irrationality", something more than "a mere idle wondering".
Taking a "holistic" view of the totality of the evidence which was available to the EPA as at 18 May 2018 when the varied clean-up notice was given, considered in light of all the facts known or reasonably capable of having been known to the EPA at that time, I am satisfied beyond reasonable doubt that the prosecutor had a reasonable suspicion in making direction 7 of the varied clean-up notice that a "pollution incident" had occurred or was occurring in relation to the above ground tanks.
The third aspect of the defendant's challenge to the validity of direction 7 was whether the prosecutor was the appropriate regulatory authority in relation to the above ground tanks. I am satisfied beyond reasonable doubt that the prosecutor was the appropriate regulatory authority in relation to the above ground tanks as at 18 May 2018. The defendant's submission in relation to the agreed fact being "clearly the prosecutor's power to institute proceedings for an offence under the POEO Act" has considerable force. However, notwithstanding that the Truegain EPL had been suspended on 1 April 2016 and revoked on 5 January 2018 prior to the giving of the varied clean-up notice on 18 May 2018, I do not accept that the scheduled activity of "waste storage" was not carried out following the liquidation of Truegain on 14 September 2016.
To the extent that a question arose as to who was the appropriate regulatory authority in relation to the premises after the Truegain EPL was revoked on 5 January 2018 prior to the giving of the varied clean-up notice on 18 May 2020, I accept the prosecutor's submission that s 212C(3) of the POEO Act has to be read in conjunction with s 212D. Even if, as submitted by the defendant, s 212C was "triggered" and the EPA was no longer the appropriate regulatory authority in relation to the premises, the combination of ss 212C(3) and 212D has the effect that the prosecutor could continue to exercise the functions commenced by an authorised officer as if the functions had been exercised by the appropriate regulatory authority or an authorised officer of that authority. Here, it was an agreed fact that the EPA was the appropriate regulatory authority on the date the initial clean-up notice was given (5 June 2017) as the premises were then still subject to the Truegain EPL. In the s 212C notice given to Council on 26 April 2018, and headed "Former Truegain Pty Ltd premises - 62 Kyle Street Rutherford Notification pursuant to Section 212C of the Protection of the Environment Operations Act 1997", the EPA provided the following notification pursuant to s 212C of the POEO Act: Notification Pursuant to Section 212 C of the POEO Act Under section 212C of the POEO Act, the EPA notifies Maitland City Council that the EPA intends to carry out the full functions of the ARA to ensure the clean-up and removal of the contaminated liquids within the spill containment system at the Premises.
It follows that having found that by operation of ss 212C(3) and 212D of the POEO Act the EPA continued to be the appropriate regulatory authority after the Truegain EPL was revoked, I do not need to address the defendant's submissions in relation to the withdrawal of an agreed fact. However, if I be wrong, and the defendant requires leave to withdraw an agreed fact, I would grant leave but maintain my finding, on the basis of the evidence before me and the construction of ss 212C(3) and 212D of the POEO Act, that the prosecutor was the appropriate regulatory authority in relation to the above ground tanks.
In similar circumstances, in Environment Protection Authority v Ramsey Food Processing Pty Ltd (EPA v Ramsey Food), [19] the defendant made an application for leave on the third day of a sentencing hearing in relation to pollution offences to "contradict or qualify facts agreed" in some 19 paragraphs of the parties' statement of agreed facts filed approximately 10 weeks prior to the hearing. The facts were sought to be contradicted or qualified in order to make three contentions relating to the extent of environmental harm caused by the offence: firstly, that upstream of the confluence the effluent from a cracked pipe did not travel east to the creek (the first contention); secondly, that downstream of the confluence the effluent did not travel as far as was agreed (the second contention); and thirdly that as a consequence of the second contention, the pollution caused by the defendant's activities presented only a potential health risk to an unspecified part of the creek waters that it reached (the third contention).
Biscoe J said at [11] that the Evidence Act did not apply because "in a sentencing proceeding the Evidence Act only applies if the court directs that the law of evidence applies in the proceedings and no such direction has been sought or made: s 4(1)". However, his Honour observed, it was common ground that the defendant required leave to contradict or qualify agreed facts. Accordingly, his Honour considered that the matters listed in s 192(2) should be taken into account. At [16], Biscoe J said: 16. The onus is on the party seeking leave to contradict or qualify agreed facts to make out a case for leave including as to the circumstances in which they came to agree the facts. An application to contradict or qualify agreed facts after considered negotiation and legal advice, particularly when made as late as the hearing, challenges the integrity of the agreed facts procedure and should be approached with caution. There has to be an incentive for parties to agree facts. To allow a party to back out of such an agreement easily does not encourage agreement in the first place. In a general sense, there is prejudice in denying to a party the right to rely on something that they reasonably thought was agreed.
Biscoe J identified the following factors weighing against the giving of leave: the "careful process whereby the statement of agreed facts was negotiated and ultimately agreed and signed"; [20] the "very late stage" of the leave application; [21] and prejudice to the prosecutor. [22] Weighing in favour of granting leave was the criminal nature of the proceeding which "gives a defendant a stronger case for leave than in civil proceedings even though the application was not made until the hearing." [23] Biscoe J was persuaded on balance to grant leave in relation to the first contention, but not the second or third contentions. In relation to the first contention, his Honour said that there was expert evidence capable of supporting it which was not received until after the statement of agreed facts was filed, and the evidence was served on the prosecutor before the hearing. In relation to the second and third contentions, his Honour found that the notice was not given and the weight of prejudice to the prosecutor was greater. [24]
Here, it is true that the defendant has adduced no evidence capable of explaining such a belated application to withdraw an agreed fact. However, as I have said, if necessary, I would grant the application. But for the reasons given above at [231]-[237], I have accepted the defendant's submissions concerning the meaning of the disputed fact, and do not consider the question further.

[64]

The direction 10 charge: alleged offence against s 91(5) of the POEO Act

The elements of the offence for the direction 10 charge are the same as those for the direction 7 charge (set out above at [184]). None of the elements of the direction 10 charge were in issue, except for element (v), whether the defendant had a reasonable excuse for not complying. The defendant, through his counsel, admitted that he failed to comply with direction 10 of the varied clean-up notice.
In addition to the defendant's admission that he failed to comply with direction 10, there was ample evidence before the Court that the defendant failed to comply with direction 10 in the period between 7 February 2020 and 5 November 2020: 1. after February 2020, the underground tank was more than one third full on the following occasions: 22 June 2020, 1 August 2020, 19 August 2020, 4 September 2020, 5 September 2020, 15 October 2020, 24 October 2020, 26 October 2020 and 5 November 2020 (noting the withdrawal of particulars (i) to (iv) and (vi) by the prosecutor on the fourth day of the hearing); 2. between 7 February 2020 and 29 October 2020, 10 mm or more of rainfall in any 24-hour period occurred at Maitland Airport and/or the premises on 19 occasions (an agreed fact); 3. in July 2020, EPS terminated the EPS contract and left the premises so no processing of contaminated water was occurring (an agreed fact); 4. from "at least" 26 May 2020, Mr Vujkovic was no longer employed by Truegain or the defendant (an agreed fact); 5. between June 2020 and October 2020, the EPA was required to undertake emergency clean-up action to pump out the spill containment system and remove 468,280 L of contaminated rainwater (an agreed fact); and 6. liquids were present within the spill containment system (an agreed fact).
Accordingly, in addition to the defendant's admission that he failed to comply with direction 10, there was ample evidence to satisfy me, beyond reasonable doubt, that the defendant failed to comply with direction 10 of the varied clean-up notice on 19 occasions between 7 February 2020 and 5 November 2020 after 10 mm or more rainfall in any 24 hour period was recorded at Maitland Airport or the premises and on 22 June 2020, 1 August 2020, 19 August 2020, 4 September 2020, 5 September 2020, 15 October 2020, 24 October 2020, 26 October 2020 and 5 November 2020 when the underground tank was over one third full. I return below at [317]-[318] to consider the defence of reasonable excuse in relation to the direction 10 charge.

[67]

Prosecutor's submissions

The prosecutor submitted that the cover letter to the prohibition notice from the Minister to the defendant dated 25 August 2020 established that the requisite recommendation by the prosecutor was made to the Minister. Further, there was a basis for the EPA to form the opinion required by s 101(1) based on available information that: 1. the activity of waste storage was occurring at the premises: it being estimated that between 4 June 2020 and 19 June 2020, 2.1 ML of contaminated water remained in the 62 above ground tanks, with 38 of those tanks also containing 347,000 L of non-aqueous phase liquids; 2. the manner in which the waste was being stored was likely to cause its discharge from the premises in the event of significant rainfall; and 3. the pollutants in the waste were likely to cause harm to the environment.
Together with the information relied on to form the reasonable suspicion warranting the giving of the initial clean-up notice on 5 June 2017, and the "factual developments" at the premises after the giving of the varied clean-up notice on 18 May 2018: 1. none of the defendant, Mr Vujkovic or EPS processed, transported or disposed of the waste contained in the above ground tanks; 2. between 4 June 2020 and 19 June 2020, an estimated 2.1 ML of contaminated water remained in the 62 above ground tanks, with 38 of those tanks also containing 347,000 L of non-aqueous phase liquids; and 3. significant rain fell at Maitland Airport near the premises in the period preceding the giving of the prohibition notice, including 83.2 mm in July 2020.
The prosecutor said that there was no authority relating to the proper construction of ss 101 and 102 of the POEO Act that would assist the Court with the meaning of "cease" carrying on an activity. However, principles of ordinary statutory construction would suggest that in s 101(2) the activity of storing waste may encompass both acts and omissions. This was submitted to be "implicit" in Environment Protection Authority v Truegain Pty Ltd [25] at [55]-[59] (Leeming JA) (where the Court of Criminal Appeal considered the construction of s 64(1) of the POEO Act which creates the offence of failure to comply with a condition of a licence). The prosecutor submitted that to construe s 101 of the POEO Act "so narrowly as to exclude ongoing storage does not support the purpose of the section providing the Minister with powers in circumstances of an activity causing harm to the environment".

[72]

Defendant's submissions

The defendant submitted that he complied with the prohibition notice, and that the prosecutor's assertion that he had admitted that the prohibition notice was not complied with was "incorrect". The transcript of the defendant's opening address recorded that "the defence case is that the defendant did comply with the prohibition notice in that he did not … store waste or keep substances on the premises." The transcript also recorded the submission that the particulars in the amended summons in relation to the prohibition notice offence related only to the spill containment system, and not the above ground tanks. The defendant accepted that the scope of the prohibition notice could include both the spill containment system and the above ground tanks, however, the amended summons in relation to the prohibition notice charge specified the "manner of breach" as follows (emphasis added): The [d]efendant failed to cease carrying on the activities of storing waste and keeping substances that are harmful or potentially harmful to the environment in a spill containment system at the [p]remises comprised of tanks, containers, drums, sheds, vehicle trailers and other receptacles at the [p]remises from 25 August 2020 and continuing to 16 November 2020.
That is, the defendant submitted, the prohibition notice charge relates to the spill containment system defined in the notice, the above ground tanks not forming part of the spill containment system as defined. The amended consolidated particulars in relation to the prohibition notice charge are extracted above at [10]. The defendant's case was that on a proper construction of the prohibition notice, he was not required to do any positive acts, but was restrained from carrying on specified activities. During the charge period, he did not carry on either of the activities that he was directed to cease carrying on by the prohibition notice.
In relation to s 101 of the POEO Act, the defendant submitted that the scope of a prohibition notice is a direction to cease carrying on an activity, and that it is not a notice requiring positive action to be taken other than acts required to cause the activity to cease. Further, the scope of a prohibition notice should be considered in the context of the POEO Act as a whole which includes the power to give prevention notices and clean-up notices and which expressly contemplates the power to require actions to be taken. Further, s 96 enables the appropriate regulatory authority to direct certain persons to take specified action to ensure that an activity is carried on in future in an environmentally satisfactory way. Section 96(3) provides examples of the types of actions that may be required to be taken under a prevention notice. Section 91 was submitted to enable a clean-up notice to be given directing a person to take "clean-up action" when a "pollution incident" has occurred or is occurring. By contrast, s 101 does not contemplate a prohibition notice directing a person to take action.
In terms of the prohibition notice itself, the defendant noted that "storage" and "keeping" are not defined in the prohibition notice, and that according to the Oxford English Dictionary Online: [26] (1) storage can refer to "the action of storage or laying up in reserve; the condition or fact of being stored"; and (2) the verb "keep" means to "[a]ctively hold in possession; to retain in one's power or control; to continue to have, hold or possess". Each of those words (storage and keep) was submitted to have both an active sense and a passive sense. Ms Sims submitted that "it's read strictly, or where there's an ambiguity, it's in favour of the defendant", referring to Beckwith v The Queen. [27] It was "understood that" the prosecutor did not allege that the defendant "placed waste or substances in storage or actively held waste or substances in his possession at the premises during the charge period". Rather, it was "understood that the prosecutor's case was that the prohibition notice required the defendant to do something by positive acts, rather than cease to carry on an activity." The prosecutor had not identified what it was that it said the defendant was required to do by the prohibition notice. Referring to the majority in Kirk v Industrial Relations Commission of New South Wales (Kirk) [28] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ (Heydon J agreeing)) at [14]-[15], the defendant submitted that in criminal proceedings, where there is an allegation of a failure to act, the prosecutor must identify the act that it says the defendant was required to do and failed to do.
The defendant submitted that the words "storage" and "keeping" in the prohibition notice should be interpreted "in their active senses", with the consequence that what the defendant was required to do to comply with the prohibition notice was (1) to cease placing waste in storage in the spill containment system and in tanks etc on the premises; and (2) to cease actively holding in his possession on the premises certain substances. A further indication that the prohibition notice did not require the defendant to do something, rather than to cease carrying on an activity, was submitted to be that the prohibition commenced with immediate effect. If "positive acts were required to be carried out", then "it would be expected that a reasonable time would be provided within the prohibition notice for those acts to be undertaken." The defendant ceased carrying out the prohibited activities, and no waste was received at the premises by any person after Truegain went into administration (on 14 September 2016). After "about mid-2019", the defendant did not undertake any activities on the premises and, specifically, did not place any liquid wastes or other substances into the spill containment system. To the extent there were liquids within the spill containment system, that was the result of rainwater falling on the premises and entering the bunds and underground pits and tank that comprised the spill containment system. This occurred without any intervention by the defendant; that is, the defendant did not carry out any act of storing or keeping this rainwater in the spill containment system.
Ms Sims submitted that the prohibition notice was "not a notice requiring the carrying out of positive acts", and as follows in relation to other powers in the POEO Act: … that power to direct somebody to cease carrying on the activity should be considered within the statutory scheme that gives the appropriate regulatory authority a number of different powers to - and several of those powers to specifically enable an appropriate regulatory authority to do something, to do a positive act. And those are clean-up notices … The other category of notices that an appropriate regulatory authority can give in circumstances is a prevention notice. And the legislation makes very clear that a prevention notice can require positive acts to be undertaken. … s 96 of the act … enables an appropriate regulatory authority to direct certain persons to take such action as is specified in the notice to ensure the activity is carried on in future in an environmentally satisfactory manner.

[73]

Conclusion in relation to whether the defendant complied with the prohibition notice

I accept the prosecutor's submissions in relation to the prohibition notice charge, in particular, in relation to the proper construction of ss 101 and 102 of the POEO Act and the scope of a prohibition notice, and find that the prosecutor has proved, beyond reasonable doubt, that the defendant did not comply with the prohibition notice. In particular, I am satisfied that the prosecutor identified what it is alleged that the defendant was, by the prohibition notice, required to do.
It is true, as submitted by the defendant, that no waste was received at the premises after 14 September 2016 (the date of liquidation and the date all staff were terminated), and that the prohibition notice commenced with immediate effect. However, I find that the word "storing" in the prohibition notice (given on 25 August 2020) should be interpreted as defined in the extract from the Oxford English Dictionary Online extracted above as "the action of storage or laying up in reserve; the condition or fact of being stored" or ", and the verb "keep" as "[a]ctively hold in possession; to retain in one's power or control; to continue to have, hold or possess". These definitions are materially the same as those extracted from the Macquarie Dictionary, 9th ed (2023), where the definitions of "store" include "to supply or stock with something, as for future use", "Also, store-up to lay up or put away, as a supply for future use" and "to deposit in a storehouse, warehouse, or other place, for keeping". Further, "keeping" is defined as "the act of someone or something that keeps", and "keep" as "to have the charge or custody of" and "to save, hold, or retain in possession". I find that the prohibition notice did require the defendant to do something, and did identify the act the defendant was required to do: cf Kirk at [14]-[15]. It was, contrary to the defendant's submission, a notice requiring the carrying out of positive acts, that is the cessation of the activities of "storing waste and keeping substances that are harmful or potentially harmful to the environment."

[75]

Defendant's submissions on the defence of reasonable excuse in relation to the direction 7 charge, the direction 10 charge and the prohibition notice charge

The defendant made submissions in relation to the availability of the defence of reasonable excuse for each of the three charges, submitting that Sydney Drum Machinery (No 4) appeared to be the only case in which there has been consideration of the defence of reasonable excuse to an offence under the POEO Act. The defendant submitted that a "reasonable excuse need not be a single reason but could involve a number of reasons that together caused the defendant not to comply, or not fully comply, with the notice". Further, the defendant submitted, the reasons may vary over the charge period, referring to the majority in Taikato v The Queen [29] (Taikato v The Queen), and that the court should assess the "reasonableness" of the defendant's excuse "having regard to all the surrounding circumstances and the purpose of the legislation". The defendant submitted that whilst the POEO Act "does not nominate a particular purpose of a clean-up notice", the following features of the legislative context were relevant (and, I find, uncontroversial): 1. a clean-up notice is a notice requiring a person to take such clean-up action as is specified in the notice and within such period as is specified in the notice: s 91(1). The definition of "clean-up action" in the Dictionary includes action to prevent or clean-up a pollution incident. The definition of "pollution incident" includes both actual and likely pollution; 2. a clean-up notice can be given to a number of different categories of person, including to a person reasonably suspected of causing or contributing to any extent, to the pollution incident, as well as to the owner or occupier of premises at or from which the pollution incident is reasonably suspected of having occurred or is occurring: s 91(1); 3. a person who is given a clean-up notice has no right of merit appeal; 4. there is a power to vary, including by extending the time for complying with the notice, or to revoke a clean-up notice, by subsequent notice, however, there is no formal process for a person to apply for a variation or revocation: s 110; 5. the EPA may also, by notice in writing, direct a public authority to take such clean-up action as is specified in the notice if it reasonably suspects that a pollution incident has occurred or is occurring: s 92(1). Public authorities are also authorised "voluntarily", as they consider necessary, to undertake such clean-up action if they reasonably suspect a pollution incident has occurred or is occurring: s 92(2): "this is so even if the public authority was not involved in the pollution incident"; and 6. if a public authority takes clean-up action under s 92, it may by written notice recover the reasonable costs and expenses of doing so from the occupier of the premises at or from which the authority reasonably suspects the pollution incident occurred, or from a person who is reasonably suspected by the authority of having caused or contributed to the pollution incident: s 104(2).
The defendant submitted (and again, I find, uncontroversially) that "having regard to the above features of the legislation, the evident purpose of a clean-up notice is to facilitate the rapid clean-up of a pollution incident". In order to facilitate a rapid clean-up, "the regulator need not prove who was responsible for the pollution incident but can proceed on a reasonable suspicion". If the persons suspected of being responsible for the pollution incident cannot be identified or do not undertake the clean-up or for any other reason, the regulator can direct a public authority to undertake the clean-up or do so itself: "the optionality as to who conducts the clean-up is a feature of the scheme", the purpose of the scheme being achieved by any of those persons conducting the clean-up: "If that person was not responsible for the pollution incident, they may recover the costs from the person who was responsible (either pursuant to s 104(2) or a relevant civil cause of action)".

[76]

The direction 7 charge

In relation to reasonable excuse for failing to comply with direction 7 of the varied clean-up notice given on 18 May 2018 (which required that the direction be complied with by no later than 5pm on 31 August 2018), the defendant submitted that between 31 August 2018 and mid-April 2019, he was focusing his efforts and limited resources on complying with direction 6 and direction 10 of the varied clean-up notice. He submitted that during this period (between 31 August 2018 and mid-April 2019), he engaged EPS to operate a mobile waste treatment plant to process waste in two phases which could not be conducted concurrently because "there was a need to characterise the liquids in the above ground tanks before it could be processed". Further, "the plant may need to have been adjusted to process the liquids from the above ground tanks, a sequence set out in the proposal to the EPA that was adopted in the varied clean-up notice". The defendant submitted that it was reasonable for him to have focused his efforts and resources in this manner (that is, by starting with the "underground tanks" and bunds and progressing to the above ground tanks) for the following reasons: 1. this was the sequence proposed by the defendant and EPS to the prosecutor and the basis upon which the varied clean-up notice was given; 2. the varied clean-up notice required compliance with direction 6 before direction 7; 3. the risk of a pollution incident occurring as a result of a spill from the underground tanks and bunds was significantly greater than a spill from the above ground tanks (which would first be contained by the bunds unless they were full of water); and 4. he had a reasonable expectation that time for compliance with the varied clean-up notice could be extended to reflect the time required for EPS to do the job.
The defendant submitted that between mid-April 2019 "and following", he had a reasonable excuse for failing to comply with direction 7 because "he was not able to marshal the required financial resources to do so". Further, direction 8 required that the processing required by direction 7 be undertaken by an operator holding an in force EPL for mobile waste processing; and direction 9 provided that the mobile plant must not be on the premises for longer than 6 months in any 12-month period. By April 2019, the mobile plant had been on the premises for more than six months (since 13 September 2018). To continue to process liquid waste beyond that timeframe would have put the defendant in breach of direction 9.

[80]

(1) The steps required to be taken to comply with the notices and other environmental obligations in relation to the premises

In relation to the steps required to be taken to comply with the notices and other environmental obligations in relation to the premises, the defendant submitted that as at the date of the varied clean-up notice, 18 May 2018, the liquids in the above ground tanks were water that had been pumped there from the underground tank, and that "[t]he water was rainwater that had fallen on hardstand areas of the [p]remises and directed into the spill containment system". The water "was likely contaminated with hydrocarbons and PFAS due to contamination of the [p]remises". The water "was pumped into the above ground tanks to avoid a discharge of contaminated water from the [p]remises in the event of further rainfall".
The defendant submitted that direction 6 required him to process, remove and lawfully dispose from the premises all liquids contained within all onsite bunds and the underground tank and pit system. He understood that direction 6 was complied with, and the requirement to comply with direction 10 triggered in about February 2019. Direction 8 required that processing of liquids required under directions 6 and 7 be undertaken by an operator holding a current in-force EPL for the scheduled activity of "mobile waste processing". Direction 9 provided that mobile plant must not be on the premises for longer than 6 months in any 12 month period.
Practically, the defendant submitted, direction 7 required that he take steps: 1. to identify and engage a suitable mobile waste processing operator who: (a) had suitable plant, equipment and staff to process the liquids within the above ground tanks on the premises, namely, water contaminated with hydrocarbons and PFAS; (b) was available to mobilise to the premises and complete the work within the required timeframe; and (c) held or could obtain an EPL for "mobile waste processing" within the required timeframe; 2. to identify and engage a suitable waste transport operator who could collect the treated waste water and transport it to a lawful disposal facility; and 3. to identify and engage with a waste disposal facility where the treated liquids could be lawfully disposed of.
In relation to the steps required to be taken to comply with direction 10, the defendant submitted that direction 10 did not require liquids from bunds and the underground tank and pit system to be processed before being removed from the premises and disposed of. However, due to the contamination of the premises, rainwater that fell on the hardstand areas and accumulated in the bunds and underground tank and pits was likely to have become contaminated with hydrocarbons and PFAS. Therefore, practically, direction 10 required him to do the following: 1. identify and engage a suitable waste transport operator who could collect the untreated liquids and transport it to the lawful disposal facility; 2. identify and engage with a waste disposal facility where the untreated liquids could be lawfully disposed of; 3. "if a waste transport operator and/or waste disposal facility who could collect and/or dispose of the untreated liquid, [identify] and engage a suitable mobile waste processing operator who": 1. had suitable plant, equipment and staff to process the liquids within the bunds and underground tanks and pits on the premises, that is water contaminated with hydrocarbons and PFAS; 2. was available to mobilise to the premises and complete the work within the required timeframe; and 3. held or could obtain an EPL for "mobile waste processing" within the required timeframe; 1. identify and engage a suitable waste transport operator who could collect the treated waste water and transport it to the lawful disposal facility; and 2. identify and engage with a waste disposal facility where the treated liquids could be lawfully disposed.
In relation to the prohibition notice offence, the defendant submitted that the prosecutor's "primary case" was that the prohibition notice did not require him to do anything. If that interpretation were not accepted, the prohibition notice charge specified that the manner of breach was in relation to the spill containment system, and not the above ground tanks. The steps required to remove liquids from the above ground tanks were "essentially the same" steps as required by direction 10 of the varied clean-up notice.

[81]

(2) The resources required to carry out those actions

The defendant submitted that the resources to carry out the steps required to be taken in order to comply with the varied clean-up notice "required considerable financial resources". The "notices required him to engage licensed operators to process on site, transport and dispose of the waste". The costs required to treat waste water onsite by a mobile waste contractor could be estimated from the actual costs incurred in engaging EPS to treat waste water onsite. During the period that EPS operated mobile waste treatment at the premises, it treated a total of 1,866,900 L of water, at a price of $267,328.89 (noting that the defendant was not able to pay all invoices). This, it was submitted, equated to approximately $0.15/L. The cost of transporting the treated water (1,761,850 L) for disposal offsite was not included in this cost.
Prior to engaging EPS, the defendant obtained a quote from Haldon. The defendant recalled that the quote was about $0.20 / L, but in cross-examination said that he wasn't "that confident". Mr Matthews "thought that Haldon's quote was cheaper than that of EPS, but not significantly so". The WSP report dated 1 May 2020 commissioned by the defendant included an estimate of the time and cost involved in treating and disposing of water within the above ground tanks at approximately $1,292,380. The defendant submitted that the cost of disposing of untreated waste water could be estimated by reference to: 1. costs incurred in 2016 in partially complying with the Truegain prevention notice: Tox Free removed 40,000 L at $0.13 (/ L) plus waste levy and other fees for a total cost of $10,106.80 (including GST); this water was from the underground tank and was not understood at the time to contain PFAS; 2. costs incurred by the EPA in removing and disposing of waste water from the underground tank in March 2018, amounting to a total of 63,240 L at a cost of $281,233.81 or $4.44/ L, a large portion of this cost being for demurrage; 3. costs incurred by the EPA in removing and disposing of waste water between June 2020 and October 2020, during which period approximately 468,280 L were removed at a price of $897,706.98 or $1.9 / L; and 4. the GHD report commissioned by the prosecutor which included estimated costs of various remediation options: the preventative response "empty bunds and pump out after wet weather" having an initial cost of $0.7 million and $0.4 million in the first year, with other options including "pump out contents of tanks" with an estimate of liquid disposal potentially > $10 million based on 5 ML of liquid waste at a disposal cost of $1.95/ L.
On the evidence available, the defendant submitted that the "best estimate of the likely cost of complying with [d]irection 10 during the charge period is the costs incurred by the [p]rosecutor of just under $900,000 in June to October 2020". The cost of complying with direction 7 could have been $1.2 million (based on the WSP estimate for on-site treatment) up to $10 million (based on the GHD estimate for disposal without on-site treatment). The prosecutor's assertion that if the defendant had paid a sum of $100,000 to EPS, the initial clean-up notice would have been fully complied with was "clearly incorrect" for the following reasons: 1. The EPS contract was not a fixed price contract, rather it incorporated the proposal dated 21 August 2018 which set out a schedule of rates in Appendix 1 and milestone payments in Appendix 2. Milestones 1 to 5 were fixed amounts, but milestone 6 would be a "final reconciliation" after the water treatment plant was demobilised. Further, the note below the table in Appendix 2 provided that the "schedule of rate items (Table #5) are not included and to be charged progressively". Accordingly, it "was not true that $100,000 was all that was left to pay to the EPS for the works the subject of the EPS contract". 2. Even if EPS had performed all the work under the EPS contract, this would not have ensured that the initial clean-up notice was complied with. It may have completely satisfied directions 6 and 7, but it "certainly did not include [d]irection 10". The EPA proposal was to treat an estimated 3,000,000 L of PFAS contaminated water, the work to be conducted in two phases. The first phase concerned surface water that had already been sampled and characterised and estimated to be in a quantity of 1.5 ML. This was completed between November 2018 and April 2010 with a total of 1,866,900 L of water treated, and achieved compliance with direction 6. The second phase was for tank water. This was related to direction 7. It was "not clear whether the water in those tanks would have been more than the 1,133,100 litres remaining to be processed under the EPS contract". What was certain is that the EPS contract did not include any proposal that would comply with direction 10. 3. The EPS contract excluded certain costs, including the significant cost of transporting treated water from the site for disposal. The defendant paid Tox Free and "CAC" directly for this. The trust ledger for the loan from Gevin includes payments to Tox Free of $3,122.03 on 12 December 2018, $8,574.98 on 22 January 2019, $7,814.98 on 22 January 2019, and $6,246.41 on 1 February 2019. Payments to "CAC" were $4,049.50 on 12 December 2018 and $5,399.33 on 1 February 2019.
Accordingly, it was not clear what volume of liquids the prosecutor alleged were "stored" or "kept" in the spill containment system on the premises during the period of the prohibition notice charge, that is, between 25 August 2020 and 16 November 2020. It was not possible to estimate the cost of complying with the prohibition notice during the charge period; however, the cost per L would be within the range of ($0.13/ L) to ($4.44/ L).

[82]

(3) The resources available to the defendant

In relation to the resources available to him, the defendant submitted that since Truegain went into liquidation (in September 2016), he was unable to obtain an income from the premises to fund the clean-up. The options available to fund the clean-up were: 1. drawing upon the savings of himself (and his wife); 2. liquidating assets; 3. borrowing; 4. establishing a suitable business on the premises that could generate an income; and 5. leasing the premises to a suitable business, or, alternatively, disposing of the premises in its then present condition. However, that "would not necessarily have funded the clean-up and the defendant may yet have had ongoing liabilities in relation to the clean-up".
The defendant submitted that he did in fact draw upon his (and his wife's) personal finances to fund the clean-up, including $245,000 in superannuation. After Truegain went into liquidation in September 2016, he started to sell or re-finance the properties and assets that he owned to fund the clean-up. By 2018, he had started to run out of money because he had no income and had spent all his money paying the interest on loans he had taken out to fund the clean-up. He also borrowed from lenders, and sought to establish a new business on the premises as set out in the agreed facts reproduced above at [143]-[154]. He engaged business partners and established a company, CTP (which was registered on 17 January 2017), with a view to establishing a facility for treatment of water contaminated with PFAS. However, CTP did not raise enough capital to get off the ground. He also sought to lease out or sell the premises, but could find no interested tenants or purchasers. On several occasions, he advised the EPA that he did not have the financial capacity to clean-up the premises and requested assistance by way of a loan or grant. Those requests were refused.
Ultimately, the defendant estimated that he spent "about $2.5 million" between 2016 and 2020 trying to clean-up the premises and comply with the initial clean-up notice, the varied clean-up notice and an earlier prevention notice: "Approximately $200,000 was spent in 2016, with the rest spent later". He submitted that he was "transparent" that this expenditure included, in addition to the direct costs of complying with the EPA notices, payments to Mr Vujkovic (about $450,000 between October 2016 and early 2020), Mr Matthews (about $250,000 between March 2018 and mid-2019), Mr Peter Wright ($100,000), interest and other loan expenses, costs of Wilson Planning to assist him with council approvals, legal expenses, and living expenses for him and his family ($200,000 to $250,000).
Ms Sims submitted that Mr Pullinger's evidence should be accepted. His affidavit was read with limited objections. He had been challenged on his estimate of $2.5 million and said that "he was confident of that number, approximately". At no point in cross-examination was it put to him that he was mistaken or lying about that estimate. His evidence was that he did not hold the books and records of Truegain and related entities because these were long ago delivered up to the respective liquidators. His financial arrangements during this period were conducted through related entities, including Glowbye, Donpat and Bellham. The prosecutor had conducted extensive investigations into the defendant's financial position, the result of which was consistent with the defendant's evidence.

[83]

(4) The actual steps taken by the defendant to attempt to comply with the notices and factors outside the control of the defendant that inhibited his ability to comply with the notices

For the purpose of determining whether he had a reasonable excuse for failing to comply, or failing fully to comply with direction 7 and direction 10 of the varied clean-up notice, and with the prohibition notice, the defendant submitted that it was relevant to consider the steps taken by him to seek to comply with those requirements, and the steps taken by him to seek to comply with other environmental obligations. The other environmental obligations submitted to be relevant were the defendant's obligation to comply with "an earlier prevention notice", the requirement not to pollute waters, other directions in the varied clean-up notice, and other directions (formal and informal) given by the prosecutor.
The defendant submitted that when Truegain went into liquidation in September 2016, there were various waste and other materials on the premises, including waste hydrocarbons, and the premises were contaminated with PFAS. As rain fell on the premises, it accumulated in the bunds and "underground tanks" and became contaminated with hydrocarbons and PFAS. There was a risk, without active management, that contaminated water would be discharged from the premises, resulting in water pollution. From time to time, the prosecutor directed the defendant to take steps to avoid such discharges. Between October 2016 and mid-2019, the defendant took steps to avoid discharge of contaminated water from the premises, including pumping water from the "underground tanks" into the bunded areas and pumping water from the "underground tanks" or bunded areas into the above ground tanks to create freeboard in the underground tank and bunds. The prosecutor advised the defendant that "it would be crucial to engage or employ someone to ensure that all wastewater would be managed appropriately to prevent any discharges from the [p]remises". He employed Mr Vujkovic to do this.
The defendant referred to the actions he was required to take specified in the prevention notice given on 20 September 2016 which included removing from the premises and lawfully disposing of liquids contained within the underground tank and bunds. On 5 October 2016, he arranged for all liquid waste materials within the underground storage tank and associated pits to be removed and disposed of by Tox Free. He attempted to arrange for removal and disposal of the liquid within the bunds, but was unable to find a suitable contractor once it was identified that the liquid was contaminated with PFAS.
The initial clean-up notice required him to remove from the premises and lawfully dispose of all liquid from the spill containment system (bunds, underground tank and pits) by 23 June 2017, and within 48 hours of any rainfall event. He "attempted to identify and engage a waste transport operator and waste disposal facility to remove and lawfully dispose of the liquid" from the spill containment system. He was "unable to do so, so continued to manage water on the [p]remises by … pumping from the underground tank into the bunds and above ground tanks". Once it was discovered that the liquid contained PFAS, it became impossible for him to comply with the initial clean-up notice because there were no waste facilities within NSW licensed to receive PFAS material, as was agreed by Ms Marler (director, Hunter Region, EPA). The defendant "investigated whether the wastewater could be treated onsite and the treated water transported from the [p]remises for disposal or disposed of into the sewer (with the appropriate approval from the water authority)."
Mr Matthews (the general manager of CTP) put together a plan, set out in a letter to the prosecutor dated 29 March 2018, which had been prepared in consultation with the defendant and Mr Vujkovic for cleaning up the premises, included some steps required to comply with the initial clean-up notice and other steps. Mr Matthews consulted with mobile waste operators and gave his best estimate of the time required to carry out the steps. Mr Vujkovic and the defendant both recalled that the EPA had told them that the timeframes for compliance with the varied clean-up notice were based on this plan. The defendant submitted that, as explained by Mr Matthews, a number of mobile waste operators were considered, the only operators then licensed to process PFAS being South Coast Liquid Treatment Pty Ltd (South Coast Liquid Treatment) and Haldon. South Coast Liquid Treatment was eliminated because it was located too far away. The defendant obtained a quote from Haldon which "may have been a similar price to that of EPS". EPS was selected because the defendant believed that it had the capability to treat the water and had a convenient facility in Newcastle. Although EPS did not have an EPL, the defendant understood that one could be obtained within 30 days. Mr Matthews gave evidence that EPS was his preferred operator. Mr Klepetko, (principal technical advisor of waste assessment, EPA) gave evidence that "every circumstance is different, and a particular plant can't necessarily treat every circumstance where PFAS is present in liquid waste".
The defendant also referred to EPS having applied on 1 May 2018 for an EPL which was granted on 29 August 2018. The defendant was "not involved in and had no control over the application or determination of the application." As set out in the affidavit of Mr Klepetko, the assessment of an EPL application is "technical and involved numerous correspondence between EPS and the EPA licensing team". The day after the EPS EPL was granted (29 August 2018), the defendant entered a contract with EPS for mobile waste treatment on the premises. On 13 September 2018, EPS mobilised to the site, and on 15 November 2018, commissioning was complete and waste processing had commenced. By about February 2019, water from the bunds and the underground tank was processed in compliance with direction 6. The timeframe for completing this was "much longer than the [d]efendant had anticipated based on the [Mr Matthews'] letter dated 29 March 2018", and was incorporated into the varied clean-up notice. The defendant submitted that "[t]he delays were not within the control of the [d]efendant". In April 2019, EPS ceased processing waste water at the premises, by which time EPS had processed 1,866,900 L from the underground tank, pits and bunded areas, and had not commenced treating water from the above ground tanks.
The defendant submitted that he was also undertaking other activities to clean-up the premises to prevent pollution or contamination from the waste and other materials left behind after Truegain went into administration. Cleaning up the premises was also "required in order to be able either to establish a new business, to lease out the [p]remises, or to dispose of the [p]remises." One of those options was required to fund the clean-up of the premises. The defendant engaged Mr Matthews "to assist him to clean-up the [p]remises for these future uses and to comply with the varied clean-up notice." Mr Matthews arranged for Mr Vujkovic and a range of contractors to "carry out general clean-up of the [p]remises and reported these activities to the EPA regularly." The general clean-up included general site maintenance, including repairs to buildings and electricity, and packaging waste grease in drums for removal by Environmental Treatment Solutions (ETS); the collection of drums of used oil filters by Coast and Valley Oil; the pumping of waste oil out of storage tanks and taken by Coast and Valley Oil; the loading of solid waste into skip bins and taken by JR Richards to landfill; and the taking of scrap steel by Matthews Metal Management. Until about early 2020, Mr Vujkovic continued to attend the premises periodically to manage water accumulating in the underground tank and pumping it into the bunds. After March 2018, no more water was pumped into the above ground tanks.

[86]

(2) Whether the defendant's financial circumstances resulted in an inability to comply with the notices

In relation to financial circumstances resulting in an inability to comply, the prosecutor also referred to Environment Protection Authority v Lithgow City Council [30] (EPA v Lithgow City Council) at [68] (Preston CJ of LEC). There his Honour said: Compliance with environmental laws is not optional; it is not contingent on a person having sufficient funds or sufficient willingness to expend funds to comply with environmental laws. The laws mandate compliance; it is a criminal offence not to comply. Persons must assign first priority to compliance with the laws and arrange their organisational structure, management, human resources and financial resources to ensure that this occurs.
The prosecutor submitted that on the defendant's evidence, had the defendant paid EPS for the remainder of the contract, a sum of about $100,000, the initial clean-up notice and varied clean-up notice would have been fully complied with. This amount should have been prioritised over other expenses "for which there is evidence the defendant engaged after EPS left the site in April 2019". Further, the prosecutor submitted, the defendant had conceded that of the $2.5 million he asserted (but could not quantify) spent on remediating the premises, he spent significant sums on exploring options to sell the property, legal fees, other clean-up actions not the subject of the clean-up notice, and that he paid himself and his wife about $250,000 "in the relevant period" for living expenses. The defendant had not demonstrated on the balance of probabilities, that he prioritised the expenditure of available funds on the balance of the EPS contract to achieve compliance with the clean-up notice. Further, the defendant had failed to provide any evidence in the form of financial statements, profit/loss statements, tax returns or similar documentary evidence regarding his finances in the relevant period 2019 to 2020. The defendant's affidavit evidence included assertions uncorroborated by any documentary evidence, his oral evidence did not provide further assistance as to his affairs "at the relevant time", and he had failed to discharge his onus to prove, on the balance of probabilities, financial incapacity to comply with the notices.

[88]

Conclusion on the defence of reasonable excuse in relation to the direction 7 charge

In Sydney Drum Machinery (No 4), the defence of reasonable excuse was raised in the context of an offence of failing to comply with a clean-up notice which required the recipient immediately to engage a suitably qualified expert to isolate the stormwater retention tank so that any liquid waste spilt at the premises did not leave the premises by 5.00pm Tuesday 17 January 2012. The defence was considered by Craig J at [262]-[264] (emphasis added) as follows: 262. The only measures taken by Mr Osman-Kerim to address the 17 January Notice are those to which I have already referred. … the evidence discloses that upon receipt of the oral notice on 16 January 2012, Mr Osman-Kerim telephoned Mr Sidaros, requesting that he attend the [p]remises to "look at the matters raised" in the clean-up notice. He understood that Ms Kemp contacted another plumber who came to the [p]remises but indicated that he was unable to undertake the required task. When Mr Sidaros did not attend promptly, he was contacted "on a few occasions" thereafter concerning the work but had not attended to undertake the work by the time the second fire occurred on 23 January. Mr Sidaros was the only plumber that Mr Osman-Kerim contacted. 263. I am not satisfied that, on the balance of probabilities, Mr Osman-Kerim has established a reasonable excuse on the part of the Company for its failure to comply with the 17 January Notice. The evidence does not disclose any particular or unreasonable difficulty in complying with that Notice. The fact that a plumber was contacted who did not arrive when he promised to do so does not, to my mind, constitute a reasonable excuse. If Mr Osman-Kerim was genuine in his endeavours to have what ultimately proved to be a task that could be completed within the space of a little more than two hours on an urgent basis, it is inconceivable that he would make contact with only one plumber and accept that plumber's statement that he would be there "as soon as I can". The fact that the prosecutor was able to negotiate with that same plumber to undertake the task and then to have the task undertaken all on the same day, rather suggests that the efforts of Mr Osman-Kerim to secure the services of that plumber were not consistent with establishing the necessary will to address the requirements of the Notice. 264. … No reasonable explanation emerges from the evidence as to why a plumber could not be retained to carry out the work between 17 January and 30 January.
The facts of Sydney Drum Machinery (No 4) are far removed from those of the present case which concern the removal of a significant volume of waste in a materially different physical environment.
In Sydney Drum Machinery (No 4), Craig J at [336]-[337] also made the following remarks about the phrase "reasonable excuse": 336. … the phrase "reasonable excuse" derives its content and meaning from the context of the particular statute in which it appears, particularly having regard to the purpose of the provision to which "reasonable excuse" is a defence (Taikato v The Queen [1996] HCA 28; 106 CLR 454 at 464; SD v New South Wales Crime Commission [2013] NSWCA 48; 84 NSWLR 456 at [17]). The purpose of s 91(5) is a mechanism to punish non-compliance with a notice given under s 91(1) which, in turn, is directed to the prevention or mitigation of environmental harm. The defence of reasonable excuse does not import a choice on the part of the recipient of the notice as to whether he, she or it will comply. 337. In Corporate Affairs Commission (NSW) v Yuill [1991] HCA 28; 172 CLR 319 Dawson J said at 336 that reasonable excuse "aptly refers to any physical or practical difficulties in complying with" the statutory requirement. Although being considered in a different statutory context, his Honour's observation is apt to be applied to the present offence. At least, factors having the character that he identified must be the primary focus of the reasonable excuse defence under s 91(5).
In Council of the City of Sydney v Blue Chips Franchise Pty Ltd [31] Preston CJ of LEC considered the defence of reasonable excuse in the context of an offence of failing, without reasonable excuse, to comply with a requirement made by an officer of the Council of the City of Sydney in accordance with Division 1C of Part 6 of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act). The requirement made pursuant to s 119M(1) of the EPA Act was to produce "all documents" relating to 33 apartments. The decision was on appeal from the decision of Magistrate Atkinson who dismissed the charge, having found that the prosecutor had proved the elements of the offence, but that the defendant had a reasonable excuse for failing to comply. [32] The chief judge concluded as follows at [39]-[40]: 39. I find that the Council has not established Ground 2, that there was no evidence for the Magistrate's finding that there was a reasonable excuse for Blue Chips not to comply with the requirement. I agree with the reasons given by Blue Chips in its submissions. There was some evidence for both the conclusion that there was a reasonable excuse for Blue Chips not to comply with the requirement and the reason given for that conclusion that there was insufficient time to complete the searches for the information and provide all of it to Mr Stevens. The Magistrate summarised that evidence in her reasons. 40. It may be that there was other evidence that might have supported making different findings, but that does not show that the findings that the Magistrate did make were made without evidentiary foundation. Much of the Council's argument was, at base, a challenge to the factual soundness and alleged illogicality of the findings made by the Magistrate. But neither a wrong finding of fact nor want of logic in fact finding is an error of law.
In Taikato v The Queen, the majority (Brennan CJ, Toohey, McHugh and Gummow JJ) said at 464 and 466 in relation to the use of the term "reasonable excuse" (citations removed): "Reasonable excuse" … The term "reasonable excuse" has been used in many statutes and is the subject of many reported decisions. But decisions on other statutes provide no guidance because what is a reasonable excuse depends not only on the circumstances of the individual case but also on the purpose of the provision to which the defence of "reasonable excuse" is an exception. … … the reality is that when legislatures enact defences such as "reasonable excuse" they effectively give, and intend to give, to the courts the power to determine the content of such defences. Defences in this form are categories of indeterminate reference that have no content until a court makes its decision. They effectively require the courts to prescribe the relevant rule of conduct aper the fact of its occurrence. That being so, the court must give effect to their own ideas of what is a "reasonable excuse" in cases coming within s 545E(2) [of the Crimes Act 1900 (NSW)] even when it requires the courts to make judgments that are probably better left to the representatives of the people in Parliament to make. [33]
In dissent in the result, Dawson J said at 470 that "[a] reasonable excuse is not more or less than an excuse which would be accepted by a reasonable person".
In Burwood Council v Pan Pac Investments Pty Ltd [34] Pain J considered the defence of reasonable excuse in the context of an offence of failing to comply with a requirement to provide information and records under s 119J of the EPA Act. At [122] Pain J said (emphasis added): 122. Ms Wu on behalf of Pan Pac has not established on the balance of probabilities that Pan Pac had a reasonable excuse not to provide the records sought in the time stated in the Notice. That Ms Wu submitted that to properly respond to the Notice she would have to go through her records for each resident which would take her a week to do and that she did not have time to do this is insufficient evidence to establish reasonable excuse in circumstances where the Notice was not proven to be oppressive and burdensome. 123. Ms Wu's submission that the Notice was an invasion of privacy in the absence of a privacy notification as required under the Privacy Act (Cth) is legally incorrect. Section 10 of the Privacy and Personal Information Act 1988 (NSW) which specifies requirements for public sector agencies when collecting information has no application in the circumstances of a statutory notice issued by an authorised council officer performing law enforcement functions by virtue of s 23(3) of that Act. 124. That to fully comply with the Notice required Ms Wu in her view to supply her personal bank statements and tax returns does not arise from the terms of the Notice. That arises from how she chooses to conduct her personal affairs and those of Pan Pac. The request for company records in the Notice is reasonable. 125. Ms Wu's offer to provide the documents physically in a suitcase if council officers asked her to come back another day did not place an onus on the council officers to ask Ms Wu to return. The responsibility to comply with the notice rests with the recipient. 126. That Ms Wu considered the request was unethical is irrelevant. 127. The Council has established the elements of the Notice offence beyond reasonable doubt. Pan Pac is guilty of the Notice charge.
I accept, as submitted by the defendant, that a "reasonable excuse need not be a single reason but could involve a number of reasons that together cause the defendant not to comply, or not fully comply, with a notice". I also accept, as submitted by the defendant, that the reasons may vary over the charge period, and that the Court should assess the reasonableness of the excuse having regard to all the surrounding circumstances and the purpose of the legislation. Having regard to the features of the legislation summarised above at [265]-[266], I also find, as submitted by the defendant, that the purpose of the power to give a clean-up notice is to facilitate the rapid clean-up of a pollution incident.
I am not satisfied that the defendant has proved, on the balance of probabilities, a reasonable excuse for his failure to comply with direction 7 of the varied clean-up notice given on 18 May 2018 requiring him by no later than 5pm on Friday 31 August 2018 to process, remove and lawfully dispose from the premises all liquids within all above ground tanks. The defendant's submissions in relation to reasonable excuse in relation to his failure to comply with direction 7 as well as direction 10 of the varied clean-up notice and with the prohibition notice essentially reduce to two propositions: compliance was not technically possible and his financial circumstances resulted in an inability to comply.
In relation to the direction 7 charge which concerns non-compliance with the direction given on 18 May 2018 requiring compliance by no later than 5pm on 31 August 2018, it may be, as submitted by the defendant, that between 31 August 2018 and mid-April 2019, he was focusing his efforts and resources on complying with direction 6 and direction 10 of the varied clean-up notice. Directions 6 and 10 provided as follows: 6. By no later than 5pm on Friday 29 June 2018, process, remove and lawfully dispose from the Premises all liquids contained within all onsite bunds and the underground tank and pit system. … 10. Upon the completion of Direction 6, immediately remove and lawfully dispose of all liquids from the onsite bunds (or similar structures) and the underground tank and pit system as a result of the following circumstances: a) after 10mm or more of rainfall in any 24 hour period at Maitland Airport or recorded on Premises; or b) when the underground tank is over 1/3 full.
However, I am not satisfied, on the balance of probabilities, that between 31 August 2018 and 16 November 2020 the defendant had a reasonable excuse for failing to comply with direction 7 because compliance with the direction was not technically possible. In so finding, I have regard, in particular to the following: 1. as at the date of the varied clean-up notice, the liquids in the above ground tanks "was likely contaminated with waste hydrocarbons and PFAS due to contamination of the premises"; 2. Mr Matthews, general manager of CTP who commenced full-time employment at the site in March 2018, gave evidence that Haldon would also have been able to process the waste on the site; that Haldon was "cheaper than EPS"; that at that time, Haldon had the relevant EPL and EPS did not; that the timeframes in the varied clean-up notice were based on the timeframes in Mr Matthews letter to the EPA of 29 March 2018; and 3. Mr Pullinger gave evidence confirming that the variation of the clean-up notice in 2018 was to match the timetable for clean-up works that he formulated with Mr Matthews and EPS; that it was fair to say that he did not recall making a formal application to vary the varied clean-up notice; that he did not ask for more time to comply with the clean-up notice when he became aware that EPS did not yet have an EPL (not that he could recollect); and that when he engaged EPS, he was aware they did not have the relevant licence.
As it transpired, the plan put together by Mr Matthews, the general manager of CTP, for cleaning up the premises set out in the letter to the prosecutor dated 29 March 2018 which was prepared in consultation with Mr Vujkovic and the defendant was not achieved within the time required. However, the defendant did not make any application to extend the time for compliance, and there was no onus on the EPA to make such an application.
In relation to the defendant's financial circumstances, again, it might be accepted that the resources to carry out the steps required to be taken in order to comply with direction 7 required considerable financial resources, and that there was a dispute in relation to the cost of disposing of untreated waste water from the above ground tanks. However, the EPS contract entered into by the defendant on 30 August 2018 for the payment by the defendant to EPS of amounts for scheduled items and milestone payments totalling $302,158.61. Accordingly, there was considerable force to the prosecutor's submission that had the defendant paid EPS a sum in the order of $115,000 for completion of milestones 4 and 5, the clean-up notices may well have been fully complied with. I find that this amount should have been prioritised over other expenses.
It might also be accepted that after Truegain went into liquidation in September 2016, the defendant was unable to obtain income from the premises to fund the clean-up, and that the defendant spent considerable amounts in trying to clean-up the premises between 2016 and 2020. However, after Truegain went into liquidation in September 2016, there remained various waste and other materials on the premises, including waste hydrocarbons, and the premises were contaminated with PFAS.
I am not satisfied that the defendant has established on the balance of probabilities an inability to comply with direction 7 of the varied clean-up notice arising from his financial circumstances on 31 August 2018. There were, as summarised above at [183] and [285], significant other amounts spent by the defendant in the period 2016 to 2020 on matters not relating to remediating the premises, including exploring options to sell the property, legal fees, other clean-up actions not the subject of the clean-up notice, and the payment to the defendant and his wife of about $250,000 for living expenses. I find that the defendant did not prioritise the expenditure of available funds on the balance of the EPS contract to achieve compliance with direction 7 of the varied clean-up notice given on 18 May 2018, by no later than 5pm on 31 August 2018.
In particular, I find, as submitted by the prosecutor, that the defendant did not provide evidence in the form of financial statements, profit and loss statements, tax returns, accounting records or similar documentary evidence regarding his finances in the period from 18 May 2018 onwards (or at all) capable of permitting an assessment of his financial circumstances in the period of the direction 7 charge. The defendant no doubt found himself in deeply distressing financial circumstances in the period following the liquidation of Truegain in September 2016. His affidavit evidence was that he estimated his personal net worth in 2015 "would have been in excess of $45 million", and he estimated that "about $35 million would have been through my shareholding in the Truegain Business and about $10 million would have been the net equity of the properties that I owned personally or with my wife, and some saving". However, neither his affidavit nor his oral evidence provided the Court with assistance in relation to his financial affairs in the period of the direction 7 charge. The defendant did not assist the Court in relation to the circumstances surrounding the sale of the Hunter's Hill property by his spouse on 2 September 2019 for $4,375,0000 or the $245,000 he drew on in superannuation.
The defendant has not established, on the balance of probabilities, a reasonable excuse for failing to comply with direction 7 of the varied clean-up notice during the charge period.

[92]

Endnotes

[2023] NSWLEC 118 at [110] (Robson J).
(2008) 181 A Crim R 83 at [127]; [2008] VSCA 14 at [127] (Curtain AJA).
(1984) 152 CLR 528; [1984] HCA 5 (Brennan J).
[2016] NSWLEC 59 at [353] (Craig J).
(2008) 74 NSWLR 102; [2008] NSWCA 278 (Allsop P) (Beasley and McColl JJA agreeing).
[2007] NSWLEC 242 at [14] (Jagot J).
(2021) 252 LGERA 102; [2021] NSWLEC 144 (Pain J).
[2004] NSWSC 112 at [51]-[112] (Whealy J).
(2005) 145 LGERA 1; [2005] NSWLEC 675 at [41]-[42] (McClellan CJ of LEC).
[2015] NSWLEC 101 at [9] (Pepper J).
(1998) 102 LGERA 253 at 265 and 283; (1998) 19 WAR 520 (Ipp and Owen JJ).
[1999] 2 AC 143; [1998] 2 All ER 203; [1998] 2 WLR 639 at 664 (Lord Steyn); cited with approval in Selby v Pennings at 268 (Ipp J) and 283-284 (Owen J), Gray v Woollhara (Whealy J).
(1980) 47 FLR 163 at 175-176; [1980] FCA 94 (Brennan, Keely and Fisher JJ); cited in Environment Protection Authority v Eastern Creek Operations Pty Limited (2022) 108 NSWLR 198; (2022) 251 LGERA 55; [2022] NSWCCA 97 at [36] (Macfarlan JA) in relation to a notice under s 191 of the POEO Act.
[2008] NSWLEC 306 at [16]-[17] (Pain J).
[2019] NSWLEC 89 (Preston CJ of LEC).
(2015) 214 LGERA 214; [2015] NSWLEC 135 (Biscoe J).
(1990) 170 CLR 104; [1990] HCA 26 (Mason CJ, Brennan, Deane, Dawson, Toohey, Gaudron and McHugh JJ).
(2001) 126 A Crim R 562; [2001] NSWCCA 540 (Smart AJ) (Spigelman CJ and Simpson J agreeing).
[2009] NSWLEC 152 (Biscoe J); cited in Environment Protection Authority v Mouawad (No 4) [2023] NSWLEC 76 at [44] (Pritchard J); Brown v Health Services Union (2012) 205 FCR 548; [2012] FCA 644 at [171] (Flick J); Fair Work Ombudsman v Rainbow Paradise Preschool Childhood Development and Education Long Day Care Centre Pty Ltd [2015] FCCA 1652 at [42] (Judge Lloyd-Jones); and R v Shipsey [2018] NSWLC 4 at [13] (Magistrate Stewart).
EPA v Ramsey Food at [17] (Biscoe J).
EPA v Ramsey Food at [18] (Biscoe J).
EPA v Ramsey Food at [19] (Biscoe J).
EPA v Ramsey Food at [22] (Biscoe J).
EPA v Ramsey Food at [26]-[28] (Biscoe J).
(2013) 85 NSWLR 125; [2013] NSWCCA 204 at [55]-[59] (Leeming JA).
Oxford University Press, "Oxford English Dictionary" www.oed.com accessed 2023.
(1976) 135 CLR 569; [1976] HCA 55 (Gibbs, Stephen, Mason, Jacobs and Murphy JJ).
(2010) 239 CLR 531; [2010] HCA 1 at [14]-[15] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) (Heydon J agreeing).
(1996) 186 CLR 454; [1996] HCA 28 (Brennan CJ, Dawson, Toohey, Gaudron, McHugh, Gummow and Kirby JJ).
[2007] NSWLEC 695 at [68] (Preston CJ of LEC).
[2017] NSWLEC 24 (Preston CJ of LEC).
See Council of the City of Sydney v Blue Chips Franchise Pty Ltd (Local Court (NSW), 9 August 2016, unreported) (Atkinson LCM).
The footnote at the end of the first sentence in the above extract from Taikato v The Queen refers to the following cases: Clough v Leahy (1904) 2 CLR 139 (refusal of witness to be sworn without reasonable excuse); R v Lichaa (1980) 3 A Crim R 355 (reasonable excuse for possession of drugs); Controlled Consultants Pty Ltd v Commissioner for Corporate Affairs (1985) 156 CLR 385 (reasonable excuse for failure to produce documents); Ganin v NSW Crime Commission (1993) 32 NSWLR 423 (reasonable excuse for refusal to answer question); MacDonald v Australian Securities Commission (1994) 48 FCR 210 (failure without reasonable excuse to comply with notices to produce issued under the Australian Securities Commission Act 1989 (Cth)); R v Hill (1994) 74 A Crim R 59 (found in a place reasonably suspected of being used for the purpose of prostitution without reasonable excuse); Conners v Craigie (1994) 76 A Crim R 502 (reasonable excuse for offensive language).
[2018] NSWLEC 110 (Pain J). 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: 22 May 2024

[155]

BACKGROUND

...

N. On 4 February 2019, Mr Pullinger and Glowbye provided the EPA with a preliminary investigation report examining groundwater and soil contamination at the Premises. Sampling involved targeting PFAS, petroleum hydrocarbons, polycyclic aromatic hydrocarbons and heavy metals as contaminants of concern, but did not include solvents despite a solvent wash area and a drum storage area in the northern parts of the Premises. The report found groundwater exceedances against the PFAS National Environment Management Plan (NEMP) drinking water guidelines, concentrations of copper, nickel and zinc exceeding NEPM groundwater investigation levels and soil detections of PFAS and NEPM Ecological Investigation Level exceedances for zinc.

...

P. On 12 September 2019, the EPA undertook sampling of the bund storage areas at the Premises confirming high levels of PFAS and other contaminants in bund water. It is believed that the above ground tanks are still holding waste material with similar pollutant characteristics to the bund water. There is an ongoing risk that contaminated liquids will be discharged from the System to areas within the Premises, especially during or after rain.

Q. Under s 101 of the Act the EPA may recommend the issuing of a prohibition notice, including if it is of the opinion that there is an ongoing discharge of pollutants within premises arising from an activity, and that the continued activity is likely to cause harm to the environment or be harmful to public health. The EPA has made such a recommendation in respect of the activities at the Premises.

...

DIRECTION TO PROHIBIT ACTIVITIES

You, Robert Lenard Pullinger, are directed to cease carrying on the following activities for the period specified below:

1. Storing waste and keeping substances that are harmful or potentially harmful to the environment, including hydrocarbons and PFAS chemicals, in the System and in tanks, containers, drums, sheds, vehicle trailers and other receptacles at the Premises, for a period of two years from the date of this Notice.

[221]

(1) The exercise of the power in s 91 is one of judgment for the regulatory authority (or the EPA: s 91(2)). The notice "may" be given.

(2) The power in s 91 is not exercised for the benefit of either the occupier or the person to whom it is given; rather, the exercise of the power is only for the benefit of the public by dealing with, or preventing, the escape of polluting substances.

(3) The nature of the possible action contemplated by the phrase "cleanup action" in s 91 is likely, in the ordinary course, to place a financial burden on the person obliged by the notice to act.

(4) The notice in s 91 must be complied with, unless a person has a reasonable excuse.

(5) The circumstances that may give rise to a clean-up notice under s 91, or a preventative notice under s 96, or a prohibition notice under s 101 are not clearly segregated. There is, to a degree, a hierarchy of importance or seriousness, but there is potential for overlap of the sections. This multiplicity of bases for action should not be used to limit the scope of any particular step provided for. All are concerned with the public good, by protecting the environment.

(6) The relevant suspicion or belief or opinion is as to the occurrence of a pollution incident (s 91), or the carrying on of an activity in an environmentally unsatisfactory manner, including the occurrence of a pollution incident (s 96) or the serious matters of environmental damage (s 101). The relevant state of apprehension or belief is not one required (at least in terms of the provisions) to be judged having regard to the interests of the person or persons to whom the notice is directed.

(7) The financial consequences of the notices are, to a degree, dealt with. Parliament has not, however, sought to create a statutory avenue for compensation should the views of the relevant authority turn out to be wrong.

(8) The power in s 91 (and ss 96 and 101) is compulsory and enforced by the criminal law. To that extent, an obligation to consider the interests of the person to whom the notice is directed may be seen as inherently in conflict with the direction and focus of compulsory state power.

[236]

It was agreed that the Hunter Water direction "caused significant difficulties for Truegain's continued operations, as it was prevented from discharging any waste water from the [p]remises, including treated waste water generated from waste oil processing and waste water from toilets and offices on the [p]remises."
On 9 March 2016, the EPA varied the Truegain EPL to require it to monitor rainfall at the premises and to conduct a mandatory environmental audit. On 1 April 2016, the EPA suspended the Truegain EPL by suspension notice no 1539166 (the suspension notice). On the same day, the EPA wrote to Truegain and directed it to store all waste in adequately bunded areas.
On 23 August 2016, the EPA inspected the premises and identified oily water in the main bunds. The EPA subsequently wrote to the defendant and Mr Paul Lucas, the then directors of Truegain, to remind them of Truegain's obligations under prevention notice no 1524877 to manage accumulated rainwater in the bunds at the premises. On 26 August 2016, Mr Lucas replied stating that he was retiring that day from Truegain and that all further decisions and administrative and financial control lay with the managing director of Truegain, the defendant.
As at 8 September 2016, there were approximately 200,000 L of waste oil and 60,000 L of PFAS-contaminated waste water stored at the premises. On 15 September 2016, JLA Insolvency & Advisory Pty Ltd, the administrator of Truegain, disclaimed Truegain's liabilities for the premises. On the same day, Mr Javier Parent, the former manager of Truegain, advised the EPA that he had informed the administrator's agent of the ongoing obligations under the conditions of the suspension of the Truegain EPL and the prevention notice no 1524877.
On 19 September 2016, EPA officers inspected the premises and observed that they appeared to be abandoned, that the bunds contained water apparently contaminated by hydrocarbons, and that the underground tank appeared full. On 26 September 2016, EPA officers again inspected the premises to investigate a complaint received by the EPA's environment line that oily water from the premises was entering the stormwater drain. EPA officers observed that the underground tank was full and was overflowing, but that the bunds in the spill containment system had not overflowed.

[248]

• [the defendant] said the underground tank forming part of the spill containment system has a capacity of approximately 50,000[L]. This tank was observed to have a dark to black colour liquid in it and was very close to capacity. [The defendant] stated that they would have to pump it out soon to the on-site storage tanks.

• [the defendant] said that the tank is pumped out into the existing tanks on site as they don't have any oil in them they have been used to hold water from the bund areas.

• Prior to water/oils entering the underground tank, it goes thorough an under and over oil separator. In the separator was a dark coloured liquid with very little colour or consistency change between each of the chambers. The separator appeared to be at least 3/4 full.

• Numerous intermediate bulk containers (IBC's), with the wording oily water were stacked along the driveway access.

• Sumps and grates to the concrete handstand areas were mostly full with black coloured liquid or sludge.

• A dark green/brown coloured liquid was in the concrete bunded area of the southern tank farm, ranging from approximately 200-400mm in height (10% -60% capacity). An oily sheen was observed to the top of the liquid in some locations. [The defendant] said that the tanks have a capacity of approximately 3 million litres.

• A dark green/brown coloured liquid was observed in the tank farm bunded area. The volume of liquid in this area was less than was observed on my inspection of 10 July 2017. No liquid was observed escaping from the tank farm bund. [The defendant] said that there are approximately 100 drums in this area. and the drums contained oily rags. The drums were mostly stacked two (2) high with some at single height.

• IBC's containing oil were located in a bunded area adjacent to the [waste water treatment plant tank farm]. A black coloured oil was in the bund and close to overflowing indicating that one or some of the IBC had been damaged and leaked into the bund.

• A murky green/grey liquid was in the bund area to the [waste water treatment plant] Tank Farm (approximately 1/3 full).

• A number of tanks throughout the site were in a rusty condition.

• 11 shipping containers were located behind the [waste water treatment plant] tank farm, which [the defendant] said some are full with drums with grease oil and others with work equipment.

• At the rear at the premises was a 'grave yard' of empty tanks, tankers, equipment and machinery.

• I ran thorough the clean-up notice 1548804 directions with [the defendant]. I said "Have you removed and disposed of the liquid from the [s]pill containment system?" (direction 1 of the Notice), [the defendant] said "No one will take it". I asked similar questions for directions 2-4 and [the defendant] had the same response "No one will take it".

• [The defendant] said he had quotes from Toxfree to take the waste water but it's $800 per tonne and clean-away cannot take it.

• Currently on-site they are [trailing] activated carbon filters on the premises to remove PFAS from the oily water.

• [The defendant] was requested to undertake an audit of the volume and capacity left in the tanks on site.

• Kosta is managing the premises and is on site for approximately 5 days a week for 4 hours a day.

[253]

• The [p]remises had commenced to flood, a liquid with a hydrocarbon sheen was across the driveway to a depth of up to 200-300mm at the southern end of the driveway and adjacent to the underground tank,

• I could not see the grates to the oil separator near the underground tank thorough the liquid.

• The driveway was flooded from the front to the rear of the southern tank farm.

• The bunds were at approximately 50% full and rapidly filling.

• A strong hydrocarbon odour was present.

• I went along the rear of the buildings adjoining the creek and observed liquid rushing from the [p]remises through a rectangular shape hole at the base of the colourbond wall sheeting. Liquid was flowing from the hole over the ground and into the creek.

• The liquid was flowing from the driveway into and thorough the building and then out as described above into the creek.

• Mr Matthews and Kosta said they had not detected the discharge.

• I notified [Fire and Rescue NSW] (FRNSW) to undertaken an assessment of the premises.

• FR arrived on the premises at approximately 1.30pm, it was agreed to sandbag across the entrance to the premises, the entrance to the building, the rear of the western driveway and rear of IBC's at the end of the driveway. Steve Matthews and Kosta agreed to pump from the underground tank and into the southern tank farm to reduce the immediate flooding.

• FRNSW checked the creek and advised that foaming had been observed in Stony Creek at the end of Gardner Street. Booms were installed at this location.

• I spoke with Mark Hartwell who commenced arranging for tankers to pump out the liquid.

• FRNSW assisted in collecting samples from the discharge point and upstream. The upstream point was in the creek to the south of Kyle Street but may still have been influenced by the discharge point due to turbulence and vegetation in the creek. There were no other safe locations to sample.

• With sandbagging complete the discharge ceased.

• EPA officer Matthew Corradin arrived on the premises at approximately 4pm.

• I collected samples from the liquid on the hardstand driveway entrance and the southern tank farm bund.

• I left the premises at approximately 4.45pm

I took photographs and made notes in Field Notebook 72720 pages 42&43.

SAMPLE RESULTS

[272]

On 19 April 2018, the EPA requested that the defendant empty the underground tank into the bunded areas to ensure maximum capacity was available in anticipation of heavy rainfall. On 19 April 2018, Mr Matthews advised the EPA that the underground tank had been pumped dry with only the sludge remaining at the bottom, and that there was approximately 130 kilolitres (kL) of above ground storage available and excess sand bags which could be deployed if necessary.
On 26 April 2018, the EPA notified Maitland City Council (Council) pursuant to s 212C of the POEO Act that the EPA intended to carry out functions as the appropriate regulatory authority to ensure the clean-up and removal of the contaminated liquids within the spill containment system at the premises.
On 27 April 2018, Mr Matthews advised the EPA that following a rainfall event on 25 April 2018, the premises had received an estimated 25 to 30 tonnes of rainwater which had been pumped from the underground tank into a 55 tonne above ground tank. Mr Matthews advised that the underground tank had no liquid and that there was approximately 90 tonnes of above ground storage, with a "couple of smaller bunds relatively free of water", but that "bund water levels remain high at this stage".
On 27 April 2018, Mr Matthews contacted the EPA proposing to arrange for additional water storage to be installed at the premises by EPS. On 1 May 2018, the EPA received an application from EPS for an environment protection licence to operate a mobile water treatment plant at the premises. On 2 May 2018, the EPA advised Mr Matthews of the EPA's decision to undertake clean-up action at the premises pursuant to s 92(2) of the POEO Act. On 3 May 2018, the EPA engaged GHD Pty Ltd (GHD) to conduct a remediation options report to identify options to prevent further potential discharges from the premises. On 21 September 2018, GHD provided its report to the EPA.
On 4 May 2018, EPS provided further supporting information in relation to its application for an EPL. On 7 May 2018, Mr Matthews emailed the EPA, advising that bund levels were lower; that there was 160 kL of "free room"; that 22 pallets of grease were removed from site; and that "activity for the rest of the week will involve consolidating oil and oily water for testing and offsite disposal and the repackaging of grease drums for external disposal".
On 11 May 2018, the EPA sent the draft variation of clean-up notice no 1564650 to the defendant. On 14 May 2018, Mr Matthews provided a report to the EPA, and on 17 May 2018, the EPA received the defendant's comments on the draft varied clean-up notice.
On 17 May 2018, the EPA advised the defendant of its intention to undertake further clean-up actions at the premises pursuant to s 92(2) of the POEO Act by engaging a contractor to remove contaminated water, noting that the defendant's comments of 17 May 2018 "failed to detail a clear course of action, timeframe or financial capacity to clean-up the [p]remises and remove the pollution".
Also on 17 May 2018, the EPA released a selective tender to the "top five market share organisation services in liquid waste collection services" to remove contaminated liquid from the spill containment system. On 14 June 2018, the tender period ended, one tender having been received from Cleanaway. EPS was not included in the tender process.
On 18 May 2018, the EPA gave the varied clean-up notice to the defendant pursuant to s 110 of the POEO Act, at which time the defendant was the owner and occupier of the premises.

[292]

On 26 November 2018, Mr Matthews emailed a report to the EPA, and on 28 November 2018, EPA officers inspected the premises. Mr Vujkovic advised the EPA officers that the premises had received 18 mm of rainfall in the previous 24 hours, that the underground tank was emptied in the morning, and that he estimated that it was presently about half-full. On 29 November 2018, Mr Vujkovic told EPA officers that "the underground tank was now full and that he was pumping to the [s]outhern [t]ank farm which had approximately 200mm freeboard."
On 3 December 2018, Mr Matthews emailed two reports to the EPA, including a report from RCA Australia dated 3 July 2018 in relation to the results of groundwater monitoring. On 10 December 2018, 13 December 2018 and 17 December 2018, Mr Matthews emailed further reports to the EPA. Between 12 December 2018 and 18 April 2019, Mr Justin Gleeson of EPS provided weekly monitoring reports in relation to the operation of the mobile liquid waste treatment plant at the premises, including details of the quantities of liquid waste treated onsite and disposed of offsite, with tracking sheets and disposal dockets.
On 18 December 2018, EPA officers inspected the premises and observed that the underground tank was full and overflowing around the tank and drains. Several bunds also appeared to be near full capacity. The EPS treatment plant was not running at this time due to the pH probe being replaced. On 18 December 2018, the EPA wrote to the defendant requesting that he immediately arrange for additional waste water storage to ensure that no discharge occurred and that he remove and replace failed and contaminated sandbags. The defendant complied with this request. On 19 December 2018, the defendant responded to the EPA, and noted that the underground tank was now empty, additional sandbags had been purchased, and that the premises had 150 kL of storage capacity should a rain event occur.
On 4 February 2019, Mr Matthews provided the EPA with an updated report from WSP Australia Pty Ltd (WSP) dated 1 February 2019. On 11 February 2019, the EPA inspected the premises. By 13 February 2019, EPS had completed the work required for the milestone 4 payment by treating 1 ML of contaminated water, and was ready to commence treating 2 ML of contaminated water in the above ground tanks. On 18 February 2019, and again on 25 February 2019, Mr Matthews emailed reports to the EPA. The report of 25 February 2019 was Mr Matthews' last weekly report to the EPA on behalf of the defendant.
On 26 February 2019, EPS issued the defendant with an invoice in the amount of $115,029.66 for completion of the milestone 4 works; namely, being ready to commence treatment of the 2 ML of contaminated water (the milestone 4 invoice). The milestone 4 invoice required payment by 5 March 2019. It was agreed that the defendant failed to make any payment towards either the milestone 4 payment or the milestone 5 payment.
Between 28 November 2018 and 14 April 2019, EPS treated 1,866,900 L and disposed of 1,761,850 L of contaminated water from the premises. Between 14 February 2019 and 16 April 2019, EPS performed works associated with the milestone 5 payment, being the treatment of 2 ML of contaminated water to a value of $22,859.14 (excluding GST).
Reports provided by EPS indicate that the amounts of contaminated water processed by EPS and removed from the premises in the period between 28 November 2018 and 14 April 2019 were as follows:

[298]

On 30 May 2019, the defendant advised EPA authorised officer Ms Lange that his finance "on the premises had been knocked back", and that he was looking to sell another property in Queensland, but that "this would not be a quick solution".
On 3 September 2019, the EPA inspected the premises and was advised by Mr Vujkovic that the premises had received approximately 50 mm of rain over the last few days. The EPA observed a significant amount of water in the tank farm 108 area. That water was being pumped out of the underground tank to the southern tank farm; and the remaining storage capacity was only in the bunded areas and the underground tank.
On 5 September 2019, the EPA issued to the defendant show cause letter no 1584805 (show cause letter no 1584805), inviting him to show cause why the EPA should not take regulatory action in respect of a suspected breach of s 91(5) of the POEO Act by him in failing to comply with direction 7 of the varied clean-up notice. On 6 September 2019, Mr Chris Kintis of Clarke Kann Lawyers wrote to the EPA in response to show cause letter no 1584805 on behalf of the defendant and Glowbye. On 19 September 2019, the EPA received an email from the defendant in response to show cause letter no 1584805.
On 23 October 2019, the EPA inspected the premises and observed that volumes of water in various bund areas seemed to have dropped since the most recent inspections.
On 24 October 2019, EPS commenced civil proceedings against the defendant in the District Court of NSW seeking judgment in the amount of $163,232.30 for amounts due under the contract plus interest and costs.
On 19 March 2020, Glowbye engaged WSP to inspect the premises and provide a report summarising "the infrastructure and waste remaining on the site" and "estimating the scope of works and cost required to remediate the site." WSP provided to Glowbye a report dated 1 May 2020 (the WSP report).
On 26 May 2020, EPA officers inspected the premises which were unattended. On the same day, the EPA was advised by Mr Vujkovic that he had commenced other employment, and that he no longer attended the premises or performed his former duties as a site caretaker.
Between June 2020 and October 2020, Cleanaway attended the premises and pumped out the spill containment system and removed approximately 468,280 L of contaminated rainwater that threatened to discharge from the premises, and issued 2 invoices for those works which amounted to $897,706.98.
Between 4 June 2020 and 19 June 2020, there was an estimated 2.1 ML of contaminated water present in 62 above ground tanks, with 38 above-ground tanks estimated to contain 347,000 L of non-aqueous phase liquids.

[407]

Pursuant to s 91 of the POEO Act, the appropriate regulatory authority may by notice in writing direct certain persons to take specified clean-up action where the authority reasonably suspects that a pollution incident has occurred or is occurring. The defendant referred to the definitions of 'clean-up action' and 'pollution incident' in the Dictionary to the POEO Act and submitted that on a proper construction of s 91 and the definition of 'clean-up action' in the Dictionary, in order for a clean-up notice to be valid, there must be a connection between the "pollution incident identified in the [initial clean-up] notice and the clean-up action required". The defendant submitted that the initial clean-up notice (given 5 June 2017) identified the pollution incident in respect of which the defendant was directed to take clean-up action in the background section of the initial clean-up notice, and submitted that the pollution incident the subject of the initial clean-up notice was "the likely discharge, in the event of rainfall, of the contaminated liquids within the [p]remises [s]pill [c]ontainment [s]ystem via stormwater drains located on the premises to the environment". The defendant submitted that at that time, on 5 June 2017 there was "no suspicion of a pollution incident in relation to the liquids contained in the above ground tanks".
The defendant submitted that the varied clean-up notice (given on 18 May 2018) likewise did not identify any pollution incident in relation to the above ground tanks. Like the initial clean-up notice, the varied clean-up notice focused on a discharge, in the event of rainfall, from the spill containment system. There was no express reference to a likely spill from the above ground tanks. Accordingly, the defendant submitted, there was no connection between the "pollution incident" identified in the varied clean-up notice and direction 7 of the varied clean-up notice, and that direction 7 was therefore invalid.
In closing submissions, counsel for the defendant re-iterated that there was "no reference at all to a potential spill from the above ground tanks" in either the initial clean-up notice or the varied clean-up notice:

[413]

Further, in support of his challenge to the validity of direction 7, the defendant submitted that the prosecutor did not form a reasonable suspicion that a pollution incident had occurred or was occurring in relation to the above ground tanks. A jurisdictional prerequisite, it was submitted, to the "making" of a valid clean-up notice is the formation of a reasonable suspicion by the appropriate regulatory authority that a pollution incident has occurred or is occurring. This requires the prosecutor to establish that: (1) the appropriate regulatory authority subjectively formed the suspicion; and (2) objectively judged, the suspicion was reasonable, the reasonableness of the suspicion to be judged on the information available to the person who formed the suspicion at the time the suspicion was formed.
The defendant submitted that the prosecutor had not established that the delegate who gave the initial clean-up notice (Mr Hartwell) subjectively formed a suspicion that a pollution incident relating to the above ground tanks had occurred or was occurring. The initial clean-up notice sets out the background to the giving of the notice (some of which is extracted above at [14 ]). That was submitted to be the only evidence that could assist the Court in determining whether Mr Hartwell subjectively formed a suspicion about a pollution incident related to the above ground tanks and the basis for that suspicion, as the prosecutor did not call Mr Hartwell to give evidence. Further, the defendant submitted that the prosecutor had not established that the delegate who gave the varied clean-up notice (Ms Marler) subjectively formed a suspicion that a pollution incident relevant to the above ground tanks had occurred or was occurring at the time the varied clean-up notice was given. There was no expression of any such suspicion in the varied clean-up notice, and in her affidavit dated 3 December 2020, Ms Marler did not attest to the formation of any suspicion that a pollution incident had occurred or was occurring in relation to the above ground tanks.
While there was reference in the varied clean-up notice to liquids in the above ground tanks and uncertainty as to the structural integrity of the above ground tanks, there was no expression of a reasonable suspicion that a pollution incident in relation to those tanks had occurred or was occurring. The background in the varied clean-up notice (extracted above at [17 16 ]), like that in the initial clean-up notice, referred to "a potential discharge of liquids from the spill containment system in the event of rainfall". The defendant submitted that there was no mention of concern, for example, in relation to a pollution incident in the event of failure of one or more of the above ground tanks.
Further, the defendant submitted that to the extent that the prosecutor is able to establish that it subjectively formed a suspicion in relation to the above ground tanks, objectively that suspicion was not reasonable in the circumstances, "the reasonableness of the suspicion [having to] be assessed on the basis of the information that was actually available to the person who formed the suspicion at the relevant time". There was no evidence in relation to the material or information that Mr Hartwell considered when issuing the initial clean-up notice, other than the notice itself. There was "some evidence from Ms Marler as to matters of which she was aware as at the date of affirming her affidavit", but it was difficult to distinguish which of those matters she was aware of at the time of issuing the varied clean-up notice. The matters referred to by Ms Marler in her affidavit were known to her at the time of issuing the varied clean-up notice: "[h]owever, none of those matters would give rise to a reasonable suspicion in relation to a pollution incident from the above ground tanks".
The defendant referred to the evidence relied upon by the prosecutor as supporting a "reasonable suspicion" in issuing the initial clean-up notice and the varied clean-up notice, some of which included the following:

[414]

(1) the background to the initial clean-up notice some of which is extracted above at [14 ], including paragraph 19 which is expressed as an opinion;

(2) a number of agreed facts;

(3) part of the exhibit to Ms Lange's affidavit dated 4 November 2020 which included:

(a) EPA inspection reports dated 21 March 2018, 22 March 2018, 23 March 2018, 26 March 2018, 3 April 2018, and 11 April 2018;

(b) correspondence between Mr Matthews and Ms Lange dated 29 March 2018 regarding CTP, "proposed immediate plans for the site", and "medium plans ~ existing liquid waste legacy"; and

(c) a report addressed to Ms Lange dated 11 April 2018 from the NSW Office of Environment & Heritage, titled "Report of Analysis" which included a table of test results of samples and chemicals found in the samples;

(4) the affidavit of Ms Marler affirmed 3 December 2020 in which Ms Marler said:

(a) "on 21 March 2018, I became aware of a pollution incident at the premises when EPA Officer Mark Hartwell informed me of observations made by EPA officer Jenny Lange of a discharge occurring at the [p]remises during her inspection on that day"; and "I understand from that discussion, and from reviewing the inspection report ... prepared by Ms Lange, that a pollution incident was occurring involving contaminated liquids discharging from the [p]remises and which entered adjacent waters in Stony Creek";

(b) "[b]etween 21 March 2018 and 22 March 2018, [Tox Free] pumped out 63,240 litres of liquid waste from the System and transported and disposed of it at Cleanaway's wastewater plant at Homebush, NSW"; and

(c) "[o]n 19 April 2018, I sent an email to [the defendant] conveying the severe weather warning for the Maitland area and directing him to empty the underground tank into the bunds"; "[o]n 19 April 2018, [Mr] Matthews replied to my email of 19 April 2018"; "[o]n 21 April 2018, [the defendant] sent a letter dated 20 April 2018 to me of the EPA"; "[o]n 22 April 2018, [the defendant] sent a letter dated 20 April 2018 to me"; on "23 April 2018, Mr Matthews sent an email to David Simm, Manager of Development for Maitland City Council, copying in myself and Jenny Lange of the EPA"; on "26 April 2018, the EPA gave Maitland Local Council notification pursuant to s 212C of the POEO Act that it intended to take action as the appropriate regulatory authority"; that on "27 April 2018, Mr Matthews sent an email to me"; on "27 April 2018, Mark Hartwell of the EPA attended a meeting with [the defendant], Mr Matthews and Maitland Council; and Mr Hartwell emailed to me that day a report on the meeting".

(5) part of the exhibit to Ms Marler's affidavit (which was tendered) which included:

(a) an email from Ms Marler to the defendant and Mr Matthews dated 19 April 2018 about a "Severe Weather Warning for Maitland" in which Ms Marler stated as follows:

[420]

Further, the defendant submitted, it was necessary to address the Office of Environment and Heritage's Report of Analysis titled "Report 201800140" dated 11 April 2018 (the report of analysis) which was relied on by the prosecutor and admitted on a limited basis over objection. The report of analysis included details of three samples, GS-01, SC-02 and SC-03, and the prosecutor submitted it demonstrates "PFAS was available on the site". The prosecutor had asked the Court to infer that the three samples were taken on 5 April 2018 from Stony Creek and Gardiner Street which could be seen relative to the premises in the satellite photograph (reproduced above at [45 ]). The defendant submitted that without a more precise identification of the location from which the samples were taken, the samples could not found any basis for a reasonable suspicion of a pollution incident from the premises. In relation to the above ground tanks, it was also relevant that the defendant "locked off" those tanks at the request of the prosecutor on 25 July 2017.
The defendant also referred to the background to the varied clean-up notice which included that there had been "no or minimal maintenance of the above ground tanks" since September 2016, and that the structural integrity of the tanks was "uncertain". The lack of maintenance of tanks for a period of less than two years was submitted not to be sufficient to form a reasonable suspicion that there was a "real and not remote chance or possibility that there will be a leak, spill or escape of liquid from those tanks". That fact and the consequential uncertainty about the structural integrity of the tanks would not cause a reasonable person to suspect a pollution incident in relation to the tanks. In any event, the above ground tanks were within bunded areas "which were designed to have sufficient capacity to retain liquids in the event of failure". Accordingly, there could have been no reasonable suspicion of a pollution incident in relation to the above ground tanks on 18 May 2018 when direction 7 was given.
Ms Sims submitted as follows:

[428]

In relation to whether the prosecutor was the appropriate regulatory authority in relation to the above ground tanks, the defendant referred to the prosecutor's contention that it was the appropriate regulatory authority on 18 May 2018 (the date the varied clean-up notice was given) because, on that date, the premises were being used for the scheduled activity of waste storage, namely storage of more than 60 tonnes of waste oil and more than 5 tonnes of liquid waste. The defendant submitted that the prosecutor had not identified any evidence to establish that the scheduled activity was being carried out on the premises as at that date.
In relation to the agreed fact that "the EPA is the appropriate regulatory authority and may institute proceedings for offences against the [POEO] Act: s 217(1)", the defendant submitted that the "subject of this ... is clearly the [p]rosecutor's power to institute proceedings for an offence under the POEO Act". The agreement was that "the [p]rosecutor may institute the subject proceedings". In relation to the agreed fact that "at the time the [initial] [c]lean-[u]p notice was issued the EPA was the appropriate regulatory authority as the [p]remises was still subject to the EPL under s 6(1) of the [POEO] Act", the defendant said that it was agreed that the prosecutor was the appropriate regulatory authority on the date that the clean-up notice was given, at which time the Truegain EPL was extant. However, by the time the varied clean-up notice was given, the EPL had been revoked. On the last day of the hearing, Ms Sims orally submitted that s 6 of the POEO Act "has the consequence that as circumstances change the appropriate regulatory authority may change", and that "to the extent that [the agreed fact] refers to the EPA as an appropriate regulatory authority ... [that] is not a fact but a legal conclusion and the factual basis for that legal conclusion being whether or not there was a scheduled activity conducted on the premises on the relevant date is a disputed fact". Ms Sims then submitted that if the Court does not accept her submissions, she seeks leave pursuant to s 191 of the Evidence Act to "traverse the fact", and submitted that "in relation to the above ground tanks, the prosecutor was not the appropriate regulatory authority". Ms Sims further submitted that:

[432]

The defendant also referred to the definition of the activity of "waste storage" in cl 42(1) of Schedule 1 to the POEO Act as "the receiving from off site and storing (including storage for transfer) of waste", and submitted that the activity to which cl 42 applies is declared to be a scheduled activity if certain thresholds for different waste types are met. The relevant threshold for the storage of waste oil was submitted to be 60 tonnes (cl 42(2)(b)(iv)), and for the storage of liquid waste 5 tonnes (cl 42(3)(a)). However, cl 42 does not apply to the storage of stormwater: cl 42(2)(a). To the extent that there was water within the above ground tanks, bunds and "underground tanks" and pits on 18 May 2018, the defendant submitted that the water was stormwater, and hence cl 42 did not apply.
Further, the defendant submitted, prior to entering liquidation in September 2016, Truegain carried out the scheduled activity of waste storage at the premises; however, after September 2016, no waste was received from offsite. While efforts were being made to clean-up the premises, including removing waste, the scheduled activity of "waste storage" was not carried out. The defendant accepted that the prosecutor was authorised to carry out the functions of the appropriate regulatory authority for the purposes of the POEO Act to ensure the clean-up and removal of the contaminated liquids within the spill containment system at the premises. This is because on 26 April 2018, by letter addressed to Mr David Evans, general manager of Council, Ms Marler gave notice to Council pursuant to s 212C of the POEO Act that it had carried out functions in relation to the spill containment system and proposed to continue that work (the s 212C notice) (agreed fact). However, that notice did not relate to the above ground tanks, a different "work" to the spill containment system. The s 212C notice also expressed doubt about who was the appropriate regulatory authority (ARA) in relation to the premises:

[435]

Ms Marler refers to a pollution incident in March 2018. And ... gives a notification pursuant to s 212C of the [POEO Act] that the EPA intends to carry out the full functions of the appropriate regulatory authority to ensure the clean-up and removal of the contaminated liquids within the spill containment system at the premises.

...

turning to 212C, the section applies if a regulatory authority exercises functions relating to an activity or work that is not authorised or controlled by an EPL ... Ms Marler was writing to the council because the EPL had been revoked, and she wasn't sure whether or not the EPA was the appropriate regulatory authority.

[Subsection] (2) requires the regulatory authority to notify the appropriate regulatory authority of the functions that it has exercised and of any functions that it proposes to continue to exercise or to cease to exercise... And [subsection] (3) authorises the authority in those circumstances to continue to exercise the functions that it has notified. ... The council didn't write back to the EPA and say, "No we'd prefer if you didn't exercise those functions." ...

It applies where the authority has exercised functions in relation to an activity or work, and in my submission the function exercised by the EPA that is the subject of the letter, is a function in relation to a work, and the work is the spill containment system on the premises. Because that is the notification that was given.

...

So [in subsection 6(1) of the POEO Act], the EPA is the [appropriate regulatory authority] except as provided by the section, and then there's two exceptions. ... Nothing in [subsection 6](3) arises ... [subsection] (2). ... Maitland Council in this case, is the appropriate authority for non-scheduled activities, except in relation to (a) licences, and there was no licence operating in relation to these premises. And (b) also relates to licences. (c) relates to activities carried on by public authority which doesn't arise here. (c1) network operator doesn't arise, and (d) is referring to [subsection] (3) which doesn't arise.

...

the only matter that really arises is whether an activity was carried on at the premises that was a scheduled activity or not. So if it's a non-scheduled activity ... then the local council is the regulatory authority. If it is a scheduled activity, then [subsection] (2) doesn't apply and it falls into [subsection] (1). So ... if the circumstances change, the regulatory authority can change. Firstly, one of the circumstances is whether or not an EPL applies to the site, and that was a relevant change ..., and is referred to in Ms Marler's letter ... the second change is, whether or not a scheduled activity was carried out on the premises.

[451]

(1) Between October 2016 and mid-2019 (after the date of the varied clean-up notice), the defendant says he took steps to avoid discharge of contaminated water from the premises, including "pumping water from the underground tanks into the bunded areas or and pumping water from the underground tanks or bunded areas into the above ground tanks to create freeboard in the underground tanks and bunds".

(2) After the initial clean-up notice was issued on 5 June 2017, the defendant says he continued to manage water on the premises "by pumping from the underground tank into the bunds and above ground tanks".

(3) On 1 September 2017 during an inspection of the premises by EPA authorised officer Ms Lange, the defendant said that "the tank is pumped out into the existing tanks on site as they don't have any oil in them. They have been used to hold water from the bund areas"; that the "tanks have a capacity of approximately 3 million litres", and that the defendant "was requested to undertake an audit of the volume and capacity left in the tanks on site".

(4) On 22 March 2018, Ms Lange inspected the premises and noted inter alia that "Steve Matthews proposed to Ms Lange that water in the tank farm bunds would then be pumped into tanks"; that Mr Matthews said that he "can't see the need as it had stopped raining and we have capacity in the tanks"; that Ms Lange informed Mr Matthews that the initial clean-up notice "required the removal of liquid, not pumping it around the premises" to which Mr Matthews replied "the wording of the notice does not say cannot move it around" (emphasis added).

(5) On 23 March 2018, Mr Vujkovic and representatives of EPS advised that additional storage, being three 23,700 L tanks, would arrive at the premises after Easter 2018.

(6) After March 2018, the defendant says that no more water was pumped into the above ground tanks.

(7) On 3 April 2018, EPA officers again inspected the premises and Ms Lange made notes including the following: that Mr Matthews said that "he believes that there is roughly 3 ML of contaminated liquid on site with approximately 2 ML of PFAS contaminated liquid - this includes the spill containment system and the above ground tanks"; two 23,000 L poly-tanks were on the premises and "can be used as emergency storage of liquids" (emphasis added).

(8) On 27 April 2018, Mr Matthews advised the EPA that following the rainfall event on 25 April 2018 and the premises receiving an estimated 25 to 30 tonnes of rainwater which had been pumped from the underground tank into a 55 tonne above ground tank, the underground tank had no liquid and there was approximately 90 tonnes of above ground storage.

(9) The varied clean-up notice given on 18 May 2018 includes a background section which provides, amongst other things: at D(a), that the EPA understands that since the initial clean-up notice "was issued" on 5 June 2017, contaminated liquid from the spill containment system has been pumped into above ground tanks located on the premises and that these tanks are now full; at D(b), that the EPA understands that there has been minimal or no maintenance of the above ground tanks since a former occupier of the premises, Truegain, was placed in liquidation in September 2016 and that the structural integrity of the tanks is uncertain; and at D(e) that the inability of the contaminated liquid to be contained on the premises in the event of rainfall, constitutes a set of circumstances, as a consequence of which there is likely to be, a leak spill or other escape of substance, as a result of which pollution is, or is likely to occur.

(10) On 18 May 2018, against this background, the EPA gave the varied clean-up notice to the defendant pursuant to s 110 of the POEO Act, requiring the action specified in direction 7, namely that by no later than 5pm on Friday 31 August 2018, the defendant "process, remove and lawfully dispose from the premises all liquids contained within all above ground tanks".

[472]

The matters set out above at [192 ]-[195 ] in relation to the defendant's "no connection" submission also bear upon the question of the prosecutor's reasonable suspicion that a "pollution incident" had occurred or was occurring in relation to the above ground tanks. That material establishes that the EPA subjectively formed the suspicion and that objectively judged, the suspicion was reasonable. I have considered the reasonableness of that suspicion on the basis of information available to the person who formed the suspicion, namely Ms Marler. It is not to the point that the prosecutor did not call Mr Hartwell, who gave the initial clean-up notice, to give evidence.
I find beyond reasonable doubt that the prosecutor subjectively formed a suspicion in relation to the above ground tanks and that, objectively, that suspicion was reasonable in the circumstances. The varied clean-up notice is plain on its face that the prosecutor had formed a suspicion that a "pollution incident has occurred or is occurring" involving the above ground tanks. There was a real and not remote chance or possibility of a leak, spill or escape of contaminated liquid, including PFAS contaminated liquid, from the above ground tanks, the structural integrity of which had been clearly identified by the prosecutor in the varied clean-up notice.
As Biscoe J said in Kempsey Shire Council v Slade in relation to a reasonable suspicion, referring to the High Court in George v Rockett (George v Rockett)[17], there is a distinction between suspicion and the firmer mental state of belief. And in R v Rondo,[18] Smart AJ (Spigelman CJ and Simpson J agreeing) said that emerging from the authorities, including George v Rockett, is the proposition that a reasonable suspicion involves less than a reasonable belief, but more than a possibility. A reasonable suspicion is not arbitrary, and the factual basis for the suspicion must be shown. Here, there was plainly some factual basis for the suspicion, those facts being sufficient to induce such suspicion in a reasonable person, somewhere on "a spectrum between certainty and irrationality", something more than "a mere idle wondering".
Taking a "holistic" view of the totality of the evidence which was available to the EPA as at 18 May 2018 when the varied clean-up notice was given, considered in light of all the facts known or reasonably capable of having been known to the EPA at that time, I am satisfied beyond reasonable doubt that the prosecutor had a reasonable suspicion in making direction 7 of the varied clean-up notice that a "pollution incident" had occurred or was occurring in relation to the above ground tanks.
The third aspect of the defendant's challenge to the validity of direction 7 was whether the prosecutor was the appropriate regulatory authority in relation to the above ground tanks. I am satisfied beyond reasonable doubt that the prosecutor was the appropriate regulatory authority in relation to the above ground tanks as at 18 May 2018. The defendant's submission in relation to the agreed fact being "clearly the prosecutor's power to institute proceedings for an offence under the POEO Act" has considerable force. However, notwithstanding that the Truegain EPL had been suspended on 1 April 2016 and revoked on 5 January 2018 prior to the giving of the varied clean-up notice on 18 May 2018, I do not accept that the scheduled activity of "waste storage" was not carried out following the liquidation of Truegain on 14 September 2016.
To the extent that a question arose as to who was the appropriate regulatory authority in relation to the premises after the Truegain EPL was revoked on 5 January 2018 prior to the giving of the varied clean-up notice on 18 May 2020, I accept the prosecutor's submission that s 212C(3) of the POEO Act has to be read in conjunction with s 212D. Even if, as submitted by the defendant, s 212C was "triggered" and the EPA was no longer the appropriate regulatory authority in relation to the premises, the combination of ss 212C(3) and 212D has the effect that the prosecutor could continue to exercise the functions commenced by an authorised officer as if the functions had been exercised by the appropriate regulatory authority or an authorised officer of that authority. Here, it was an agreed fact that the EPA was the appropriate regulatory authority on the date the initial clean-up notice was given (5 June 2017) as the premises were then still subject to the Truegain EPL. In the s 212C notice given to Council on 26 April 2018, and headed "Former Truegain Pty Ltd premises - 62 Kyle Street Rutherford Notification pursuant to Section 212C of the Protection of the Environment Operations Act 1997", the EPA provided the following notification pursuant to s 212C of the POEO Act:

[474]

It follows that having found that by operation of ss 212C(3) and 212D of the POEO Act the EPA continued to be the appropriate regulatory authority after the Truegain EPL was revoked, I do not need to address the defendant's submissions in relation to the withdrawal of an agreed fact. However, if I be wrong, and the defendant requires leave to withdraw an agreed fact, I would grant leave but maintain my finding, on the basis of the evidence before me and the construction of ss 212C(3) and 212D of the POEO Act, that the prosecutor was the appropriate regulatory authority in relation to the above ground tanks.
In similar circumstances, in Environment Protection Authority v Ramsey Food Processing Pty Ltd (EPA v Ramsey Food),[19] the defendant made an application for leave on the third day of a sentencing hearing in relation to pollution offences to "contradict or qualify facts agreed" in some 19 paragraphs of the parties' statement of agreed facts filed approximately 10 weeks prior to the hearing. The facts were sought to be contradicted or qualified in order to make three contentions relating to the extent of environmental harm caused by the offence: firstly, that upstream of the confluence the effluent from a cracked pipe did not travel east to the creek (the first contention); secondly, that downstream of the confluence the effluent did not travel as far as was agreed (the second contention); and thirdly that as a consequence of the second contention, the pollution caused by the defendant's activities presented only a potential health risk to an unspecified part of the creek waters that it reached (the third contention).
Biscoe J said at [11] that the Evidence Act did not apply because "in a sentencing proceeding the Evidence Act only applies if the court directs that the law of evidence applies in the proceedings and no such direction has been sought or made: s 4(1)". However, his Honour observed, it was common ground that the defendant required leave to contradict or qualify agreed facts. Accordingly, his Honour considered that the matters listed in s 192(2) should be taken into account. At [16], Biscoe J said:

[501]

That is, the defendant submitted, the prohibition notice charge relates to the spill containment system defined in the notice, the above ground tanks not forming part of the spill containment system as defined. The amended consolidated particulars in relation to the prohibition notice charge are extracted above at [10 ]. The defendant's case was that on a proper construction of the prohibition notice, he was not required to do any positive acts, but was restrained from carrying on specified activities. During the charge period, he did not carry on either of the activities that he was directed to cease carrying on by the prohibition notice.
In relation to s 101 of the POEO Act, the defendant submitted that the scope of a prohibition notice is a direction to cease carrying on an activity, and that it is not a notice requiring positive action to be taken other than acts required to cause the activity to cease. Further, the scope of a prohibition notice should be considered in the context of the POEO Act as a whole which includes the power to give prevention notices and clean-up notices and which expressly contemplates the power to require actions to be taken. Further, s 96 enables the appropriate regulatory authority to direct certain persons to take specified action to ensure that an activity is carried on in future in an environmentally satisfactory way. Section 96(3) provides examples of the types of actions that may be required to be taken under a prevention notice. Section 91 was submitted to enable a clean-up notice to be given directing a person to take "clean-up action" when a "pollution incident" has occurred or is occurring. By contrast, s 101 does not contemplate a prohibition notice directing a person to take action.
In terms of the prohibition notice itself, the defendant noted that "storage" and "keeping" are not defined in the prohibition notice, and that according to the Oxford English Dictionary Online:[26] (1) storage can refer to "the action of storage or laying up in reserve; the condition or fact of being stored"; and (2) the verb "keep" means to "[a]ctively hold in possession; to retain in one's power or control; to continue to have, hold or possess". Each of those words (storage and keep) was submitted to have both an active sense and a passive sense. Ms Sims submitted that "it's read strictly, or where there's an ambiguity, it's in favour of the defendant", referring to Beckwith v The Queen.[27] It was "understood that" the prosecutor did not allege that the defendant "placed waste or substances in storage or actively held waste or substances in his possession at the premises during the charge period". Rather, it was "understood that the prosecutor's case was that the prohibition notice required the defendant to do something by positive acts, rather than cease to carry on an activity." The prosecutor had not identified what it was that it said the defendant was required to do by the prohibition notice. Referring to the majority in Kirk v Industrial Relations Commission of New South Wales (Kirk)[28] (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ (Heydon J agreeing)) at [14]-[15], the defendant submitted that in criminal proceedings, where there is an allegation of a failure to act, the prosecutor must identify the act that it says the defendant was required to do and failed to do.
The defendant submitted that the words "storage" and "keeping" in the prohibition notice should be interpreted "in their active senses", with the consequence that what the defendant was required to do to comply with the prohibition notice was (1) to cease placing waste in storage in the spill containment system and in tanks etc on the premises; and (2) to cease actively holding in his possession on the premises certain substances. A further indication that the prohibition notice did not require the defendant to do something, rather than to cease carrying on an activity, was submitted to be that the prohibition commenced with immediate effect. If "positive acts were required to be carried out", then "it would be expected that a reasonable time would be provided within the prohibition notice for those acts to be undertaken." The defendant ceased carrying out the prohibited activities, and no waste was received at the premises by any person after Truegain went into administration (on 14 September 2016). After "about mid-2019", the defendant did not undertake any activities on the premises and, specifically, did not place any liquid wastes or other substances into the spill containment system. To the extent there were liquids within the spill containment system, that was the result of rainwater falling on the premises and entering the bunds and underground pits and tank that comprised the spill containment system. This occurred without any intervention by the defendant; that is, the defendant did not carry out any act of storing or keeping this rainwater in the spill containment system.
Ms Sims submitted that the prohibition notice was "not a notice requiring the carrying out of positive acts", and as follows in relation to other powers in the POEO Act:

[504]

I accept the prosecutor's submissions in relation to the prohibition notice charge, in particular, in relation to the proper construction of ss 101 and 102 of the POEO Act and the scope of a prohibition notice, and find that the prosecutor has proved, beyond reasonable doubt, that the defendant did not comply with the prohibition notice. In particular, I am satisfied that the prosecutor identified what it is alleged that the defendant was, by the prohibition notice, required to do.
It is true, as submitted by the defendant, that no waste was received at the premises after 14 September 2016 (the date of liquidation and the date all staff were terminated), and that the prohibition notice commenced with immediate effect. However, I find that the word "storing" in the prohibition notice (given on 25 August 2020) should be interpreted as defined in the extract from the Oxford English Dictionary Online extracted above as "the action of storage or laying up in reserve; the condition or fact of being stored" or ", and the verb "keep" as "[a]ctively hold in possession; to retain in one's power or control; to continue to have, hold or possess". These definitions are materially the same as those extracted from the Macquarie Dictionary, 9th ed (2023), where the definitions of "store" include "to supply or stock with something, as for future use", "Also, store-up to lay up or put away, as a supply for future use" and "to deposit in a storehouse, warehouse, or other place, for keeping". Further, "keeping" is defined as "the act of someone or something that keeps", and "keep" as "to have the charge or custody of" and "to save, hold, or retain in possession". I find that the prohibition notice did require the defendant to do something, and did identify the act the defendant was required to do: cf Kirk at [14]-[15]. It was, contrary to the defendant's submission, a notice requiring the carrying out of positive acts, that is the cessation of the activities of "storing waste and keeping substances that are harmful or potentially harmful to the environment."

[529]

(1) The EPS contract was not a fixed price contract, rather it incorporated the proposal dated 21 August 2018 which set out a schedule of rates in Appendix 1 and milestone payments in Appendix 2. Milestones 1 to 5 were fixed amounts, but milestone 6 would be a "final reconciliation" after the water treatment plant was demobilised. Further, the note below the table in Appendix 2 provided that the "schedule of rate items (Table #5) are not included and to be charged progressively". Accordingly, it "was not true that $100,000 was all that was left to pay to the EPS for the works the subject of the EPS contract".

(2) Even if EPS had performed all the work under the EPS contract, this would not have ensured that the initial clean-up notice was complied with. It may have completely satisfied directions 6 and 7, but it "certainly did not include [d]irection 10". The EPA proposal was to treat an estimated 3,000,000 L of PFAS contaminated water, the work to be conducted in two phases. The first phase concerned surface water that had already been sampled and characterised and estimated to be in a quantity of 1.5 ML. This was completed between November 2018 and April 2010 with a total of 1,866,900 L of water treated, and achieved compliance with direction 6. The second phase was for tank water. This was related to direction 7. It was "not clear whether the water in those tanks would have been more than the 1,133,100 litres remaining to be processed under the EPS contract". What was certain is that the EPS contract did not include any proposal that would comply with direction 10.

(3) The EPS contract excluded certain costs, including the significant cost of transporting treated water from the site for disposal. The defendant paid Tox Free and "CAC" directly for this. The trust ledger for the loan from Gevin includes payments to Tox Free of $3,122.03 on 12 December 2018, $8,574.98 on 22 January 2019, $7,814.98 on 22 January 2019, and $6,246.41 on 1 February 2019. Payments to "CAC" were $4,049.50 on 12 December 2018 and $5,399.33 on 1 February 2019.

[534]

The defendant submitted that he did in fact draw upon his (and his wife's) personal finances to fund the clean-up, including $245,000 in superannuation. After Truegain went into liquidation in September 2016, he started to sell or re-finance the properties and assets that he owned to fund the clean-up. By 2018, he had started to run out of money because he had no income and had spent all his money paying the interest on loans he had taken out to fund the clean-up. He also borrowed from lenders, and sought to establish a new business on the premises as set out in the agreed facts reproduced above at [143 ]-[154 ]. He engaged business partners and established a company, CTP (which was registered on 17 January 2017), with a view to establishing a facility for treatment of water contaminated with PFAS. However, CTP did not raise enough capital to get off the ground. He also sought to lease out or sell the premises, but could find no interested tenants or purchasers. On several occasions, he advised the EPA that he did not have the financial capacity to clean-up the premises and requested assistance by way of a loan or grant. Those requests were refused.
Ultimately, the defendant estimated that he spent "about $2.5 million" between 2016 and 2020 trying to clean-up the premises and comply with the initial clean-up notice, the varied clean-up notice and an earlier prevention notice: "Approximately $200,000 was spent in 2016, with the rest spent later". He submitted that he was "transparent" that this expenditure included, in addition to the direct costs of complying with the EPA notices, payments to Mr Vujkovic (about $450,000 between October 2016 and early 2020), Mr Matthews (about $250,000 between March 2018 and mid-2019), Mr Peter Wright ($100,000), interest and other loan expenses, costs of Wilson Planning to assist him with council approvals, legal expenses, and living expenses for him and his family ($200,000 to $250,000).
Ms Sims submitted that Mr Pullinger's evidence should be accepted. His affidavit was read with limited objections. He had been challenged on his estimate of $2.5 million and said that "he was confident of that number, approximately". At no point in cross-examination was it put to him that he was mistaken or lying about that estimate. His evidence was that he did not hold the books and records of Truegain and related entities because these were long ago delivered up to the respective liquidators. His financial arrangements during this period were conducted through related entities, including Glowbye, Donpat and Bellham. The prosecutor had conducted extensive investigations into the defendant's financial position, the result of which was consistent with the defendant's evidence.

[536]

For the purpose of determining whether he had a reasonable excuse for failing to comply, or failing fully to comply with direction 7 and direction 10 of the varied clean-up notice, and with the prohibition notice, the defendant submitted that it was relevant to consider the steps taken by him to seek to comply with those requirements, and the steps taken by him to seek to comply with other environmental obligations. The other environmental obligations submitted to be relevant were the defendant's obligation to comply with "an earlier prevention notice", the requirement not to pollute waters, other directions in the varied clean-up notice, and other directions (formal and informal) given by the prosecutor.
The defendant submitted that when Truegain went into liquidation in September 2016, there were various waste and other materials on the premises, including waste hydrocarbons, and the premises were contaminated with PFAS. As rain fell on the premises, it accumulated in the bunds and "underground tanks" and became contaminated with hydrocarbons and PFAS. There was a risk, without active management, that contaminated water would be discharged from the premises, resulting in water pollution. From time to time, the prosecutor directed the defendant to take steps to avoid such discharges. Between October 2016 and mid-2019, the defendant took steps to avoid discharge of contaminated water from the premises, including pumping water from the "underground tanks" into the bunded areas and pumping water from the "underground tanks" or bunded areas into the above ground tanks to create freeboard in the underground tank and bunds. The prosecutor advised the defendant that "it would be crucial to engage or employ someone to ensure that all wastewater would be managed appropriately to prevent any discharges from the [p]remises". He employed Mr Vujkovic to do this.
The defendant referred to the actions he was required to take specified in the prevention notice given on 20 September 2016 which included removing from the premises and lawfully disposing of liquids contained within the underground tank and bunds. On 5 October 2016, he arranged for all liquid waste materials within the underground storage tank and associated pits to be removed and disposed of by Tox Free. He attempted to arrange for removal and disposal of the liquid within the bunds, but was unable to find a suitable contractor once it was identified that the liquid was contaminated with PFAS.
The initial clean-up notice required him to remove from the premises and lawfully dispose of all liquid from the spill containment system (bunds, underground tank and pits) by 23 June 2017, and within 48 hours of any rainfall event. He "attempted to identify and engage a waste transport operator and waste disposal facility to remove and lawfully dispose of the liquid" from the spill containment system. He was "unable to do so, so continued to manage water on the [p]remises by ... pumping from the underground tank into the bunds and above ground tanks". Once it was discovered that the liquid contained PFAS, it became impossible for him to comply with the initial clean-up notice because there were no waste facilities within NSW licensed to receive PFAS material, as was agreed by Ms Marler (director, Hunter Region, EPA). The defendant "investigated whether the wastewater could be treated onsite and the treated water transported from the [p]remises for disposal or disposed of into the sewer (with the appropriate approval from the water authority)."
Mr Matthews (the general manager of CTP) put together a plan, set out in a letter to the prosecutor dated 29 March 2018, which had been prepared in consultation with the defendant and Mr Vujkovic for cleaning up the premises, included some steps required to comply with the initial clean-up notice and other steps. Mr Matthews consulted with mobile waste operators and gave his best estimate of the time required to carry out the steps. Mr Vujkovic and the defendant both recalled that the EPA had told them that the timeframes for compliance with the varied clean-up notice were based on this plan. The defendant submitted that, as explained by Mr Matthews, a number of mobile waste operators were considered, the only operators then licensed to process PFAS being South Coast Liquid Treatment Pty Ltd (South Coast Liquid Treatment) and Haldon. South Coast Liquid Treatment was eliminated because it was located too far away. The defendant obtained a quote from Haldon which "may have been a similar price to that of EPS". EPS was selected because the defendant believed that it had the capability to treat the water and had a convenient facility in Newcastle. Although EPS did not have an EPL, the defendant understood that one could be obtained within 30 days. Mr Matthews gave evidence that EPS was his preferred operator. Mr Klepetko, (principal technical advisor of waste assessment, EPA) gave evidence that "every circumstance is different, and a particular plant can't necessarily treat every circumstance where PFAS is present in liquid waste".
The defendant also referred to EPS having applied on 1 May 2018 for an EPL which was granted on 29 August 2018. The defendant was "not involved in and had no control over the application or determination of the application." As set out in the affidavit of Mr Klepetko, the assessment of an EPL application is "technical and involved numerous correspondence between EPS and the EPA licensing team". The day after the EPS EPL was granted (29 August 2018), the defendant entered a contract with EPS for mobile waste treatment on the premises. On 13 September 2018, EPS mobilised to the site, and on 15 November 2018, commissioning was complete and waste processing had commenced. By about February 2019, water from the bunds and the underground tank was processed in compliance with direction 6. The timeframe for completing this was "much longer than the [d]efendant had anticipated based on the [Mr Matthews'] letter dated 29 March 2018", and was incorporated into the varied clean-up notice. The defendant submitted that "[t]he delays were not within the control of the [d]efendant". In April 2019, EPS ceased processing waste water at the premises, by which time EPS had processed 1,866,900 L from the underground tank, pits and bunded areas, and had not commenced treating water from the above ground tanks.
The defendant submitted that he was also undertaking other activities to clean-up the premises to prevent pollution or contamination from the waste and other materials left behind after Truegain went into administration. Cleaning up the premises was also "required in order to be able either to establish a new business, to lease out the [p]remises, or to dispose of the [p]remises." One of those options was required to fund the clean-up of the premises. The defendant engaged Mr Matthews "to assist him to clean-up the [p]remises for these future uses and to comply with the varied clean-up notice." Mr Matthews arranged for Mr Vujkovic and a range of contractors to "carry out general clean-up of the [p]remises and reported these activities to the EPA regularly." The general clean-up included general site maintenance, including repairs to buildings and electricity, and packaging waste grease in drums for removal by Environmental Treatment Solutions (ETS); the collection of drums of used oil filters by Coast and Valley Oil; the pumping of waste oil out of storage tanks and taken by Coast and Valley Oil; the loading of solid waste into skip bins and taken by JR Richards to landfill; and the taking of scrap steel by Matthews Metal Management. Until about early 2020, Mr Vujkovic continued to attend the premises periodically to manage water accumulating in the underground tank and pumping it into the bunds. After March 2018, no more water was pumped into the above ground tanks.

[550]

262. The only measures taken by Mr Osman-Kerim to address the 17 January Notice are those to which I have already referred. ... the evidence discloses that upon receipt of the oral notice on 16 January 2012, Mr Osman-Kerim telephoned Mr Sidaros, requesting that he attend the [p]remises to "look at the matters raised" in the clean-up notice. He understood that Ms Kemp contacted another plumber who came to the [p]remises but indicated that he was unable to undertake the required task. When Mr Sidaros did not attend promptly, he was contacted "on a few occasions" thereafter concerning the work but had not attended to undertake the work by the time the second fire occurred on 23 January. Mr Sidaros was the only plumber that Mr Osman-Kerim contacted.

263. I am not satisfied that, on the balance of probabilities, Mr Osman-Kerim has established a reasonable excuse on the part of the Company for its failure to comply with the 17 January Notice. The evidence does not disclose any particular or unreasonable difficulty in complying with that Notice. The fact that a plumber was contacted who did not arrive when he promised to do so does not, to my mind, constitute a reasonable excuse. If Mr Osman-Kerim was genuine in his endeavours to have what ultimately proved to be a task that could be completed within the space of a little more than two hours on an urgent basis, it is inconceivable that he would make contact with only one plumber and accept that plumber's statement that he would be there "as soon as I can". The fact that the prosecutor was able to negotiate with that same plumber to undertake the task and then to have the task undertaken all on the same day, rather suggests that the efforts of Mr Osman-Kerim to secure the services of that plumber were not consistent with establishing the necessary will to address the requirements of the Notice.

264. ... No reasonable explanation emerges from the evidence as to why a plumber could not be retained to carry out the work between 17 January and 30 January.

[564]

As it transpired, the plan put together by Mr Matthews, the general manager of CTP, for cleaning up the premises set out in the letter to the prosecutor dated 29 March 2018 which was prepared in consultation with Mr Vujkovic and the defendant was not achieved within the time required. However, the defendant did not make any application to extend the time for compliance, and there was no onus on the EPA to make such an application.
In relation to the defendant's financial circumstances, again, it might be accepted that the resources to carry out the steps required to be taken in order to comply with direction 7 required considerable financial resources, and that there was a dispute in relation to the cost of disposing of untreated waste water from the above ground tanks. However, the EPS contract entered into by the defendant on 30 August 2018 for the payment by the defendant to EPS of amounts for scheduled items and milestone payments totalling $302,158.61. Accordingly, there was considerable force to the prosecutor's submission that had the defendant paid EPS a sum in the order of $115,000 for completion of milestones 4 and 5, the clean-up notices may well have been fully complied with. I find that this amount should have been prioritised over other expenses.
It might also be accepted that after Truegain went into liquidation in September 2016, the defendant was unable to obtain income from the premises to fund the clean-up, and that the defendant spent considerable amounts in trying to clean-up the premises between 2016 and 2020. However, after Truegain went into liquidation in September 2016, there remained various waste and other materials on the premises, including waste hydrocarbons, and the premises were contaminated with PFAS.
I am not satisfied that the defendant has established on the balance of probabilities an inability to comply with direction 7 of the varied clean-up notice arising from his financial circumstances on 31 August 2018. There were, as summarised above at [183 ] and [285 ], significant other amounts spent by the defendant in the period 2016 to 2020 on matters not relating to remediating the premises, including exploring options to sell the property, legal fees, other clean-up actions not the subject of the clean-up notice, and the payment to the defendant and his wife of about $250,000 for living expenses. I find that the defendant did not prioritise the expenditure of available funds on the balance of the EPS contract to achieve compliance with direction 7 of the varied clean-up notice given on 18 May 2018, by no later than 5pm on 31 August 2018.
In particular, I find, as submitted by the prosecutor, that the defendant did not provide evidence in the form of financial statements, profit and loss statements, tax returns, accounting records or similar documentary evidence regarding his finances in the period from 18 May 2018 onwards (or at all) capable of permitting an assessment of his financial circumstances in the period of the direction 7 charge. The defendant no doubt found himself in deeply distressing financial circumstances in the period following the liquidation of Truegain in September 2016. His affidavit evidence was that he estimated his personal net worth in 2015 "would have been in excess of $45 million", and he estimated that "about $35 million would have been through my shareholding in the Truegain Business and about $10 million would have been the net equity of the properties that I owned personally or with my wife, and some saving". However, neither his affidavit nor his oral evidence provided the Court with assistance in relation to his financial affairs in the period of the direction 7 charge. The defendant did not assist the Court in relation to the circumstances surrounding the sale of the Hunter's Hill property by his spouse on 2 September 2019 for $4,375,0000 or the $245,000 he drew on in superannuation.
The defendant has not established, on the balance of probabilities, a reasonable excuse for failing to comply with direction 7 of the varied clean-up notice during the charge period.

Environment Protection Authority v Pullinger

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Cases Cited (62)