Environment Protection Authority v Rands

Land and Environment Court (NSW)|2019-03-05|Before: Pepper J

Solicitors: Environment Protection Authority (Prosecutor) Maclarens Lawyers (Defendant) File Number(s): 2017/293488

Mr Rands Pleaded Guilty to Operating a Waste Facility without Lawful Authority

Mr Geoffrey Rands has pleaded guilty to an offence against s 144(1) of the Protection of the Environment Operations Act 1997 ("POEOA"). His liability arises by the operation of s 169(1) of the POEOA, insofar as he was a director of Newcastle Waste Recycling Pty Ltd ("NWR"), and that company caused a place to be used as a waste facility without lawful authority. The summons states as follows: 1. An order that the Defendant, Geoffrey Barrett Rands of 13A Warner Avenue, Tuggerawong, in the state of New South Wales, appear before a Judge of the Court to answer to the charge that, on or before 24 October 2014, at or near Tomago in the State of New South Wales, he committed an offence against section 144(1) of the Protection of the Environment Operations Act 1997, by virtue of section 169(1) of that Act, in that: a) he was a director of Newcastle Waste Recycling Pty Ltd (ACN 166 304 874); and b) Newcastle Waste Recycling Pty Ltd (ACN 166 304 874), being the occupier of a place, caused the place to be used as a waste facility without lawful authority. Particulars (a) Place Lot 13 DP 236073, being 509 Tomago Road, Tomago ("the Premises") (b) Waste More than: 2,500 tonnes and/or 2,500 cubic metres of material comprising, amongst other things: mixed construction and demolition waste; brick and concrete; rubber; soil; rubbish; timber; woodchips and/or green waste, and/or 5 tonnes of asbestos waste. which was stored at the Premises in many stockpiles ("the Waste"). (c) Manner of breach Newcastle Waste Recycling Pty Ltd (ACN 166 304 874) caused the Premises to be used as a waste Facility for the storage of the Waste. (d) Date on which evidence of the alleged offence first came to the attention of an authorised officer: Evidence of the alleged offence first came to the attention of authorised officer Ms Melissa Moore on 29 September 2014.
Section 144(1) of POEOA provides as follows: 144 Use of place as waste facility without lawful authority (1) A person who is the owner or occupier of any place and who uses the place, or causes or permits the place to be used, as a waste facility without lawful authority 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. Note. An offence against subsection (1) committed by a corporation is an offence attracting special executive liability for a director or other person involved in the management of the corporation - see section 169.
Section 169(1) of that Act states: 169 Liability of directors etc for offences by corporation - offences attracting special executive liability (1) If a corporation contravenes, whether by act or omission, a provision of this Act attracting special executive liability, each person who is a director of the corporation or who is concerned in the management of the corporation is taken to have contravened the same provision…
Relevantly, according to Sch 1 of the POEOA the storage of more than 2,500 tonnes or 2,500m³, whichever is the lesser, of waste on premises at any time was a scheduled activity requiring an environment protection licence ("EPL").
The term "waste facility" is defined by the POEOA as: waste facility means any premises used for the storage, treatment, processing, sorting or disposal of waste (except as provided by the regulations).
And the term "waste" is defined to mean: waste includes: (a) any substance (whether solid, liquid or gaseous) that is discharged, emitted or deposited in the environment in such volume, constituency or manner as to cause an alteration in the environment, or (b) any discarded, rejected, unwanted, surplus or abandoned substance, or (c) any otherwise discarded, rejected, unwanted, surplus or abandoned substance intended for sale or for recycling, processing, recovery or purification by a separate operation from that which produced the substance, or (d) any processed, recycled, re-used or recovered substance produced wholly or partly from waste that is applied to land, or used as fuel, but only in the circumstances prescribed by the regulations, or (e) any substance prescribed by the regulations to be waste. A substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered.
Between 12 August 2014 and 24 October 2014, NWR contravened s 144(1) of the POEOA insofar as it: 1. was the occupier of the premises the subject of the change; 2. used those premises to receive waste; 3. stored more than 2,500m³ or 2,500 tonnes of waste at those premises; and 4. did not hold an EPL in relation to the storage of the waste at those premises.
This matter is related to the following proceeding, which arose from the same factual circumstances as this case Environment Protection Authority v Gilder [2018] NSWLEC 119. That case concerned the prosecution of Mr Edward Gilder by the Environment Protection Authority ("the EPA") for an offence under s 144(1) of the POEOA. The role that Mr Gilder had in the activities of NWR and the management of the premises the subject of these proceedings is explained below.
Most of the factual matters in dispute were resolved by the filing of a detailed statement of agreed facts that appended reports, surveys, records and maps and generally set out the factual matrix surrounding the commission of the offence.
The EPA also relied on a photograph annexed to an affidavit sworn on 24 June 2018 of Mr Gregory Rodwell, a Development Compliance Officer employed by Port Stephens Council. The photograph, provided by the Council to the EPA (but taken by a member of the public), showed a fire in a pile of waste material on the premises on 21 October 2014.

Mr Rands's Company Operates a Waste Facility in Tomago

Mr Rands was the director of NWR which operated a waste facility without an EPL at 509 Tomago Road, Tomago ("the premises"). NWR stored 20,000m³ of material at the premises comprising of mixed construction and demolition waste; brick and concrete; rubble; soil; rubbish; timber; woodchips and green waste; and five tonnes of asbestos ("the waste").
NWR was registered as a company on 21 October 2013. Mr Rands remained a director of NWR from its registration until 20 November 2014, when he ceased being a director. From that time onwards, Ms Melanie Gilder (who also became a director on registration of NWR) was the sole director. Mrs Gilder is married to Mr Gilder.
NWR is presently in liquidation.
Since 1999 Mr Rands has owned and operated various waste facilities, including Gow Street Recycling and North Wyong Recycling. Gow Street Recycling held an EPL permitting it to process 80,000 tonnes of waste per annum. An EPL was not required for North Wyong Recycling because of the amount of waste that it received and processed.
At all relevant times, Mr Rands was also a director of Tomago Road Pty Ltd, a company registered on 21 October 2013 ("Tomago Road"). From its registration until 20 November 2014, Mrs Gilder was also a director of Tomago Road.
The premises are located at Tomago near Newcastle and are depicted in the aerial image below.
To the north of the premises there is a front boundary along Tomago Road of approximately 100m. There is a chain fence along the front of the premises and a driveway which continues directly onto a weighbridge. A sediment dam is located on the site. The premises extend to the southern boundary marked by the bank of the Hunter River. On the western side of the weighbridge is a demountable office building and a carpark. Between the northern and southern side of the premises were, and remain, numerous stockpiles of waste.
The above aerial image includes the following features of the premises: 1. at the bottom of the photograph the Hunter River is visible; 2. Tomago Road is at the top of picture; 3. an entrance driveway with gates visible close to Tomago Road; 4. a weighbridge marked with the letter "W"; 5. an office building labelled "office"; and 6. various areas labelled 1 to 10, being: 1. area 1, an area used for skip bin storage; 2. area 2, containing a 10m x 10m x 1m area scrap metal area and an area leased by Mr Fady Chehade; 3. area 3, an area containing shipping containers; 4. area 4, an area used for skip bin storage; 5. area 5, an area 60m x 60m covered in crushed brick and gabion, also containing four separate stockpiles 6m x 20m x 20m containing raw and crushed concrete and soil; 6. area 6, a receiving bay for waste; 7. area 7, an area containing general skip bin waste; 8. area 8, an area containing a stockpile approximately 4m x 10m x 50m consisting of waste timber; and 9. area 10, an area containing unprocessed timber building waste approximately 100m x 50m x 4m in dimensions. 10. History of the Use of the Premises
At all relevant times NWR occupied the premises. The sole business of NWR was the receipt, processing, and storage of waste at the premises. NWR was incorporated as a vehicle for Mr Gilder and Mr Rands to conduct a waste recycling facility from the premises. The owner of the premises was Direct Developments Pty Ltd ("Direct Developments").
Direct Developments purchased the premises on 14 December 2006, subject to an existing lease to CMA Recycling Pty Ltd ("CMA"). CMA used the premises as a materials recycling facility pursuant to consent DA 1620043423 which permitted metal recycling ("the consent"). CMA occupied the premises until PPB Advisory ("PPB") (as administrator) took possession on 2 August 2013. PPB vacated the premises on 31 October 2013.
Prior to CMA's occupation, and Direct Development's purchase of the premises, JBS Environmental Consulting Pty Ltd ("JBS") was engaged by Direct Developments to do a baseline environmental assessment of the premises. After acquisition, Direct Developments continued to engage JBS for this purpose. The assessments indicated that the land had been contaminated with petroleum hydrocarbons, organochlorine pesticides, polychlorinated biphenyls and, on two isolated occasions, asbestos fibres.
Direct Developments also engaged JBS to prepare a remediation action plan. In December 2012 JBS carried out further assessments and identified materials scattered across the surface of the premises including machinery, several metal scrap stockpiles, and two soil and rubble stockpiles in the central to southern portion of the premises.
By October 2013 the premises had been cleared of most materials left by CMA at the premises. The material was cleared by Sell & Parker who were contracted to do so following the JBS report. The site was very untidy and there was scrap metal and junk down to a depth of 1.5m below ground level.
Direct Developments offered the premises for sale as vacant possession from 3 August 2015. Between 3 August 2013 and 31 October 2013 there were no tenants at the premises. At about this time, Direct Developments auctioned the plant and equipment at the premises. Mr Rands purchased the machinery.
On 1 October 2013 Mr Rands contacted Direct Development and offered to buy the premises, with Tomago as the purchaser.
Mr Adrian Cuttriss, a director of Direct Developments, understood that Mr Rands was going into business with Mr and Mrs Gilder. The business would accept skip bin waste and sort recyclables for profit.
Mr Rands gave Direct Developments assurances that NWR would be able to raise the funds to purchase the premises. Thus, on 18 October 2013 Mr Rands forwarded to Direct Developments a balance sheet of his business assets held in recycling facilities as an assurance that the funds could be raised. Mr Rands subsequently discussed the balance sheet with Direct Developments.
Because Mr Rands had acquired machinery earlier, Direct Developments decided to sell him the premises. The agreed purchase price was $3 million with a $400,000 deposit. Half of the deposit was paid by Mr Rands. The remaining half of the deposit was paid by Mr and Mrs Gilder.
Direct Developments and Tomago agreed to a delayed settlement period of one year. On 15 November 2013 a contract for purchase was entered into on this basis between Direct Developments and Tomago. At that time, Mr Rands and Mrs Gilder were directors of Tomago.
On 15 November 2013 Direct Developments entered into a lease with NWR. The effect of the lease was to give Mr Rands and Mr and Mrs Gilder access to the premises. However, if the purchase did not settle within 12 months, NWR was liable to pay $150,000 rent for six months and to deliver the remediated premises back to Direct Developments. Mr Rands signed the lease as one of two guarantors on behalf of NWR. Mrs Gilder signed as second guarantor.
On 17 January 2014 Mr Rodwell was investigating an alleged waste offence at another property. Mr Rodwell subsequently identified the premises as a potential source of waste.
Mr Rodwell attended the premises and had a conversation with Mr Gilder, the manager of the premises on behalf of NWR. Based on this conversation, and his observations at the premises, Mr Rodwell formed the view that NWR was using the premises to receive, store and process waste, and that waste from the premises had been applied to land at another site the subject of the Council's investigation. No action was taken against NWR at this time.
Later, on 22 January 2014 the Council advised NWR that it considered the processing of waste at the premises to be without consent.
On 14 March 2014 Le Mottee Group, on behalf of NWR, lodged an application to modify the consent ("the modification application") seeking permission for the recycling of general dry solid waste, including metal recycling, waste transfer, the recycling of concrete and bricks, and the recycling of timber, with a production limit of 30,000 tonnes of recycled products per annum.
On 3 June 2014 the modification application was granted (DA 1620043424), permitting receipt of a maximum of 30,000 tonnes of recycled product per annum, but specifically excluding putrescible waste, hazardous waste, liquid waste, restricted solid waste and special waste.
On 23 July 2014 a further modification of the consent was granted (DA 1620043425), permitting receipt of a maximum of 30,000 tonnes of recyclable dry solid waste onsite per annum and retaining the exclusions referred to above.
On 15 August 2014 a final modification to the consent was granted (DA 1620043426), providing development consent for a "Waste Resource Transfer Station" as defined under the Port Stephens Local Environmental Plan 2013 ("the Port Stephens LEP"). This permitted receipt of a maximum of 30,000 tonnes of recyclable dry solid waste per annum, again including the exclusions referred to above. The consent also prohibited the stockpiling of materials in the rear 42 metres of the premises.
The Port Stephens LEP defined the term "waste resource transfer station" as follows: waste or resource transfer station means a building or place used for the collection and transfer of waste material or resources, including the receipt, sorting, compacting, temporary storage and distribution of waste or resources and the loading or unloading of waste or resources onto or from road or rail transport.
Entities other than NWR who used the premises as a place of business were East Coast Recycling Pty Ltd ("East Coast"), which was a customer of NWR, and Mr Chehade.
At all relevant times, East Coast had a verbal agreement with NWR to occupy an area at the front of the premises to store empty skip bins. From time to time, East Coast temporarily stored skip bins filled with waste at the premises.
On 1 August 2014 Tomago entered into a sublease with Mr Chehade for $44,000 per year. The sublease permitted Mr Chehade to lease 2000m2 of the premises for handling 5,200 tonnes of scrap metal per annum for $40,000 per annum. Mr Chehade paid rent at the end of every month into an account held by Tomago Road Trust.

Use of the Premises as a Waste Facility by NWR

Initially, waste that was processed at the premises included waste that was already onsite. Waste originally onsite was still being processed at 24 October 2014, and was included in the measured stockpiles of waste. This waste comprised two interconnected piles surveyed to contain 1,277m3 of material described as rubble and soil. It was located in the north-eastern part of the premises.
From 5 December 2013 onwards, NWR used the premises to receive, store and sort waste from offsite.
The waste received by NWR originated from companies that provided customers with skip bins which were filled with waste generated by activities including demolition and construction. The companies were paid by the customers to remove and dispose of the waste in the skip bins. NWR told local skip bin businesses that NWR was a cheaper option than other local landfill sites.
Waste was received on the premises by vehicles hauling skips bins. They were received on the weighbridge, which weighed the gross weight of the vehicle hauling the skip bin and waste. The weighbridge printed off a docket which indicated the gross weight. The weighbridge operator took a handwritten note detailing the vehicle's registration and the waste type as verbally communicated by the driver. Waste was then tipped into the receiving bay and classified upon a visual inspection by a person working on the premises.
Vehicles were weighed on the weighbridge upon departure, which printed a docket indicating the weight. The operator calculated the net weight and multiplied that against a rate according to the waste type. There was a list depicting rates. Upon departure transporters paid either by VISA card, EFTPOS, or they held an account with NWR.
The weight dockets were supplied to the driver of the vehicle upon departure. NWR kept a copy of the dockets. Sales received by NWR were entered daily into an Excel spreadsheet, along with information such as waste tonnage and the customer name.
Derwin Waste Management Solutions Pty Ltd, trading as "Skip the Tip", was a skip bin company which transported waste to the premises during the offence period. NWR accepted waste from Skip the Tip, the latter of which provided skip bins to customers which Skip the Tip would then collect and take to a waste facility.
Skip the Tip did not provide training to its staff on waste classification. To classify waste, Skip the Tip relied on the representations made by the customer and confirmation by a visual inspection undertaken by the driver.
NWR generated 86 weighbridge docket books for the period of 30 June 2014 to 22 October 2014.
NWR intended to recycle timber, concrete, soil, plastics, metals and cardboard. NWR intended to keep brick and concrete onsite to crush and make a hardstand for the remainder of the site. Timber was stockpiled. According to Mr Rands, the timber was stockpiled and later processed to produce biomass fuel, with the intention to supply several pending waste to energy plants. None of these plants began to operate before the premises were closed by the EPA.
Some plastics and cardboard were sent to recyclers. Some metals went to scrap metal dealers. Some of the remainder was transferred to landfill in Queensland by road transporters.
By 12 August 2014 more than 2,500 tonnes of waste was brought to, and stored at, the premises. The amount of waste stored at the premises continued to increase until 24 October 2014.
By 24 October 2014 NWR was storing approximately 20,000m3 of waste at the premises, comprising timber, woodchips, brick and concrete, rubble and soil, white goods and metal. A summary of waste received at, and transported from, the premises was provided to the Court based on NWR's records. It demonstrated an increasing volume of waste stored at the premises from 1 July 2014 to 21 October 2014.
NWR hired labourers from Bulk Logistics Pty Ltd ("Bulk Logistics") which sourced labourers from the Salvation Army or Centrelink. The labourers operated machines and sorted the waste.
NWR did not require its staff to participate in any formal waste classification training, or require its staff to hold tickets in respect of dealing with hazardous material including asbestos. NWR did not offer a formal induction process for its staff.
On 24 October 2014 the following machinery was at the premises: 1. an in-use excavator sorting through skip bin waste consisting of timber, steel, plastic and gyprock sheets; 2. an excavator on top of a stockpile sorting through waste; 3. a water cart wetting the driving and weighbridge; 4. a weighbridge receiving waste; 5. a wheeled loader operating to push plastic, steel and timber waste into a larger stockpile; 6. machines sorting and shifting skip bin waste in the receiving bay from bin trucks and tippers; 7. a parked 20 tonne excavator; 8. two parked B-Double trucks; and 9. a 20 tonne excavator.
Over the period 5 December 2013 to 24 October 2014, NWR charged Skip the Tip approximately $539,000 in fees.
During the period 30 June 2014 to 22 October 2014, NWR invoiced $719,863 for the receipt of waste.

Mr Rands's Involvement in the Activities of NWR

Mr Rands was generally aware of the business being conducted by NWR. Mr Rands diverted material to NWR for processing.
Mr Gilder initially generated business for NWR by ringing local skip companies and notifying them of the facility.
Mr Gilder set the rates charged by NWR for the receipt of different categories of waste. He was provided by Mr Rands with indicative rates based on the figures used at North Wyong Recycling.
During NWR's operation at the premises, Mr Rands was rarely present on site. He visited the site approximately 10 times. These visits were usually to deliver or remove machinery. Occasionally, Mr Rands would visit the site if he was in the vicinity on other business. However, Mr Rands took no physical part in the day to day activities being undertaken on the premises.
Mr Rands negotiated the sublease of part of the premises with Mr Chehade directly on April 2014.
Between April 2014 and October 2014 Mr Chehade sought to increase the amount of scrap metal permitted under the lease. Mr Rands informed Mr Chehade that this was not allowed because the annual tonnage of scrap metal and waste combined on the premises could not exceed 30,000 tonnes under the consent.
Mr Chehade contacted Mr Rands by telephone about issues concerning the yard or payment.

Financial Position of NWR

NWR was saving money to assist with settlement costs on the planned purchase of the premises by Tomago Road. Funds saved by NWR for this purpose were deposited into Mr Rands's personal mortgage offset account. In the period 5 May 2014 to 24 October 2014, $392,600 was transferred to Mr Rands's offset account for this purpose. Mr Rands received a personal benefit of 50% of the difference between the commercial term deposit rate and the offset mortgage rate. The benefit for the duration of the arrangement is estimated to be approximately of $1000.
In the 2014 to 2015 financial year, NWR had made a loss of $5,919.22. The NWR funds from Mr Rands were disbursed from his account for the payment of NWR's rent and debt obligations to Pace Bulk Haulage. After payment, NWR owed Mr Rands $4,405. Mr Rands then paid Pace Bulk Haulage an additional $106,015 for a debt owed to it by NWR.
Mr Rands further estimates his other losses to be: 1. loss of rent (1 July 2015 to 1 July 2018) - $900,000; 2. loss on sale of assets - $3,650,000; 3. consultant and legal fees - not provided; 4. remediation to date (approximately) - $300,000; and 5. remediation to complete - $200,000.

The Involvement of Mr and Mrs Gilder

Mr Gilder was prevented from being a director of Bulk Logistics and NWR because he had previously been bankrupted. Mr Gilder was the site manager of NWR. He was away from the premises a couple of hours per week during operating hours.
Mr Gilder demonstrated the operation of the premises to new labourers. Mr Gilder informally inducted staff by showing them pictures of asbestos with reference to a WCRA operations manual. Mr Gilder showed Mrs Gilder how to operate the weighbridge.
Mr Gilder and the labourers would separate waste received on the premises. It was Mr Gilder's responsibility to classify tipped waste upon a visual inspection. When Mr Gilder was unavailable, it was one of the labourers, or Mrs Gilder, who classified the waste upon a visual inspection. Labourers reported to Mr Gilder on the premises.
Sales received by NWR were entered daily into an Excel spreadsheet usually by Mr Gilder. During the period of 21 October 2013 to 20 November 2014, Mrs Gilder was a director of Tomago Road. Mrs Gilder was not an active director of either NWR or Tomago Road.
Mrs Gilder did not play an active role in managing NWR, the premises, or the business conducted by NWR. Rather, Mrs Gilder assisted her husband in running the business onsite. Although labourers would report either to Mr or Mrs Gilder, Mrs Gilder's role was more akin to an employee on the site. Mrs Gilder worked approximately 9:30am to 3:30pm. Her daily tasks involved operating the weighbridge by weighing the truck, noting its details, printing the weighbridge docket, and charging the transporter by account or credit card based on a list of rates.

Waste Stored at the Premises as at October 2014

The EPA initially discovered that waste was being deposited on the premises, suspected to be in excess of 2,500 tonnes, on 29 September 2014.
There was 20,000m3 of waste stored on the premises as at 24 October 2014, comprising the following: 1. a 44 gallon drum containing burnt timber waste (area 1); 2. at least 15 skip bins either empty or containing waste, which had "1800 All Skips" and "Skip the Tip" written on them (areas 1 and 2); 3. a few skip bins full of scrap steel, including a bin of approximately 50m³ capacity. A stockpile about 10m x 10m and one metre tall (area 2); 4. a stockpile approximately two metres wide and two metres long (area 1); 5. three 40 foot shipping containers and a few skip bins full of scrap steel, including a skip bin of approximately 50m³ capacity (area 3); 6. an area of approximately 60m x 60m covered in crushed brick and concrete gabion (area 5); 7. four separate stockpiles about 20m x 20m in size (area 5); 8. two stockpiles approximately 60m wide and 15m long and 4m high (area 5); 9. a stockpile approximately 40m long, 10m wide and 7m high (area 5); 10. a stockpile of general skip bin waste (area 7); 11. a stockpile approximately four metres tall covering an area of about 10m by 50m (area 8); 12. a stockpile approximately 100m by 30-50m wide and four metres tall (area 10); 13. a skip bin labelled "1800 All Skips" on the northern boundary of the premises containing black plastic wrapped bundles suspected of containing asbestos (area 1); 14. about 24 mostly empty skip bins, one containing mixed building waste with some fibro pieces on the northern boundary of the premises (area 1); 15. a skip bin labelled "Skip the Tip" containing black plastic bundles, some of which had been ripped open and containing fibrous material (area 4); and 16. about six skip bins on the eastern boundary, one of these containing fibro pieces partially wrapped with black plastic (area 4).
Mr Rands had some knowledge, but not a detailed knowledge, of what was on the premises at 24 October 2014.
The EPA officers took photographs during this inspection which depicted the stored waste.
The type of waste on the premises included scrap metal; foam insulation and broken plywood sheets; mixed building and demolition waste; crushed brick and concrete gabion; soil; chipped/shredded green waste; construction timber, including treated pine; and general household material like broken furniture.
On 29 October 2014 a survey was taken showing the types and locations of waste on the premises.

The Clean-up of the Premises

EPA officers inspected the premises on 24 October 2014; 27 October 2014; 30 October 2014; 20 November 2014; 18 March 2015; 13 April 2016; 26 April 2016; 27 April 2016; and 7 June 2016. During this time, the EPA issued Clean-Up Notice No 1525875; Variation of Clean-Up Notice No 1525966; Clean-Up Notice No 1527079; and Notice of Clean-up Action 1541393, to NWR Staff Services Pty Ltd ("NWR Staff Services").
Compliance with the clean-up notices was limited to carrying out a volumetric survey of the stockpiles and the classification of the waste.
As at 27 October 2014, 29 October 2014, and 6 November 2014, the volume of stockpiled waste on the premises was 20,000m3.
On 26 and 27 April 2016 there was 13,367m3 of waste remaining stockpiled on the premises. It has not been established where the waste was disposed.
During the period between 24 October 2014 to 29 October 2014, ALS Environmental, on behalf of the EPA, confirmed that two out of five samples taken at the premises contained asbestos. JM Environments confirmed that eight of nine stockpiles on the site contained asbestos. JM Environments further confirmed four of nine samples taken from a single stockpile consisting of unsorted skip bin waste contained asbestos.
The EPA conducted the following recorded interviews: 1. on 1 September 2015 with Mr Christopher Derwin; 2. on 7 September 2015 with Mr Cuttriss; 3. on 10 September 2015 with Mr Gilder; 4. on 14 September 2015 with Mr Rands; 5. on 14 September 2015 with Mrs Gilder; and 6. on 16 September 2015 with Mr Chehade.
NWR Staff Services was registered on 19 February 2013. At the time, the sole director was Mr Rands. Mr Rands is still a director of NWR Staff Services.
On 7 June 2016 the EPA issued a verbal clean-up direction to Mr Rands. The direction was made on the basis that Mrs Gallagher saw dust on her phone and suspected air pollution. However, air monitoring carried out on the afternoon of 7 June 2016 found no evidence of air pollution or asbestos fibres.
On 8 June 2016 Notice of Clean-up Action 1541393 was issued to NWR Staff Services. It was, however, revoked on 13 October 2016.
On 13 October 2016 the EPA issued NWR Staff Services Prevention Notice No 1545136 on the basis that NWR Staff Services were undertaking clean-up activities at the premises in an environmentally unsatisfactory manner.
On 3 November 2016 NWR Staff Services filed a Class 1 application in the Court appealing Prevention Notice No 1545136. The proceedings were discontinued on 21 March 2017 because, by that time, NWR no longer had control of the site.
On 20 March 2017 the EPA inspected the premises and was met by a Mr Lawrence Spiteri and Mr Roman Brady of Recycling and Waste Management Pty Ltd ("Recycling and Waste Management"). The EPA was informed that Tomago Road had commenced a lease arrangement with Recycling and Waste Management which included cleaning up the premises.
On 24 March 2017 the EPA issued Recycling and Waste Management with Notice of Clean-up Action 1550447. Recycling and Waste Management is no longer the occupier of the premises.

The Purposes of Sentencing

The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 ("CSPA"): 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows: (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community.

Statutory Matters Required to be Taken into Account in Sentencing

The POEOA sets out the matters which are to be taken into account when sentencing for offences committed under that Act. Section 241 of the POEOA provides that: 241 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (e) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. (2) The court may take into consideration other matters that it considers relevant.
Subsections 21A(2) and (3) of the CSPA also set out aggravating and mitigating factors that the Court must take into account. Relevant to the facts of this case, these are as follows: 21A Aggravating, mitigating and other factors in sentencing (2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows: … (d) the offender has a record of previous convictions (particularly if the offender is being sentenced for a serious personal violence offence and has a record of previous convictions for serious personal violence offences), … (o) the offence was committed for financial gain… The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence. (3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows: (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, (b) the offence was not part of a planned or organised criminal activity, … (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise, (i) the remorse shown by the offender for the offence, but only if: (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), … (k) a plea of guilty by the offender (as provided by section 22 or Division 1A), … (m) assistance by the offender to law enforcement authorities (as provided by section 23)…
The appropriate sentence for Mr Rands is to be determined by an instinctive synthesis of all of the relevant objective and subjective circumstances (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).
Importantly, the sentence to be imposed on Mr Rands for the offence must be proportionate to both the objective seriousness or gravity of the offence and Mr Rands's subjective circumstances.

Objective Circumstances of the Offence

In determining the objective seriousness or gravity of the offence the relevant objective circumstances include the nature of the offence; the maximum penalty under the Act establishing the offence; the reasons for committing the offence; the environmental harm caused by the commission of the offence; the foreseeability of the risk of environmental harm caused by the commission of the offence; the practical measures to prevent environmental harm; Mr Rands's control over the causes giving rise to the offence; and Mr Rands's state of mind in committing the offence.

Nature of the Offence

The nature and purpose of the statutory provision that has been contravened, and its place in the statutory scheme, is illustrative of the objective seriousness of an environmental offence (Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234 at 242-246; Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [49] and 259 and Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [59]).
The relevant objects of the POEOA identify the purpose of creating the offence as follows: 3 Objects of Act The objects of this Act are as follows: (a) to protect, restore and enhance the quality of the environment in New South Wales, having regard to the need to maintain ecologically sustainable development, … (d) to reduce risks to human health and prevent the degradation of the environment by the use of mechanisms that promote the following: (i) pollution prevention and cleaner production, (ii) the reduction to harmless levels of the discharge of substances likely to cause harm to the environment, (iia) the elimination of harmful wastes, (iii) the reduction in the use of materials and the re-use, recovery or recycling of materials, (iv) the making of progressive environmental improvements, including the reduction of pollution at source, (v) the monitoring and reporting of environmental quality on a regular basis, (e) to rationalise, simplify and strengthen the regulatory framework for environment protection…
The EPA submitted that s 144(1) of the POEOA and cl 42 of the Protection of the Environment Operations (Waste) Regulation 2005 ("Waste Regulation") (repealed on 1 November 2014, but in force during the charge period) establish a highly regulated scheme with respect to the transportation, storage and disposal of waste.
Clause 42 of the Waste Regulation made detailed provision for the transport, disposal and re-use or recycling of any type of asbestos waste. The Waste Regulation demonstrates the seriousness with which the potential for harm to the environment, including humans, posed by asbestos waste is regarded.
The scheme requires applications for waste facilities to be submitted for consideration and approval, and proper assessment of potential impacts. The scheme turns on licensing only certain premises as appropriate waste facilities authorised to receive specified types of waste (including asbestos waste) above certain thresholds and subject to specific controls. It also prohibits the transportation of waste to unlicensed premises. In this way, the scheme regulates, monitors and mitigates harm to the environment and to human health.
Mr Rands's conduct, as the director of NWR during its use of the premises as a waste facility without lawful authority, undermined the legislative objectives of the POEOA, in particular s 3(a), (d)(i), (d)(ii), and (d)(iia). Mr Rands's conduct also compromised the beneficial protection to the environment and human health that the regulatory scheme provides.
In Gilder Robson J considered the nature of the offence in relation to the storage of waste without an EPL. His Honour opined as follows (at [103]-[105]): [103] In Environment Protection Authority v Hanna [2010] NSWLEC 98, Craig J said, in relation to the nature of the offence in that case which was the unlawful transporting or depositing of waste, at [38]: The objective seriousness of the offence is illuminated by the nature of the statutory scheme. Relevant to the offences charged, the legislature has prescribed a highly regulated scheme for the disposal of waste. This is undoubtedly due to the harm to the environment, including risk to human health, which is, or may potentially be caused by the improper disposal of waste. By reference to the definitions of both "pollution" and "harm" found in the POEOA, disposal of waste other than at a licensed facility is taken, for the purposes of the POEOA, to have caused environmental harm. [104] The EPA submits that this comment is equally apposite to the storage of waste without a licence, particularly in the circumstances of this case. Therefore, the EPA submits that, having regard to the fact that cl 42 of the Waste Regulation makes detailed provision for the dealing of asbestos, the offence undermines the legislative objectives of the POEOA, in particular ss 3(a), (d)(i), (d)(ii), and (d)(iia), as well as the objectives of s 144(1) of the POEOA. [105] I find that, as submitted by the EPA, and as I consider in relation to environmental harm and the regulatory scheme at [125] below, the offence does undermine the legislative objectives and integrity of the POEOA.
Similarly, I find, for the reasons given above, that Mr Rands's conduct undermined the legislative objectives and integrity of the POEOA.

Maximum Penalty

The maximum penalty provided for an offence indicates the seriousness with which Parliament view the commission of the offence (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 and Rawson at [57]).
Mr Rands's offending should be considered having regard to the maximum penalty for an offence against s 144(1) of the POEOA. The maximum penalty for an individual is $250,000.

Mr Rands's State of Mind in the Commission of the Offence

Although s 144(1) of the POEOA is a strict liability offence, the state of mind of Mr Rands in the commission of the offence is nevertheless relevant to the question of penalty. A strict liability offence committed intentionally, recklessly or negligently, "exacerbates the objective culpability of the defendant" (Mouawad v the Hills Shire Council; Mouawad v the Hills Shire Council [2013] NSWLEC 165; (2013) 199 LGERA 28 at [171]; Camilleri's Stock Feeds at 700; Gittany Constructions Pty Limited v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [123]; and Environment Protection Authority v Geoff Robinson Pty Ltd [2011] NSWLEC 14 at [83]).
It was not suggested that Mr Rands intended to commit the offence. Rather, the EPA submitted that Mr Rands committed the offence either recklessly or negligently.
This is because Mr Rands had been in the waste industry since 1999 and was a director of NWR. He arranged the purchase and lease of the premises from Direct Developments and was a guarantor on the lease which he and Mrs Gilder signed for NWR. He therefore can be taken to be aware of the terms and details of the lease. Clause 18.2 of the lease referred to the JBS&G Direct Developments Pty Ltd Remedial Action Plan for the premises dated 18 September 2013 ("RAP"). Clause 18.2 included an acknowledgement that NWR had reviewed the RAP and had inspected the premises in relation to the matters disclosed in the RAP. Section 5.2 of the RAP indicated the presence of asbestos at the premises.
Mr Rands had other dealings at the premises including arranging and monitoring a sub-lease for metal recycling. He purchased machinery from Direct Developments for use at the premises. Mr Rands also provided indicative rates derived from his business at North Wyong Recycling to inform the rates at which NWR would charge for receipt of waste. But for his involvement, NWR could not have operated its business from the premises.
Mr Rands was generally aware of the business being conducted by NWR, namely, the receipt, storage, processing and transfer of waste received from skip bin companies. While he took no physical part in the day to day operations at the premises, and although it was Mr Gilder acting as the site manager who had extensive involvement in the day to day operations, Mr Rands nevertheless personally attended the premises approximately 10 times, usually to deliver or remove machinery or if he was in the area on other business. Mr Rands also diverted business to NWR for processing. In addition, Mr Rands received an amount of $392,600 deposited into his personal offset account in the period 5 May 2014 to 24 October 2014, being funds saved by NWR as part of its business at the premises.
Furthermore: 1. there was a personal advantage available to Mr Rands from NWR operating outside the regulatory framework. Failure to complete the purchase in the time specified within the lease would result in significant financial costs falling on NWR, and in turn Mr Rands. NWR was a significant source of revenue for Tomago Road's intended purchase of the premises and as such, it was important that NWR be able to continue to receive waste, noting that the receipt of waste was its primary, if not sole, source of revenue and profit; 2. Mr Rands had knowledge that there was, at minimum, a large amount of waste material being stored at the premises and that the amount was increasing over time. A considerable amount of waste was already kept at the premises prior to more waste being received and stored there. Waste piles would have been readily visible during Mr Rands's onsite visits, which increased over time. Profits from the receipt of waste were being deposited into his personal offset account. NWR kept records demonstrating how much waste was received at the premises that, as director, Mr Rands had access to. NWR was also actively stockpiling timber. The timber stockpile was 9000m³ by 24 October 2014; and 3. Mr Rands was aware of the volumetric restrictions imposed by the consent and ought to have been aware of the relevant licensing limits imposed under the POEOA given his prior experience in the waste industry.
In Plath v Vaccount Pty t/as Tableland Timbers [2011] NSWLEC 202 the Court considered the meaning of the term "reckless" (at [98]): 98. The term recklessness describes the state of mind of an offender who, while performing or failing to perform an act, is aware of the risk that a particular consequence is likely, in the sense of probable or possible, to result from that act or omission (Pemble v R (1971) 124 CLR 107, La Fontaine v R (1976) 136 CLR 62 and R v Crabbe (1985) 156 CLR 464). Recently in Blackwell v R [2011] NSWCCA 93, the Court of Criminal Appeal described the mental element of "reckless" as (at [76]): 76. The effect of this line of authority is that where the mental element of an offence is recklessness, the Crown must establish foresight of the possibility of the relevant consequence.
The appropriate test of criminal negligence is that of "indifference to an obvious risk" (Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [114]; Environment Protection Authority v Elf Farm Supplies Pty Ltd [2017] NSWLEC 60 at [79] and [83]; Gordon Plath of the Department of Environment and Climate Change v Fish [2010] NSWLEC 144; (2010) 179 LGERA 386 at [81]; Chief Executive, Office of Environment and Heritage v Leda Management Services Pty Ltd [2013] NSWLEC 111 at [37]; Secretary, Department of Planning and Environment v Charbon Coal Pty Ltd [2016] NSWLEC 106 at [34] per Pain J; and Chief Environmental Regulator of the Environment Protection Authority v The Forestry Corporation of New South Wales [2017] NSWLEC 132 at [54] - [55]).
The EPA submitted that in light of the above facts, Mr Rands was negligent insofar as there was an obvious and persistent risk that he was indifferent to that if the amount of waste received at the premises outpaced the amount of waste leaving the premises, the relevant licensing threshold would quickly be exceeded. Alternatively, the EPA submitted that Mr Rands has foresight of the relevant consequence that the permitted volume of waste on the premises had been exceeded.
By contrast, Mr Rands contended that inferences sought to be drawn by the EPA in respect of recklessness were highly speculative and were based on assumptions which were not borne out by the evidence. The EPA had similarly not established a case beyond reasonable doubt that the offence was committed negligently. Mr Rands was not indifferent to an obvious risk because there was no risk that should have been obvious to him, given that he was not active in the everyday activities at the premises.
Mr Rands finally noted that under s 169(1)(c) of the POEOA, a failure to exercise due diligence was an element of the offence with which he was charged. In these circumstances, if he had merely failed to exercise due diligence in preventing the commission of the offence under s 144(1), the Court was unable to take this into account as an aggravating feature of the commission of the offence.
I agree with Mr Rands that the evidence relied upon by the EPA is not sufficient to establish beyond reasonable doubt that he had foresight of the possibility of breach of s 144(1), and therefore recklessness, by reason of an accumulation of waste on the premises. This finding is based on the fact that Mr Rands was on the premises infrequently and when he was there he did not participate in the day-to-day operations of the waste facility. Mr Rands relied on Mr Gilder as the manager of the premises to ensure compliance with all environmental laws.
However, I do find that the EPA has proved to the requisite standard that Mr Rands committed the offence negligently. Mr Rands correctly stated that his state of mind in this regard had to amount to something other than a failure to exercise due diligence. In my opinion, by his conduct, Mr Rands was plainly indifferent to the obvious risk of an excess of waste accumulating at the premises having regard to his considerable experience in the waste industry and his obligations as the director of NWR.
At the very least he knew that a pile of 1,277m³ of waste persisted at the premises. In addition to this waste, he visited the site, albeit infrequently. From these visits it may be inferred that he saw the additional large piles of waste that were being stored on the premises. Mr Rands was also aware that the premises had consent to process up to 30,000 tonnes of waste per year and that there were concerns about whether that limit may be exceeded thereby causing Mr Rands to deny Mr Chehade any increase in the amount of waste that he was permitted to deal with under his sublease. Mr Rands's knowledge about the scale of the operation on the premises can also be inferred from NWR's records, indicating that between 1 July to 21 October 2014 the volume of waste at the premises was increasing, and the receipt of money by NWR pursuant to the operation of the waste facility, which was later transferred to his personal offset account during the period 5 May 2014 to 24 October 2014.
While Mr Gilder was responsible for the day-to-day operation of the premises, this could not and did not, contrary to Mr Rand's submission, negate his indifference to the obvious risk of the permissible threshold for the storage of waste on the premises being exceeded.
These matters, together with the factual matters relied upon by the EPA, demonstrate to the requisite standard that Mr Rands breached s 144(1) negligently. That this finding is based in part on inference does not matter. This finding increases the objective seriousness of the offence.

The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offence

Section 241(1)(a) of the POEOA requires the Court to take into account the extent of the harm caused, or likely to be caused, to the environment by the commission of the offence. "Harm" is defined in the dictionary to the POEOA as: harm to the environment includes any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution.
In Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299, Preston J stated that harm includes both actual harm and potential harm (at [145]-[149]): 145. Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 and Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [175]. Harm should not be limited to measurable harm such as actual harm to human health. It can also include a broader notion of the quality of life. 146. Harm can include harm to the environment and its ecology. Harm to an animal or plant not only adversely affects that animal or plant, it also affects other biota that have ecological relationships to that animal or plant: Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [174]. 147. Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernable direct harm to human interest, should also be treated seriously. 148. The culpability of the defendant depends in part on the seriousness of the environmental harm. Sentencing courts have exercised their discretion in relation to penalty on the principle that the more serious the lasting environmental harm involved, the more serious the offence and, ordinarily, the higher the penalty: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 701. If the harm is substantial, this objective circumstance is an aggravating factor: s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999. 149. The fact that the environment harmed by the offender's conduct was already disturbed or modified is not a mitigating factor: State Pollution Control Commission v White Wings Ltd. (unreported, Land & Environment Court, No 50129 of 1991, Bignold J, 1 November 1991) at p 4; Environment Protection Authority v Ecolab Pty Ltd (2002) 123 LGERA 269 at 273 [14]; Environment Protection Authority v Coggins (2003) 126 LGERA 219 at 224 [18]; Environment Protection Authority v Abigroup Contractors Pty Ltd [2003] NSWLEC 342 (15 December 2003) at [24]; Environment Protection Authority v Arenco Pty Ltd [2006] NSWLEC 244 (9 May 2006) at [26].
The meaning of the words "likely to be caused to the environment" was considered by Lloyd J in Newcastle City Council v Pace Farm Egg Products Pty Ltd [2002] NSWLEC 66 (at [44]): 44. In considering the harm likely to be caused to the environment, it is to be noted that the word "likely" in this context has been held to mean "a real or not remote chance or possibility regardless of whether it is less or more than a fifty per cent chance" (Mathews v Goulburn Wool Processors, NSWSC, Smart J, 6 November 1986, unreported); "only a real chance or possibility, and not more probably than not" (State Pollution Control Commission v Blayney Abattoirs Pty Ltd (1991) 72 LGERA 221 at 224); and "does not mean 'probable'. It means 'a real possibility'" (New South Wales Sugar Milling Co-operative Ltd v State Pollution Control Commission (1991) 73 LGRA 86 at 100, affirmed by the Court of Criminal Appeal on other grounds, (1992) 75 LGRA 320).
In Environment Protection Authority v Hanna [2010] NSWLEC 98 Craig J stated that (at [38]): 38. The objective seriousness of the offence is illuminated by the nature of the statutory scheme. Relevant to the offences charged, the legislature has prescribed a highly regulated scheme for the disposal of waste. This is undoubtedly due to the harm to the environment, including risk to human health, which is, or may potentially be caused by the improper disposal of waste. By reference to the definitions of both "pollution" and "harm" found in the POEO Act, disposal of waste other than at a licensed facility is taken, for the purposes of the POEO Act, to have caused environmental harm.
The EPA submitted that the offence resulted in actual environmental harm because of: 1. contamination of the premises resulting from the storing of waste and asbestos waste at the premises; 2. the emission of impurities into the air resulting from a stockpile of timber catching fire; and 3. the impact of the visual amenity of the premises.
The EPA further submitted that there was likely potential harm arising from: 1. the findings of JM Environments in October 2014 confirming that eight of nine stockpiles on the premises contained asbestos; 2. the potential for the stored waste to catch fire and cause significant harm as evident from the photograph showing precisely this occurrence; 3. the mechanical processing, sorting and moving of waste containing asbestos waste; and 4. the pre-existing contamination of the premises from the activities of CMA Recycling, prior to NWR's occupation of the premises.
Mr Rands conceded that there could have been some increase in contamination by the storage of waste and asbestos waste and the emission of impurities into the air resulting from a stockpile of timber catching fire. However, Mr Rands disputed that the commission of the offence occasioned actual harm to the environment because: 1. there was no evidence adduced of actual harm to the environment or human health; 2. the likely harm to the environment was only marginally greater than the risks of contamination the pollution occasioned by activities which would ordinarily occur on the premises; and 3. there was insufficient evidence to demonstrate that the commission of the offence affected the visual amenity of the site.
I accept, for the reasons put by the EPA, that the offence caused actual harm to environment, however, I do not consider that any impact on the visual amenity of the premises was significant, nor do I accept the harm alleged in 131 and (d) above. I also accept, as an aspect of actual harm, that the commission of the offence undermined the regulatory scheme imposed by the POEOA and has the potential to cause environmental harm (Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29 at [23]).
There can also be no doubt whatsoever that a real potential for harm existed as a result of the commission of the offence. For example, the potential harm associated with asbestos is well known and the consequences of exposure to asbestos can be serious (Environment Protection Authority v Hanna [2018] NSWLEC 80 at [114]). The asbestos had the potential to negatively impact upon the health of NWR staff onsite as well as other persons in close proximity. The storage of waste also had the potential to catch fire and cause significant harm, as evidenced by the photograph.
The fact that the premises had been contaminated earlier by the activities of CMA Recycling, an entity that was not associated with NWR or Mr Rands, does not matter and cannot excuse or mitigate the harm caused by the offence (Environment Protection Authority v Ecolab Pty Ltd [2002] NSWLEC 206; (2002) 123 LGERA 269 at 273 [14]).
The finding of actual and potential environmental harm increases the objective seriousness of the offence.

Mr Rands's Reasons for Committing the Offence

The criminality involved in the commission of the offence by a defendant is measured not only by the seriousness of what actually occurred but also by reference to the reasons for its occurrence (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 and Bentley at [237]).
The business of NWR was to accept skip bin waste, sort the recyclables and subsequently make a profit from this activity. Mr Rands received a personal, albeit nominal, benefit from profits generated by NWR of about $1000. Mr Rands, as the primary director of both NWR and Tomago Road stood to gain from NWR's actions, noting that NWR was intended to generate the profits to be used to purchase a $3 million property.
Moreover, by its commission of the offence, NWR avoided incurring the costs of obtaining and complying with an EPL.
As such, the EPA submitted that the offence was committed for commercial gain. I accept this submission.
The fact that Mr Rands bore risk and incurred losses in relation to the operation of NWR does not nullify the finding that the offence was committed for financial gain. For example, it was in Mr Rands's interests that NWR generate as much profit as possible, noting that there were significant penalties for NWR under the lease (for which Mr Rands was a personal guarantor) arising if Tomago Road was unable to complete the purchase of the premises.
Similarly, the fact that the EPA detected the offence, halted the business of NWR and required clean-up of the premises resulting in NWR and Mr Rands incurring losses, does not act as a mitigating factor.

Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offence

Section 241(c) of the POEOA requires the Court to have regard to the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment.
The EPA submitted that the environmental harm resulting from unlawfully storing waste at the premises was plainly foreseeable. Given his history of involvement in the waste industry and the premises, Mr Rands should have foreseen the environmental impacts associated with excess waste storage.
Mr Rands argued that because he had no reason to suspect that the waste storage threshold had been exceeded, any environmental harm could not be foreseen.
I disagree. Given his history in relation to the waste industry and his involvement in earlier projects at the premises, Mr Rands should have been aware that a failure to ensure that the applicable waste storage limit was not breached had the potential to cause environmental harm.

Control Over the Causes of the Commission of the Offence

Insofar as Mr Rands was a director of NWR and authorised Mr and Mrs Gilder to manage the daily operations at the premises, there can be no doubt that Mr Rands had control over the causes of the commission of the offence.
The offence was caused by NWR storing more than 2500m³ or 2500 tonnes of waste at the premises without lawful authority. Mr Rands was a director with extensive experience in the waste industry and therefore had the capacity to control waste processing procedures at the premises, even if he did not have the day-to-day control of the premises.

Practical Measures Which Could Have Been Taken to Prevent or Mitigate the Environmental Harm

In determining the objective seriousness of the offence, it is appropriate to have regard to the precautions that were taken by an offender, as well as the practical measures that could have been taken by an offender to avoid incidents that resulted in environmental harm.
The EPA submitted that the following practical measures could have been taken to prevent, control, abate or mitigate the harm that was caused by the commission of the offence: 1. maintaining the volume of waste stored at the premises below the necessary threshold; or 2. obtaining an EPL; and 3. with respect to the storage of asbestos contaminated waste, providing appropriate training in waste classification for employees involved in the receipt of waste.
It was initially argued by Mr Rands that he had insufficient control of the daily operations at the premises to implement practical measures to avoid any resultant environmental harm. Later, however, he conceded that he could have carried out his own investigation of the volume of waste kept on the premises.
Notwithstanding Mr and Mrs Gilder's more intimate involvement in the operations at the premises, Mr Rands had sufficient industry experience and control of the onsite operations to prevent or mitigate the harm by ensuring that the volume of waste stored at the premises was below the licensing threshold, or by obtaining an EPL, and by ensuring that employees involved in the receipt of waste were trained in waste classification.

Conclusion on the Objective Seriousness of the Offence

Having regard to the factors above, I accept the EPA's submission that the offence was at the upper end of the lower range of seriousness for offences against s 144(1) of the POEOA.

Subjective Circumstances of Mr Rands

The subject factors of Mr Rands operating to mitigate the sentence of the Court are as follows: 1. that, as agreed, Mr Rands entered a plea of guilty at the earliest available opportunity. He is therefore, in any view, entitled to the full 25% discount (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383); 2. that Mr Rands cooperated with, and provided assistance to, the EPA in its investigation of the offence (ss 21A(3)(m) and 23 of the CSPA). Relevantly, Mr Rands attended interviews and meetings with the EPA, agreed to the preparation of a comprehensive statement of agreed facts and directed NWR Staff Services to engage in remediation on the premises otherwise than in compliance with Clean-Up Notice 1527079; and 3. that Mr Rands has no record of previous convictions for environmental offences (s 21A(3)(e) of the CSPA).
However, Mr Rands has not directly demonstrated any contrition or remorse for committing the offence (s 21A(3)(i) of the CSPA). Mr Rands had the opportunity of doing so when he was granted leave to give oral evidence but did not do so.
The only regret expressed was that contained indirectly in a character reference from Mr Saki Nioplias dated 1 March 2019. Very limited weight is therefore placed on it.

The Good Character of Mr Rands

Mr Rands relied on two character references, one from Mr Nioplias and one from Dr David Rands dated 28 February 2019. Dr Rands is Mr Rands's father, and therefore, this circumscribes the weight that can be placed on that reference.
Nevertheless, I find that but for the commission of this offence, Mr Rands is a person of good character.

This Offence Could Have Been Brought in the Local Court

In Harris v Harrison [2014] NSWCCA 84; (2014) 86 NSWLR 422 the Court of Criminal Appeal stated that this Court must take into account whether the offence could have been prosecuted in the Local Court where the maximum applicable monetary penalty is lower (at [92]). I have considered this factor.
I note, however, that while the EPA indicated that this offence could have been dealt with the Local Court, it nevertheless commenced proceedings in this Court (as it was entitled to do so by reason of its prosecutorial discretion) because of the volume of waste involved and the necessity to set a precedent for the commission of this type of offence.

General and Specific Deterrence

The Court is required to take into account both specific and general deterrence.
The sentence imposed by the Court must serve as a general deterrent. Section 3A(b) of the CSPA provides that one of the purposes for which a Court may impose a sentence is "to prevent crime by deterring the offender and other persons from committing similar offence." General deterrence is vital "to ensure that the penalty imposed acts to deter those who might engage in similar activities from committing like offences" (Mouawad at [118]).
General deterrence is an important consideration in sentencing under the environment protection legislation. In Axer Mahoney JA stated (at 359): The legislation does not seek merely to prevent deliberate or negligent pollution. It envisages that, at least in many cases, proper precautions must be taken to ensure pollution does not occur.
It was stated by Pain J in Environment Protection Authority v Smart Skip (NSW) Pty Ltd [2009] NSWLEC 204 in relation to an offence committed under s 144(1) of the POEOA that (at [35]): 35 Given the importance of enforcing the regulatory regime for the management of waste by those operating waste facilities for profit, general deterrence is an important consideration. A nominal fine will not be sufficient. I consider that the imposition of an appropriate sentence must contain an element of general deterrence in all the circumstances.
In relation to specific deterrence, I accept the submission of Mr Rands that his previous involvement in the waste industry over many years with no breach of the relevant regulatory scheme demonstrates that he is aware of and, other than the commission of this offence, takes seriously his obligations under the relevant environmental legislation.
With leave, Mr Rands gave oral evidence to the effect that he no longer worked in the waste industry and that did not intend to do so in the future. I accept his evidence. There is therefore no need for specific deterrence because this is an uncharacteristic event which is unlikely to be repeated in the future.

Retribution and Denunciation

Finally, it should be noted that the purposes of retribution and denunciation are also relevant. In particular, the Court must impose a sentence that achieves the purposes of denouncing the conduct the subject of the offence and making Mr Rands accountable for his actions.

Consistency in Sentencing

The Court must have regard to comparable cases from which guidance can be obtained to ensure that the penalty imposed is consistent with a pattern of sentencing for like offences. These cases include Smart Skip and Gilder.
Of course care must be taken when comparing cases as there may be many divergent facts and circumstances (Axer at [365]). The comparable cases do, however, confirm that the imposition of a fine is an appropriate form of penalty for this offence.
In Gilder Robson J observed the following, which I respectfully endorse (at [182]-[183]): 182. In Geoff Robinson, Pepper J considered a number of earlier decisions considering offences against s 144(1) of the POEO Act. I have considered those decisions and Pepper J's analysis of the earlier decisions, and I am conscious that a number of those cases concern the intentional commission of offences which makes them readily distinguishable from the present proceedings however I have taken some guidance from the range of penalties imposed. 183. In Smart Skip, the defendant was charged with an offence under s 144(1) of the POEO Act in circumstances where the premises, including waste facilities which stored, separated or processed more than 30,000 tonnes of waste per year, was required to hold an EPL. The circumstances of the case included there being no evidence of actual harm to the environment and the maximum penalty for an offence under s 144 of the POEO Act being at that time $1,000,000 for a corporation. After considering a number of cases (including those considered by Pepper J in Geoff Robinson), Pain J imposed a penalty on the corporate defendant in the sum of $50,000.
Mr Rands agreed with the EPA that the most obviously comparable case was that of Gilder, which arose directly from the same factual circumstances as this case. However, as Mr Rands correctly submitted, in that case Mr Gilder had significantly greater control over the events giving rise to the offence and that even-handedness ought therefore suggest that any fine imposed should be less than that imposed in Gilder, allowing for adjustments for subjective matters. The EPA conceded that the defendant in Gilder was more culpable than Mr Rands.

No Application of the Parity Principle

The Court must have regard to whether the parity principle applies given the commonality of involvement of Mr Gilder and Mr Rands in the commission of identical offences under s 144(1) of the POEOA arising out of the same factual circumstances. It does not matter that each has been charged separately in different proceedings (Green v The Queen [2011] HCA 49; (2011) 244 CLR 462 at [29] and [30]).
The parity principle only applies, however, to common criminal enterprises as between co-offenders, of which there is no evidence in this case (Henderson v R [2012] NSWCCA 65 at [60]). On the contrary, the evidence of Mr Rands was that he was not involved in the daily operations of the business, which were left to Mr Gilder, upon whom he was heavily reliant.

Mr Rands Agrees to Pay the EPA's Costs

Finally, Mr Rands agreed to pay the EPA's costs pursuant to s 257B of the Criminal Procedure Act 1986 fixed in the sum of $24,500. But as was noted in Gilder (at [189]): 189. It is now well accepted that a fine and a costs order serve different purposes in that a fine serves the purposes of sentencing for the offence committed by the defendant including punishment whereas a costs order serves to compensate the prosecutor, and whilst it forms part of the punishment of the defendant, it is not of itself a reason to reduce the fine otherwise considered appropriate: Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170 at [50].

Appropriate Sentence

Having regard to the objective seriousness of the offence and the mitigating subject factors of Mr Rands, together with the penalties imposed in the relevant comparable cases, I consider that the appropriate penalty to be imposed for Mr Rands's contravention is a fine of $45,000. This figure must be discounted by 25% for the utilitarian value of his plea of guilty, which results in a fine of $33,750.

Orders

The Court therefore makes the following orders: 1. Mr Geoffrey Rands, is convicted of the offence against s 144(1) of the Protection of the Environment Operations Act 1997 as charged; 2. Mr Rands is fined $33,750; 3. Mr Rands is to pay the prosecutor's costs of the proceedings agreed in the amount of $24,500; and 4. the exhibits are to be returned.

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: 08 March 2019

(1993) 113 LGERA 357

(2006) 145 LGERA 234

(2002) 123 LGERA 269

(2006) 148 LGERA 299

(2006) 145 LGERA 189

(2010) 179 LGERA 386

(2009) 170 LGERA 253

(2003) 126 LGERA 219

At a glance

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Judgment (33 paragraphs)

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Cases Cited (47)

Cited By (20)