172 CLR 319
Environment Protection Authority v Multi-Fill Pty Ltd (1997) 93 LGERA 131
George v Rockett [1990] HCA 26
170 CLR 104
Goldie v Commonwealth of Australia [2002] FCA 433
117 FCR 566
Lismore City Council v Ihalainen [2013] NSWLEC 149
198 LGERA 47
Liverpool City Council v Cauchi [2005] NSWLEC 675
Source
Original judgment source is linked above.
Catchwords
172 CLR 319
Environment Protection Authority v Multi-Fill Pty Ltd (1997) 93 LGERA 131
George v Rockett [1990] HCA 26170 CLR 104
Goldie v Commonwealth of Australia [2002] FCA 433117 FCR 566
Lismore City Council v Ihalainen [2013] NSWLEC 149198 LGERA 47
Liverpool City Council v Cauchi [2005] NSWLEC 675145 LGERA 1
McKinnon v Secretary, Department of Treasury [2006] HCA 45228 CLR 423
Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40162 CLR 24
Minister for Immigration and Border Protection v Singh [2014] FCAFC 1231 FCR 437
Minister for Immigration and Citizenship v Li [2013] HCA 18249 CLR 332
New South Wales v Hunt [2014] NSWCA 47
Pace Farm Egg Products Pty Ltd v Newcastle City Council [2006] NSWCCA 403151 LGERA 260
Queensland Bacon Pty Ltd v Rees [1966] HCA 21115 CLR 266
Ruddock v Taylor [2005] HCA 48222 CLR 612
R v Rondo [2001] NSWCCA 540126 A Crim R 562
Ryding v Kempsey Shire Council [2008] NSWLEC 306
SD v New South Wales Crime Commission [2013] NSWCA 4884 NSWLR 456
Sean Investments Pty Ltd v MacKellar [1981] FCA 191
38 ALR 363
Taikato v The Queen [1996] HCA 28
Judgment (30 paragraphs)
[1]
Introduction
Sydney Drum Machinery Pty Ltd (the Company) has been charged with the commission of three offences against the provisions of the Protection of the Environment Operations Act 1997 (NSW) (the Act). The Company's sole director, Imad (Eddie) Osman-Kerim has also been charged with three offences against the Act arising out of the same facts as those that found the charges against the Company. These offences arise from the conduct by the Company of a drum cleaning and repair business at 75 Christie Street, St Marys (the Premises).
In proceedings 2016/158196 (13/50008) the Company is charged that between 10 October 2011 and 18 January 2012, it committed an offence against s 64(1) of the Act in that it contravened a condition of a notice suspending an environment protection licence, that condition operating to prevent the Company from receiving containers at its Premises while its licence was suspended. In proceedings 50010 of 2013, Mr Osman-Kerim is charged with the same offence in his capacity as a director of the Company.
In proceedings 2016/158195 (13/50007), the Company is charged with an offence against s 91(5) of the Act in that, without reasonable excuse, it failed to comply with a clean-up notice given to it on 17 January 2012. The period over which the failure to comply occurred is alleged to be "from about 5.00pm 17 January 2012 to about 30 January 2012". Mr Osman-Kerim is charged with the identical offence, again in his capacity as a director of the Company (proceedings 2016/158258 (13/50012)).
The Company is charged with a further offence against s 91(5) of the Act in that, without reasonable excuse, it failed to comply with a clean-up notice given to it on 24 January 2012 (proceedings 2016/158197 (13/50009). The period in which non-compliance with the notice is alleged to have occurred is "between about 24 January 2012 and 30 March 2012". Again, Mr Osman-Kerim is charged with that same offence in his capacity as a director of the Company (proceedings 2016/158257 (13/50011)).
It is convenient to refer to the clean-up notice given on 17 January 2012 as "the 17 January Notice" and that given on 24 January 2012 as "the 24 January Notice".
At the time that each offence is alleged to have been committed, the Company was registered under the Corporations Act 2001 (Cth). However, on 7 April 2013 the Company was deregistered pursuant to s 601AB of that Act. As a consequence, the prosecutor asks that the charges against the Company be dismissed. However, that circumstance does not deny the right of the prosecutor to proceed with the prosecution of offences against Mr Osman-Kerim, albeit that the charges against him are brought in his capacity as a director of the Company and are founded upon the acts of the Company.
Mr Osman-Kerim had initially pleaded not guilty to the offences alleged in all three charges brought against him. However, in the course of the trial he has pleaded guilty to the offence against s 64(1) of the Act but maintained his plea of not guilty to the offences against s 91(5). While the evidence adduced in support of the charge under s 64(1) will be referred to, my focus will be upon the charges in respect of which the plea of not guilty is maintained.
[2]
Relevant statutory provision
Before turning to the facts that give rise to the commission of the offences charged, it is appropriate to identify the statutory provisions against which those facts are to be understood. The provisions to which I refer are those in force at the time of commission of the offences charged.
Section 64 of the Act relevantly provides:
"64 Failure to comply with condition
(1) Offence
If any condition of a licence is contravened by any person, each holder of the licence is guilty of an offence.
Maximum penalty:
(a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or
(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.
…
(3) Application
This section extends to conditions to which the suspension, revocation or surrender of a licence is subject under section 81. For that purpose, a reference to the holder of the licence includes a reference to the former holder of the licence."
Section 81(1) authorised the suspension of a licence either unconditionally or subject to conditions. Subsection (3) of that section provided:
"(3) The appropriate regulatory authority may, by notice in writing given to the former holder of the licence, attach new conditions to, or vary or revoke any existing conditions of, the suspension, revocation or surrender of the licence."
The prosecutor was "the appropriate regulatory authority" (s 6(1)). The term "licence" is defined in the Dictionary to the Act to mean "an environment protection licence".
The entitlement to give a clean-up notice and the consequence of failure to comply with such a notice is found in s 91 of the Act. That section relevantly provides:
"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:
(a) in the case of a corporation - $1,000,000 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues, or
(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."
[3]
Facts pertaining to the offences charged
The relevant facts and circumstances pertaining to the offences charged are generally founded upon a Statement of Facts (Exhibit B) and a number of documents tendered in evidence without objection. The Statement of Facts was the subject of a consent order made by Biscoe J on 12 August 2013 pursuant to s 247M(1)(a) of the Criminal Procedure Act 1986 (NSW). Further facts are found in affidavits read in the course of proceedings and oral evidence given at trial.
At all times prior to and during the period from 10 October 2011 and 30 March 2012, being the period during which the offences charged are alleged to have occurred, the Company traded as Better Drums Pty Ltd (Better Drums) and held Environment Protection Licence No 12893 (the EPL). That licence enabled the Company to undertake container reconditioning and "waste processing (non-thermal treatment)" at the Premises. Mr Osman-Kerim was not only the sole director of the Company, he was also involved in the daily management of its business at the Premises.
[4]
The Premises and their use
The Premises comprise a battle axe allotment of land with a long driveway from Christie Street leading to an irregularly shaped area of land upon which the Company conducted its activities. Erected on that "head" of land is a rectangular factory building oriented to the north-east with hard paved areas surrounding the building. A number of drainage structures are found both along the access handle and within the paved area to the north-east, north and north-west of the factory building.
Tendered in evidence was the Statement of Environmental Effects prepared for the Company when development consent was sought for the development of the Premises in October 2007 (the SEE) (Exhibit W). The SEE describes the nature of the activities carried on by the Company. For the purpose of understanding the present charges, it is appropriate to give a brief description of those activities, taken from the SEE, and evidence led before me that was not controversial.
The Company cleaned and as needed, reconditioned, intermediate bulk containers (IBCs) used as chemical containers. Chemicals used to clean these IBCs were stored within the factory building and included hazardous materials such as sodium hydroxide in flakes, sulphuric acid and other chemicals used as additives in the cleaning process.
IBCs were reused numerous times by suppliers of liquid products. Although the majority of IBCs washed and treated by the Company were plastic containers approximately 1m³ in size, other larger containers or drums were also processed by the Company. On receipt at the Company's Premises, the IBCs were emptied using a vacuum lance. The liquids so extracted were stored on site prior to being removed for disposal at a liquid waste facility. The containers then passed along a washing line in which they were exposed to a caustic cleaning solution spray both internally and externally. That washing liquid was then drained and returned from a sump into a holding tank system where it was retained for reuse. Retained washing liquids were used several times before requiring transfer to a waste water plant. The containers were then further rinsed, dried and stored ready for delivery to the owner or for sale. A waste water treatment plant was located on site in order to treat the washing liquid, thereby enabling its use on multiple occasions.
The process of cleaning and waste water treatment was undertaken in an area on the south-eastern side of the factory building within a bund of about 10cm in height that extended to the south-eastern wall of the factory. Immediately to the south of that area were located four 45,000L and one 20,000L above-ground storage tanks. While Exhibit W states that the latter tank had a capacity of 20,000L, other evidence refers to the capacity of that tank as being 18,000L. Nothing turns upon that difference. The 45,000L tanks were cylindrical in shape and stood vertically above the factory floor. The 20,000,000L tank was also cylindrical but was lying horizontally on supports close to the floor. The four 45,000 litre tanks were contained within a bund also of about 10cm in height, while a bund of the same height contained the 20,000,000L storage tank. Again, the bund for each of those areas ran to the south-eastern side wall of the factory so that the wall, in effect, completed the bunded enclosure.
[5]
The EPL
The EPL was subject to a number of conditions. Included among those were the following three "operating conditions":
"O5.2 the number of metal drums on the Premises must not exceed 100 at any one time.
O5.3 The total number of containers (including drums or intermediate bulk containers) ('IBCs') at the Premises must not exceed 3,000 at any one time.
O5.4 All containers shall be stored wholly within the building".
By a Notice of Suspension of Licence dated 5 October 2011 (the Suspension Notice), the prosecutor notified the Company that the EPL was suspended. After recording inspections of the Premises by officers of the prosecutor on 16 March, 20 April and 2 September 2011 when, on each occasion, the number of metal drums and intermediate bulk containers exceeded the numbers specified in the EPL and were being stored outside the building located on the Premises, the Suspension Notice stated that the EPL was suspended for the reason that conditions O5.2, O5.3 and O5.4 had been contravened. Further reasons included:
"b. The receipt and storage of more than 3,000 containers and the storage of containers not wholly within the building at the Premises is likely to cause pollution and impact on the surrounding environment; and
c. The suspension of the Licence and the works required to be carried out under the conditions of the suspension are a practical measure to control and mitigate pollution from the excessive number of containers received and stored at the Premises and the storage of containers not wholly within the building at the Premises and to protect the environment from harm as a result of this pollution."
As s 81(3) of the Act allowed, a number of conditions were imposed by the Suspension Notice. The first two conditions expressed in par 3 of the Suspension Notice, stated:
"a. The licensee must ensure that no containers are received at the Premises while the licence is suspended.
b. The Premises must be maintained in a condition which minimises or prevents any pollution of waters from the Premises." (Original emphasis).
Subparagraphs c, d and e of par 3 imposed time limits within which excess drums and containers were required to be removed from the Premises and all containers stored outside were either to be removed from the Premises or relocated "to within the building at the Premises". Subparagraph f imposed an obligation on the Company to provide receipts and dockets "showing" that removal from the Premises of excess containers had occurred and that excess number of containers had been taken to a facility that could lawfully receive them.
[6]
Delivery of containers to the Premises contrary to the suspension notice
Notwithstanding receipt of the Suspension Notice, Mr Osman-Kerim admits that there were "occasions in December 2011" when trucks either belonging to or contracted to Toll North Pty Limited (Toll) entered the Premises carrying containers or drums while the Suspension Notice remained current. In fact, the evidence obtained by the prosecutor established that on 17 November 2011, 72 containers were delivered to the Premises by Mr Pace who was a subcontract driver for Toll or one of its subsidiary companies. Evidence was also obtained by the prosecutor that Mr Purin, also a subcontract driver to Toll, delivered two containers to the Premises on 24 November 2011. That evidence included delivery dockets from Toll for the containers delivered on those dates together with an acknowledgement given by Mr Osman-Kerim in a record of interview conducted with officers of the prosecutor that the signature appearing on one of those dockets acknowledging receipt at the Premises was his signature.
By letter dated 25 November 2011, the Company informed the prosecutor that it had complied with all conditions of the Suspension Notice. Clearly, that statement is incorrect, not only because of the deliveries that occurred on 17 and 24 November but also because Mr Osman-Kerim later admitted that there had been some deliveries to the Premises in December 2011.
In light of the evidence to which I have referred, the plea of guilty to the offence charged under s 64(1) of the Act is unsurprising. Based upon that evidence together with the plea of guilty entered by Mr Osman-Kerim, I am satisfied beyond reasonable doubt that the Company, being the holder of the EPL that was suspended by Notice dated and given on 5 October 2011, received 72 containers at the Premises on 17 November 2011 and a further two containers on 24 November 2011 at those Premises while Condition 3a of the Notice of Suspended Licence remained an operative condition of that suspension. In so doing, the Company acted in contravention of s 64(1) of the Act.
[7]
Inspections of the Premises prior to the charge period
Alexander Bourne, an officer of the prosecutor, visited the Premises on 2 September 2011. The purpose of his visit was to conduct "an announced compliance inspection". Mr Osman-Kerim was present at that time. Among other matters, Mr Bourne observed that one of the 45,000 litre storage tanks appeared to have overflowed as there was liquid waste with a strong solvent smell pooled on the factory floor within the storage tank bunded area. When this matter was drawn to the attention of Mr Osman-Kerim, he is recorded by Mr Bourne as stating that the tank "overflows from time to time when the filter blocks up". On a further visit to the Premises on 28 September 2011, Mr Bourne observed liquid waste that appeared to have spilled within the waste water treatment area but which was being contained by the bund surrounding that area. Waste water within the floor of the waste water treatment plant was also observed by Mr Bourne when inspecting the Premises on 5 October 2011. On each occasion the spilled waste water had a strong solvent smell.
Mr Bourne again inspected the site on 14 October 2011 in company with, among others, Maree Davidson, an inspector from WorkCover NSW. Mr Bourne recorded an observation then made that the sight gauges on the above ground storage tanks associated with the waste water treatment system were broken. The Company's representative on that occasion, Sandra Kemp, who was described as the Company's Operations Manager, along with three other employees of the Company stated that the tanks overflowed on a regular basis due to blockages.
On 18 October 2011, Mr Bourne was provided by WorkCover with a copy of a number of notices issued to Better Drums at the Premises, including Improvement Notice 7-236463, identifying potential exposure of risk to the health and safety of employees "due to the inadequate provision of spill containment for the dangerous goods stored or handled at the place of work, particularly the wash bay water treatment tanks, that had various substances or various classes being treated and regularly overflowing". The measure required by the Notice was the provision, so far as is reasonably practicable, "for the containment of spills from the water treatment tanks holding various classes of dangerous goods" (Exhibit O(1) at Tab 3).
Another of the copy Notices received by Mr Bourne that day from WorkCover was Improvement Notice 7-236469, also directed to Better Drums. Again, the Notice identified potential exposure of risk to the health and safety of employees at the Premises "due to the plant not being maintained in a safe condition e.g. water tanks regularly overflow due to paper [sic] blockages, sight gauges broken or not functioning". The Notice required that the Company implement and maintain a system "to ensure that the water tanks are inspected, cleaned and maintained in a safe operating/working condition according to the Manufacturer's requirements".
[8]
Water samples tested
Liquid samples taken at various times from within the Premises, the SRT and the unnamed watercourse were subject to chemical and ecotoxicological analysis. Those reports were assessed by Mareno Julli, head of Ecotoxicology Testing Services in the Ecotoxicology and Environmental Contaminants Section and Environment Protection Sciences branch of the Office of Environment and Heritage. Mr Julli swore an affidavit for the purpose of the proceedings. He was called to give evidence by the prosecutor and cross-examined on behalf of Mr Osman-Kerim.
In respect of samples collected on 16 January 2012 from within the bund of the waste water plant, Mr Julli stated at par 27 of his report (Exhibit K):
"The samples contained a number of chemicals at concentrations well above those known to be environmentally hazardous to aquatic organisms including fish, frogs and invertebrates."
Mr Julli also discussed samples collected following the second fire at the Premises on 23 January 2012. Samples taken on that day from the unnamed watercourse and in South Creek, together with samples subsequently taken at various locations both within and outside the Premises led to the following conclusion at par 50 of his report:
"50. Based on the results of the chemical and ecotoxicological testing of the collected samples,
I consider that the incident occasioned actual and likely non-trivial harm to the aquatic eco-system environment of the Dunheved Golf Course Creek, at least 500 metres from the source of the various chemicals.
The level of acute toxicity to a range of aquatic organisms, evident in samples collected on 23/01/12 from the Golf Course Creek (rapid lethal toxicity in 1% sample concentrations), are sufficient to have effectively eliminated most aquatic life present.
Various chemicals present in the contaminated liquid in the Dunheved Golf Course Creek, were detected at trace concentrations downstream in South Creek. This indicates significant dilution and/or the EPA sampling missing an earlier pulse discharged to South Creek. Based on the collected samples, there is limited evidence to suggest that actual harm occurred in sections of South Creek, downstream of the confluence with the Golf Course Creek.
I consider that without the bunding having been put in place by EPA designed to stem the flow from the Premises, then there was a high likelihood of harm occurring to a significant length of the aquatic eco system of South Creek due to the highly toxic cocktail of chemicals contained in the material leased from the Premises and present in the Golf Course Creek."
[9]
Further evidence: the fire of 23 January 2012
There is further evidence that must be recorded directed to the second fire event at the Premises, namely that which occurred on 23 January 2012. That fire was one that occasioned very substantial damage to the factory building on the Premises. The roof collapsed, with the result that all internal areas of the factory were exposed to the elements. Water used to fight the fire resulted in flows across the factory floor and external pavement, referred to as "firewater", was contaminated. The water flowed towards the low point of the Premises, being in the north-western corner of the site, close to where the SRT was located. I have earlier described the observations made by Mr Bourne and Mr Reece as to the flow of contaminated firewater when they visited the Premises during the morning of 23 January.
The significant damage occasioned by the fire resulted in general access to the Premises being denied both by officers of Fire and Rescue NSW and police officers who were investigating the fire. While all access to the factory building was absolutely denied because of its dangerous condition, access to the external area of the Premises was allowed to officers of the prosecutor, as was apparent from the fact that they were able to record the observations that are earlier stated. The evidence is imprecise as to the exact period during which general access to the site was denied but I am satisfied that it was about three or four days. Clearly, the restriction upon entry did not prevent trucks being used to access the external areas in order to remove waste liquid from the SRT.
Mr Osman-Kerim gave evidence that during the restricted access period, he experienced difficulty in gaining access to the Premises and, on at least one occasion he was prevented by security personnel from entering the driveway to the Premises. I will refer to his evidence presently.
Earlier, reference has been made to the discussion between Mr Bourne and Mr Osman-Kerim on 24 January when Mr Bourne first gave verbal clean-up directions to Mr Osman-Kerim, not only to isolate the SRT but to maintain the level of liquid waste in the SRT to a level below 30 percent of its capacity. Having given the direction verbally, Mr Bourne gave evidence that the conversation proceeded to the following effect:
"IOK: I am concerned that I will not be able to access the site to comply with the clean-up direction.
AB: If you have any issues with access to the site in order to comply with the clean-up directions please advise EPA and EPA will assist in gaining entry.
AB: The EPA will be inspecting the site between 2.00 and 3.00 today. Can you be available to meet us there?
IOK: I am not available, however Sandra Kemp, Operations Manager of Sydney Drum Machinery Pty Ltd, can be present and can act on behalf of Sydney Drum Machinery.
AB: Okay."
[10]
Evidence of Mr Osman-Kerim
An affidavit affirmed by Mr Osman-Kerim was read and he was called to give evidence. He acknowledged that he was "at all relevant material times" a director of the Company. That Company had entered into a lease of the Premises in November 2007. At the time of entering into that lease, the factory building on the Premises had been constructed but not previously occupied.
Mr Osman-Kerim stated that the Company's business was to acquire plastic drums that had been used for industrial purposes. Those drums were either cleaned and reconditioned for the purpose of resale or cleaned for subsequent return to their respective owners.
In preparing the Premises to conduct its business, work carried out included the construction of bunding around the above-ground storage tanks and along the entrance to the wash bay structure used for the purpose of cleansing drums. In addition, the bunds around access doors to the buildings were constructed. All work had been inspected, after completion, by officers of the prosecutor.
Mr Osman-Kerim states that at no time prior to 17 January 2012 was it asserted on behalf of the prosecutor that the bunding was inadequate. That statement needs to be considered in the context of the evidence from Mr Bourne, not contradicted by Mr Osman-Kerim, that he, Mr Bourne, had visited the Premises in 2011 with a senior inspector from WorkCover when one of the issues identified was the inadequacy of bunding.
The escape of liquid waste into the adjoining site and factory of Lisbon Engineering during 2011 was acknowledged by Mr Osman-Kerim. He stated that the seal at various points between the floor and wall closest to the Lisbon Engineering site had given way, with the consequence that liquid waste escaped. He states that the seal was ultimately repaired. The fact that there was liquid waste lying on the factory floor and able to escape was attributed by Mr Osman-Kerim to a pump that had broken down and which was ultimately replaced by a new pump in December 2011.
Following the fire that occurred on 16 January, Mr Osman-Kerim states that the only damage occasioned to the Premises by fire was to the upstairs office area. He states that there was "absolutely no interference by this fire with any of the processes of the Company, save for its clerical function". Nonetheless, the factory did not operate after that time.
[11]
Expert evidence
John Forrest, a civil structural engineer, was called by Mr Osman-Kerim, his intention so to do being notified to the prosecutor (cf s 247K(f) of the Criminal Procedure Act). The prosecutor called Gary Ryan, a civil engineer, to respond to the evidence of Mr Forrest. Each engineer prepared reports (Exhibits 1 and 2 in the case of Mr Forrest and Exhibit Y in the case of Mr Ryan). By agreement between the parties at trial, the engineers gave their evidence concurrently. Their evidence was directed to the clean-up directions contained in the 24 January Notice.
In his first report (Exhibit 1), Mr Forrest stated that he first visited the Premises on 9 September 2013, that is almost 20 months after the fire of 23 January 2012. He was provided with plans, including a site and drainage plan, the 24 January Notice and the affidavit evidence prepared by Mr Bourne on behalf of the prosecutor. At the time of his inspection, the factory building on the Premises had been substantially demolished, with only the two storey office addition remaining. The surface of the entire site comprised hardstand while some evidence remained of bunding within the former factory building.
Mr Forrest expressed the opinion that, following the fire on 23 January 2012, there were two containment options appropriate to address the discharge of contaminated liquid from the Premises, given that all paved areas of the Premises, including the former factory floor which had no roof, formed the catchment area upon which rain would fall because of the collapsed roof. The first option involved sand bag "bunding" around the perimeter of the factory building, built to a height of about 150mm above slab level.
The second option he posited was further sand bag bunding around the north and north-eastern boundaries of the Premises to retain water to a maximum depth of about 1m at the lowest or "sag point" level of the Premises. In addition, both options would require that the outlet pipe of the SRT be sealed or "isolated" and that any open-grated drains within the external pavement areas also be blocked.
Mr Forrest further stated in Exhibit 1 that the requirements of the January 24 Notice, directing that the level of the SRT be maintained at 30 percent "was not a reasonable method to achieve the prevention of the spillage of contaminated liquid into South Creek (par 8.21). He stated that the requirement of the Notice was unreasonable "because it placed an unrealistic expectation on Better Drums" (at par 8.22). In his report responding to that prepared by Mr Ryan, Mr Forrest stated in Exhibit 2 that the core conclusion of his first report was that Direction 3a in the 24 November Notice "was demonstrably impractical and consequently did not contribute to the elimination of risk of contaminants entering South Creek" (at par 2.1).
[12]
The offence against s 91 of the Act: 17 January Notice
It is next necessary to apply the evidence to which I have referred to the elements of the offences charged. Relevant to the present charge, the elements of the offence against s 91(5) would seem to me to require proof of the following:
1. that the prosecutor was "the appropriate regulatory authority";
2. that, in its capacity as such an authority, the prosecutor gave notice in writing to the Company;
3. that the notice was directed to the Company as occupier of the premises to which the notice related;
4. that at the time of giving the Notice, the prosecutor reasonably suspected that a pollution event had occurred or was occurring;
5. that the notice specified clean-up action to be taken within a time specified in that Notice;
6. that the Company, without reasonable excuse, did not comply with the notice given to it; and
7. that Mr Osman-Kerim was, at the time at which the offence is alleged to have been committed, a director of the Company (cf s 169(1) of the Act).
Proof of elements (i), (ii) and (vii) is not in issue. By operation of s 6(1) the prosecutor is "the appropriate regulatory authority" for the purposes of the Act, subject to exceptions that are not presently relevant. Further, the Statement of Facts (Exhibit B) accepts that the 17 January Notice was given by the EPA and received that same day by Mr Osman-Kerim. Exhibit B also acknowledges that during the charge period, Mr Osman-Kerim was the sole director of the Company, involved in the daily management of the business of the Company at the Premises (par 10).
For these reasons, I am satisfied beyond reasonable doubt that each of elements (i), (ii) and (vii) are established.
[13]
Element (iii) of the offence: the Company as occupier of the Premises
By its notice under s 247K of the Criminal Procedure Act, it is admitted that the Company had the care and control of the Premises as lessee until 24 January 2012. Thereafter, it is not admitted that the Company "was in possession of the Premises at all of the times that the prosecutor says are all of the relevant times". That qualification was not addressed on behalf of the defendant in final submissions to me.
The prosecutor relies upon a number of matters in support of a submission that the Company was the relevant occupier. First, it points to the provisions of s 258 of the Act that provides:
"258 Evidence relating to occupier of premises
(1) In any proceedings under this Act, no proof is required (until evidence is given to the contrary) of the fact that a person is, or at any relevant time was, the occupier of any premises to which the proceedings relate.
(2) In any proceedings under this Act, the holder of a licence under this Act in respect of any premises at a particular time or period is taken to be the occupier of the premises at that time or during that period."
The fact that the Company held the EPL which, although suspended, had not been revoked, would appear sufficient to engage the provisions of s 258(2). Unlike the position that pertains in respect of subs (1), the fact that the holder of a licence "is taken to be the occupier of the premises" is not subject to the giving of any contrary evidence. I can only assume that the qualification expressed by the defendant as to its position after 24 January 2012 is founded upon the exclusion of Mr Osman-Kerim from the Premises by police and fire officers following the fire that occurred on 23 January. However, the fact of his exclusion for a short period did not result in the Company ceasing to occupy the Premises.
The evidence of Mr Osman-Kerim is consistent only with a continued assertion of his entitlement to exercise control over the Premises. So much is made apparent by the affidavit affirmed by him for the purpose of these proceedings. He there states that in the "ensuing days and weeks" following the second fire, he "went to the Premises almost every day". Clearly, he did so for the purpose of exercising his entitlement to occupy the Premises. Further, his actions subsequent to being afforded access to the Premises, engaging consultants to advise him as to compliance with the clean-up notices and arranging to pump out the SRT on three occasions, are actions consistent with the right of the Company as occupier of the Premises.
[14]
Element (iv) of the offence: reasonable suspicion that a pollution event has occurred
This element of the offence is in issue between the parties. It is clear from the evidence that the requirement imposed by Direction 3 of the 17 January Notice had not, as a matter of fact, been obeyed by 5.00pm on 17 January. Indeed, it was not observed until 30 January when, at the instance of the prosecutor, the SRT was "isolated" or sealed. Failure to have isolated the SRT is evident from the inspections carried out by Mr Bourne on 20, 23, 24, 25, 27 and 30 January. On each occasion he observed that the SRT had not been isolated, other than by the temporary measure implemented by Mr Reece on 23 January when he inserted a traffic cone into the outlet pipe. Evidence of the observations made on each of those occasions is detailed earlier in these reasons.
In addition to the evidence of Mr Bourne, the evidence of Mr Osman-Kerim in this context must also be noted. Mr Bourne gave evidence that on 19 January 2012 he had a conversation with Mr Osman-Kerim in which isolation of the SRT was discussed and in the course of which Mr Osman-Kerim said "Tomorrow I will get the stormwater retention tank sealed". Mr Bourne was not challenged on that evidence. At the time of that conversation the specified time for compliance had passed although the obligation to comply continued: s 319A of the Act. Further, Mr Osman-Kerim acknowledged in cross-examination that the SRT had not been sealed when the fire of 23 November occurred (Tcpt 461:35-37).
However, proof that the requirement of Direction 3 of the 17 January Notice had not been obeyed by the Company does not provide an answer to the challenge made by Mr Osman-Kerim to the validity of the Notice. It is that challenge that must next be considered.
[15]
Reasonable suspicion of a pollution incident
Mr Bourne's attendance at the Premises on 16 January was triggered by a report to him that a fire had occurred at the Premises earlier in the day. When asked in cross-examination to identify the "pollution incident" he responded (Tcpt 155:23):
"A. The pollution incident was the - there was the spill of liquid waste from the tanks, and in my opinion the likelihood that without action being taken that that liquid waste would enter the stormwater system and impact the local creek."
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.
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; 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 Chambers's Dictionary expresses it."
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 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 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).
[16]
Clean-up action related to the pollution event
I do not accept the contention made by Mr Osman-Kerim that the clean-up action required by the 17 January Notice was not causally related to the pollution event that Mr Bourne identified. I have earlier quoted the definition of clean-up action from the Dictionary to the Act. Such action is relevantly directed to preventing, minimising or mitigating any pollution likely to result from the pollution incident. The pollution incident was the likelihood of liquid waste from the factory floor flowing into the SRT and then into the unnamed watercourse ultimately leading to South Creek.
The facts to which I have referred, considered in the context of the definitions that I have discussed, amply demonstrate the relevant nexus between the clean-up action requiring the isolation of the SRT, as a consequence of the pollution event.
There are two matters raised on behalf of Mr Osman-Kerim, directed to the 17 January Notice and the reasonableness of the suspicion held by Mr Bourne to found the giving of that Notice, that must be addressed. First, reference is made to evidence given by Mr Bourne in cross-examination in which he accepted the proposition that the sealing of the SRT "had nothing to do with the escape of some liquid to the opposite side of the structure where Lisbon Engineering was" (Tcpt 171:16-19). The submission, as I understood it, was that acceptance of that proposition by Mr Bourne meant that it could not be relevant to the formulation of the clean-up direction given for sealing of the SRT. I do not accept that submission.
The response of Mr Bourne to the proposition was that the SRT would not capture the liquid waste escaping to the adjoining premises of Lisbon Engineering with the consequence that isolating the SRT would have no impact upon that liquid waste. Given the evidence of the site topography, the response is unexceptional. However, the fact that liquid waste had, in November 2011, escaped from the internally bunded factory building and was also escaping on 16 January following a fire, were circumstances relevant to the formation of a suspicion as to the occurrence of a pollution event and the need for clean-up action. The fact that liquid waste had in the past escaped and was then escaping from one side of the factory building did not render it irrelevant to consider the possibility of escape from another part of the building.
[17]
Terms of notice vague and uncertain
Mr Osman-Kerim submits that the 17 January Notice was vague and uncertain, rendering it incomprehensible because of what is said to be the stipulation of two different times in Direction 3 of that Notice. The first time stipulation arises from use of the word "immediately" at the commencement of the Direction and the second is the time that concludes the Direction, namely "by 5.00pm on 17 January 2012". He submits that if the two times relate to the one event then the Direction is incomprehensible. If the different times identify two events, the first of which is the time at which a suitably qualified expert is to be engaged, then compliance would be impossible because it assumes that there is such an expert immediately available who will immediately agree to undertake the required task. If the second time and date refers to a different event then, so it is submitted, the requirement "makes no sense because the time and the date refer to liquid waste not leaving the Premises by that time and date; the words do not say that by that time steps must be taken to ensure that no liquid waste spilt in the Premises leave those Premises after that time and date". I do not accept that submission.
The 17 January Notice is, to my mind, tolerably clear in its terms. The first step to be taken was the engagement "of a suitably qualified expert", that is, a plumber. On any reasonable and rational interpretation, the obligation cast upon the Company from the time of delivery of the Notice was to put in train, without any delay, the process of engaging a plumber to carry out the task stipulated in the direction. The stipulation of 5.00pm on 17 January was a stipulation of the time by which the isolation action taken as a consequence of engaging a plumber was to be completed in order to achieve the objective of preventing the discharge of liquid waste from the SRT into the unnamed watercourse.
The manner in which I find the Notice should be understood does not do violence to the language used in Direction 3. In the circumstances in which the Direction was given, it was objectively apparent to anyone familiar with the Premises, as was the Company through Mr Osman-Kerim, that sealing or isolating the SRT to prevent discharge from it was the subject matter of the Notice. The circumstances to which I refer include not only the state of the Premises on both 16 and 17 January, as earlier described, but also the circumstance that an oral notice had been given to Mr Osman-Kerim on 16 January requiring that the SRT be isolated (see [55] above).
[18]
Failure to take account of relevant considerations
Mr Osman-Kerim also submits that the decision-maker "acted unreasonably and failed to take into account considerations that she or he ought to have taken into account". Those considerations are generally a recounting of the basis upon which Mr Bourne was cross-examined, namely:
1. failing to take any reasonable steps to support his belief that the above ground storage tanks were nearly full;
2. failing to check the prosecutor's record as to "previous records relating to the failure or otherwise of the tanks or any of them to maintain the liquid they stored";
3. failing to take steps to ascertain whether the lack of electrical power to the Premises was likely to bring about "any significant flooding of the material contained in any one or more of the storage tanks" (sic);
4. failing to consider whether, if one or more of the storage tanks failed, the bunding of the factory was adequate to prevent the flow of liquid waste to the SRT;
5. acting upon a false understanding of the WorkCover Notices directed to the inadequacy of bunding to prevent liquid waste discharging to the SRT and
6. failing to ascertain from the Company's officers "the method by which the factory system operated" namely, whether there was a system that prevented any significant flow of water leaving the above ground storage tanks as a result of the loss of power.
It is not submitted that the considerations identified were mandatory considerations imposed by or as a consequence of s 91 or any other provision of the Act. That is significant and weighs against the submission that Mr Osman-Kerim makes (Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24 per Mason J at 39). As Deane J observed in Sean Investments Pty Ltd v MacKellar [1981] FCA 191; 38 ALR 363 at 375:
"Where relevant considerations are not specified, it is largely for the decision-maker, in the light of matters placed before him by the parties, to determine which matters he regards as relevant and the comparative importance to be accorded to matters which he so regards."
Observations to similar effect were made by Mason J in Peko-Wallsend at 39-40.
What was required by s 91 was the holding by the prosecutor, through a relevant officer, of a suspicion, reasonably formed, that a pollution incident had occurred or was occurring. Relevant to that suspicion were those facts or circumstances known to the officer or officers on 16 and 17 January.
[19]
Reasonable excuse
The final basis upon which Mr Osman-Kerim submits that the offence against s 91, founded upon the 17 January Notice, has not been established is that the prosecutor has "failed to prove that the corporation failed to demonstrate a reasonable excuse." That submission overlooks the provisions of s 256(1), the terms of which are set out at [15].
The language of s 256(1) makes clear that the onus falls upon the Company to establish that it had a "reasonable excuse" for not complying with the 17 January Notice. The statutory imposition of that onus makes sense, given that the facts and circumstances said to constitute a reasonable excuse would almost always be peculiarly within the knowledge of a defendant.
The use of the word "without" immediately before the phrase "reasonable excuse" in s 91(5) does not remove the provisions of the subsection from the operation of s 256(1). Requiring the prosecutor to prove the absence of a reasonable excuse would not be consistent with the language of s 256(1) nor would it give effect to the apparent legislative purpose of that provision.
The words in parenthesis in s 256(1), namely "referred to in any provision of this Act" are relevant in this context. The phrase "reasonable excuse" is "referred to" in s 91(5) and thereby engages the provisions of s 256(1). Unless a defendant proves the existence of a reasonable excuse then, if the other elements of the charge under s 91 are proved, the failure to comply with a notice will be "without reasonable excuse".
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.
Mr Osman-Kerim submits that s 256(1) is not directed to the lawfulness of the clean-up notices given to the Company. The prosecutor does not contend to the contrary. Beyond that, Mr Osman-Kerim does not make any submission directed to the proper construction and application of that provision to s 91(5).
[20]
Section 169(1) of the Act
Mr Osman-Kerim did not address any submission directed to s 169(1)(c) of the Act in as much as that provision provides a defence if, in his capacity as a director, he "used all due diligence to prevent the contravention" of s 91 by the Company. It is clear from the chapeau to that subsection that the onus of establishing use of "all due diligence" is upon Mr Osman-Kerim.
Any reliance upon that defence would, in the present case, involve recourse to those same facts upon which the "reasonable excuse" defence arises under s 91(5).
I accept that the defence available under s 169(1)(c) requires proof on the balance of probabilities. However, for the reasons I have given in respect of the "reasonable excuse defence", I am not satisfied, on the facts, that the defence under s 169(1)(c) has been made out.
[21]
Conclusion in respect of the 17 January Notice
For the reasons stated, I am satisfied beyond reasonable doubt that the 17 January Notice given by the prosecutor:
1. was given in writing by the prosecutor in its capacity as the appropriate regulatory authority;
2. that it was given to the Company as occupier of the Premises to which the Notice related;
3. that at the time of giving the Notice the prosecutor reasonably suspected that a pollution incident had occurred;
4. that the direction given to the Company in the Notice specified clean-up action to be taken within the time specified in the Notice and was given consequent upon the pollution incident;
5. that the Company failed to comply with the Notice; and
6. that between 17 January and 30 January 2012, Mr Osman-Kerim was the sole director of the Company.
I am not satisfied, on the balance of probabilities, that:
1. the Company has a reasonable excuse for failure to comply with the Notice; or that
2. Mr Osman-Kerim used all due diligence in his capacity as a director of the Company to prevent the Company from failing to comply with the Notice.
Further, I am satisfied beyond reasonable doubt, that the Company, by its failure to comply with the Notice given to it by the prosecutor under s 91(1) of the Act has contravened s 91(5) of the Act. I am also satisfied beyond reasonable doubt that, by operation of s 169(1) of the Act, Mr Osman-Kerim has also contravened s 91(5) of the Act. He is therefore guilty of the offence with which he has been charged as it relates to the Notice given on 17 January 2012.
[22]
The offence against s 91 of the Act: 24 January Notice
As would be obvious, the elements of the offence already identified in respect of the 17 January Notice are identical to those applicable to the offence charged in respect of the 24 January Notice. However, the issues directed to those elements in respect of the present charge differ from those raised in respect of the earlier Notice.
Mr Osman-Kerim does not challenge the occurrence of a pollution incident, nor, as I understand his submission, does he challenge, at least in principle, the entitlement of the prosecutor to have issued a clean-up notice in response to the pollution incident that occurred on 23 January 2012.
Mr Osman-Kerim challenges the 24 January Notice as being invalid. Applying the jurisprudence of administrative law, his challenge is correctly expressed as being one directed to the decision of the prosecutor to give that Notice because the clean-up requirement expressed in the Notice was unreasonable and therefore the exercise of discretion to give the Notice miscarried. As I have earlier indicated, the impugned direction was that expressed as direction 3a, the provisions of which I will, for convenience, repeat:
"3a Immediately monitor and maintain the appropriate level of liquid waste in the stormwater retention tank and the adjacent stormwater pit ensuring that the retention tank does not fill in excess of 30 percent of their [sic] capacity."
It is the breach of that direction that is the subject of the present charge. The Statement of Facts (Exhibit B) accepts that officers of the prosecutor observed the SRT to be more than 30 percent full on 25 January, 27 January, 7 February, 15 February, 16 February, 20 February, 21 February, 22 February, 29 February, 2 March, 7 March, 8 March, 9 March and 20 March 2012.
Mr Osman-Kerim submits that the level of liquid in the SRT on 9 March and 20 March 2012 is irrelevant because the evidence does not establish that liquid in the SRT on those dates was "liquid waste", being the substance identified in Direction 3a. That is a matter to which I will return in due course. If it be the fact, that circumstance does not provide a defence to the charge but does limit the period during which any offence can be found to have been committed.
[23]
The challenge to validity of the 24 January Notice: defendant's submission
Central to Mr Osman-Kerim's challenge to the decision of the prosecutor to issue the 24 January Notice is that, when framing the directions, it was obliged to consider the effect that compliance with those directions would have upon the recipient of the Notice. He contends that the power to direct clean-up action is limited to action that is reasonably necessary "to achieve the objective that the legislation makes clear". Having regard to the definition of "clean-up action" in the Act, the action directed to be taken is limited to that which is reasonably necessary to prevent, minimise, remove, disperse, destroy or mitigate any pollution resulting or likely to result from the pollution incident. The fact that the clean-up action directed by the Notice may have such an effect does not justify the imposition of a requirement that goes beyond that which is necessary to achieve that result.
He argues that implicit in the exercise of the discretionary power, the prosecutor "should" give consideration to the economic and practical consequences upon the recipient when framing a particular direction. If that direction "imposes an extremely harsh burden" upon the recipient but a different direction is sufficient to achieve clean-up action, the imposition of the more burdensome requirement would involve "a wrong exercise of power".
Further, where the utility of the clean-up direction and its financial consequences for the recipient are being considered, the authority must "where it is practical and reasonable to do so", take appropriate advice concerning such matters including, where necessary, from sources not available from those in the employ of the prosecutor. The entitlement to exercise power under s 91(1) does not extend to the framing of a direction, the terms of which require "the input of knowledge and experience" outside that held by officers of the prosecutor.
Reliance is placed upon the decision of the High Court in Minister for Immigration and Citizenship v Li [2013] HCA 18; 249 CLR 332. The gravamen of Mr Osman-Kerim's argument, in principle, is said to be supported in the judgment of French CJ where in [30] the Chief Justice said (omitting the citation of authority):
"A distinction may arguably be drawn between rationality and reasonableness on the basis that not every rational decision is reasonable. It is not necessary for present purposes to undertake a general consideration of that distinction which might be thought to invite a kind of proportionality analysis to bridge a propounded gap between the two concepts. Be that as it may, a disproportionate exercise of an administrative discretion, taking a sledgehammer to crack a nut, may be characterised as irrational and also as unreasonable simply on the basis that it exceeds what, on any view, is necessary for the purpose it serves."
[24]
The prosecutor's submissions
The prosecutor correctly observes that the submissions made by Mr Osman-Kerim directed to each notice given under s 91 involves a collateral challenge to the decisions made by the prosecutor to issue those Notices. It accepts that it is open to Mr Osman-Kerim to make such a challenge in these proceedings (Liverpool City Council v Cauchi [2005] NSWLEC 675; 145 LGERA 1 at [41]; Ryding v Kempsey Shire Council at [9]).
At a level of general principle, the prosecutor submits that a decision is relevantly unreasonable only if it can be concluded that the decision-maker must have misunderstood the power being exercised because no reasonable decision-maker, understanding that power, could have made the decision. Reliance is placed upon the judgment of the plurality in Li at [66]-[67] for that proposition. Unless the decision can be so categorised, the decision-maker is left with a freedom as to the decision made, provided it is made within the confines of the power given by the relevant statute.
In the present case, the power available to the prosecutor under s 91 was enlivened because a pollution incident had occurred on 23 January and was continuing on 24 January 2012. The fact that there was a pollution incident that occurred and was occurring on those dates is acknowledged by Mr Osman-Kerim.
Whether the terms of Direction 3a were outside the power conferred by s 91 requires an analysis of both the scope of the power and the purpose for which the power is able to be exercised (Li at [67]). The prosecutor contends that the response to both the scope of the power and the purpose of its exercise are addressed by the respective definitions of "pollution incident" and "clean-up action" found in the Dictionary to the Act. They are definitions that I have earlier quoted.
As my earlier recitation of fact indicates, the pollution incident involves the escape of liquid waste from the premises into the SRT and then into the unnamed watercourse, leading ultimately to South Creek. Further, as the state of the Premises was on 23 and 24 January, there was a risk of further escape of that liquid waste.
The response of the prosecutor was to direct that liquid waste discharging into the SRT be kept at a level that was below 30 percent of its capacity, clearly intended to prevent overflow of that liquid waste into the adjoining watercourse. That solution met the description of clean-up action in that it was intended to prevent water pollution resulting from the incident.
[25]
Consideration
I have concluded that Mr Osman-Kerim's challenge to the decision of the prosecutor to give the 24 January Notice must fail. I reach this conclusion essentially for the reasons advanced by the prosecutor. Mr Osman-Kerim has not established, on the balance of probabilities, that the decision to give that Notice was, in the relevant legal sense, unreasonable.
Mr Osman-Kerim's submissions fail to grapple, in a principled manner, with the considerations that must be brought to bear when exercising the discretion under s 91. Only the failure to take account of factors or matters that the prosecutor was bound to take into account when making its decision will render that decision susceptible to challenge. Those factors or matters must be determined upon the proper construction of the statute conferring the power. Where the statute does not expressly circumscribe the discretion, its ambit must be determined by reference to the subject matter, scope and purpose of the legislative provision conferring power (Minister for Aboriginal Affairs v Pekoe-Wallsend Ltd at 39-40).
The limit of the discretion imposed by s 91 is the scope of clean-up action, as defined, so as to give effect to the purpose of the section, namely to address the consequence of a pollution incident, as defined. So understood, the cost of clean-up action to address a pollution incident is not expressly or impliedly a mandatory consideration nor is the seeking of specialist advice, notwithstanding that each may inform the decision that is made.
The fact that cost is addressed in s 91(4) supports the conclusion that the cost of compliance in determining the exercise of discretion is not a mandatory consideration. The subsection makes apparent that the entity responsible for the pollution incident is the entity responsible for payment of the cost of complying with a notice given under s 91(1). The imposition of that liability renders it unlikely that when determining the scope of clean-up action that is the subject of a direction, the financial circumstances of or economic impact upon the polluter is a mandatory consideration.
Likewise, inconvenience or difficulty in complying with a direction given under s 91(1) are not mandatory matters for consideration when deciding whether the power should be exercised. So much is apparent from the provisions of s 91(5). By operation of that subsection, if the requirement imposed is, in the circumstances, unable to be performed, that circumstance, if properly established, potentially affords the "reasonable excuse" defence identified in that subsection.
[26]
Reasonable excuse
I have earlier held that by operation of s 256(1) of the Act, the onus is upon Mr Osman-Kerim to establish, on the balance of probabilities, that the Company had a reasonable excuse not to comply with the 24 January Notice. Only very brief submissions were made at the conclusion of the hearing on behalf of Mr Osman-Kerim directed to this defence.
As the prosecutor submits, 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.
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).
The basis upon which Mr Osman-Kerim submitted that the defence was made out was founded upon the rainfall that occurred after the Notice had been given. Reference is also made to "the amount of water pumped onto the site by the Fire Brigade". The severity of the damage occasioned by the fire on 23 February and the number of fire fighting personnel present would suggest that extinguishing the fire involved a significant operation. However, the evidence does not provide any basis upon which to consider "the amount of water" used in extinguishing the fire. The submission is that the firewater together with the rainfall "occurring in such volume and falling at any time of the day and night created a situation where it was reasonable for the defendant not to be able to comply with such notices [sic]".
The facts established and Mr Osman-Kerim accepts (Exhibit B, par 48) that there were 14 occasions between 25 January and 20 March 2012 when officers of the prosecutor observed the liquid in the SRT to exceed 30 percent of its maximum capacity. Only the last two of those observations, namely those made on 9 and 20 March occurred when, so it is argued, the content of the SRT has not been shown to be "liquid waste". The evidence of Mr Osman-Kerim does not suggest that the rainfall that occurred in that period, somehow prevented tanker trucks entering the site and removing waste from the SRT. Indeed, the evidence readily discloses that such a contention could not be made, not only because there were, throughout this period, trucks attending to remove waste at the request of the prosecutor, but also because Mr Osman-Kerim established that he engaged Remondis to remove liquid waste from the SRT on 16 February, 22 February and 7 March 2012.
[27]
Section 169(1)(c)
No facts have been adduced additional to those given and discussed when addressing the reasonable excuse defence. For reasons expressed when addressing that defence, Mr Osman-Kerim has not established, on the balance of probabilities, that, in his capacity as a director of the Company, he used all due diligence to prevent the Company failing to comply with the 24 January Notice, the failure to comply with which was a contravention by the Company of s 91(5) of the Act.
[28]
Conclusion on offence by reference to 24 January Notice
For the reasons I have stated, I am satisfied beyond reasonable doubt that the Notice given on 24 January 2012:
1. was given in writing by the prosecutor in its capacity as the appropriate regulatory authority;
2. that the Notice was given to the Company as occupier of the Premises being the premises to which that Notice related;
3. that at the time of giving the Notice the prosecutor reasonably suspected that a pollution event had occurred;
4. that the directions given in the Notice required clean-up action to be taken consequent upon the pollution event;
5. that the Company failed to take the clean-up action required by Direction 3a of the Notice;
6. that at the time at which the Notice was given to the Company and thereafter, Mr Osman-Kerim was a director of the Company.
The one matter about which I have not yet recorded any finding is the period during which the Company failed to comply with the 24 January Notice. The charges in the respective summonses served upon the Company and Mr Osman-Kerim allege that the offence occurred between 24 January 2012 and 30 March 2012.
I have earlier stated that the relevant obligation imposed upon the Company by Direction 3a was to maintain the level of "liquid waste" in the SRT at a level that did not exceed 30 percent of the capacity of the SRT. Relevantly, "liquid waste" was any liquid that did or might flow to the SRT and which was either the product of fire residue or chemical substances emanating from the damaged factory building.
The analyses of liquid waste samples taken from the Premises, including the SRT, were tendered (Exhibit L) and were the subject of evidence given by Mr Julli for the purpose of establishing their likely environmental impact of the liquid waste. The latest of the samples that were the subject of analysis and upon which Mr Julli has given evidence were samples taken on 8 March 2012. As a consequence, I have no evidence establishing beyond reasonable doubt that liquid waste was present in the SRT after 8 March 2012. As a consequence, I cannot determine that there was a failure by the Company to comply with Direction 3a after that date.
Accordingly, I find beyond reasonable doubt, that the period during which the Company failed to comply with the 24 January Notice was from 24 January to 8 March 2012.
[29]
Orders
The orders that I make are as follows:
1. In proceedings 2016/158256 (50010 of 2013) I record the plea of guilty entered by the defendant on 29 September 2014.
2. In proceedings 2016/158257 (50011 of 2013) I find the defendant guilty of the offence that between 24 January 2012 and 8 March 2012, at or near St Marys in the State of New South Wales, he committed an offence against s 91(5) of the Protection of the Environment Operations Act 1997 (NSW) by reason of s 169(1) of that Act in that:
1. he was a director of Sydney Drum Machinery Pty Ltd (ACN: 102625507); and
2. that Company was given a clean-up notice and did not comply with that clean-up notice without reasonable excuse.
1. In proceedings 2016/158258 (50012 of 2013) I find the defendant guilty as charged.
2. In proceedings 2016/158195 (50007 of 2013) I order that the summons be dismissed.
3. In proceedings 2016/158196 (50008 of 2013) I order that the summons be dismissed.
4. In proceedings 2016/158197 (50009 of 2013) I order that the summons be dismissed.
5. In proceedings 2015/158256, 2016/158257, 2016/158258 (50010, 50011 and 50012 of 2013) I order that the proceedings be stood over to Friday 24 June 2016 for directions and to fix a date for hearing on sentence.
[30]
Amendments
06 June 2016 - Coversheet typo
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: 06 June 2016
v Rondo [2001] NSWCCA 540; 126 A Crim R 562
Ryding v Kempsey Shire Council [2008] NSWLEC 306
SD v New South Wales Crime Commission [2013] NSWCA 48; 84 NSWLR 456
Sean Investments Pty Ltd v MacKellar [1981] FCA 191; 38 ALR 363
Taikato v The Queen [1996] HCA 28; 106 CLR 454
Category: Principal judgment
Parties: 2016/158195-158197 (50007-50009 of 2013)
Environment Protection Authority (Prosecutor)
Sydney Drum Machinery Pty Ltd (Defendant)
The Dictionary to the Act defines the term "pollution incident" as follows:
"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 the emission of any noise."
The phrase "clean-up action" is also defined in the Dictionary in the following terms:
"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."
Section 256 of the Act identifies the onus of proof in a manner that is relevant to the provisions of s 91(5). The former section provides:
"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."
As will become apparent, both the 17 January Notice 2012 and the 24 January Notice 2012 specified a time by which compliance with some of the directions in each notice were required. Relevant to that requirement are the provisions of s 319A of the Act that provide:
"319A Continuing effect of notices and conditions
(1) A notice given, or a condition of a licence imposed, under this Act or the regulations that specifies a time by which, or period within which, the notice or condition must be complied with continues to have effect until the notice or condition is complied with even though the time has passed or the period has expired.
(2) A notice that does not specify a time by which, or period within which, the notice must be complied with continues to have effect until the notice is complied with.
(3) This section does not apply to the extent that any requirement under a notice or a condition of a licence is revoked.
(4) Nothing in this section affects the powers of a regulatory authority with respect to the enforcement of a notice or a condition of a licence."
I have stated that, as a director of the Company, Mr Osman-Kerim, has been charged with the same offences as those with which the Company has been charged. I have also recorded that the prosecutions against him are pressed, notwithstanding that the prosecutor seeks to have the charges against the Company dismissed because it has been deregistered. The entitlement of the prosecutor to proceed against Mr Osman-Kerim in these circumstances is founded upon the provisions of s 169 of the Act. That section relevantly provides:
"169 Offences by corporations
(1) If a corporation contravenes, whether by act or omission, any provision of this Act or the regulations, 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, unless the person satisfies the court that:
(a) (Repealed)
(b) the person was not in a position to influence the conduct of the corporation in relation to its contravention of the provision, or
(c) the person, if in such a position, used all due diligence to prevent the contravention by the corporation.
(2) A person may be proceeded against and convicted under a provision pursuant to this section whether or not the corporation has been proceeded against or been convicted under that provision."
Mr Osman-Kerim relies upon the exculpatory provision of s 169(1)(c) as an element of his defence to the offences against s 91(5) of the Act.
The five storage tanks that are described were said to be interconnected by piping with attached pumps. They were used as the holding tanks for the washing liquid that was pumped from the processing area. As waste liquid passed through each tank, some of the suspended solids in the liquid settled in the tank.
Apart from the 10cm bund around the wash bay and storage tank areas, internal bunds were also in place around each of the doors giving access to the factory building, although the evidence indicates that the height of those bunds was about 4cm to 5cm. Relevantly, these bunds were inside two large roller doors fixed to the north-eastern face of the factory. Those doors would appear to have been the primary means of access to the factory building by vehicles and other mobile equipment used in the conduct of the Company's business.
The Premises are located adjacent to and to the north-east of Dunheved Golf Course (the golf course). An unnamed watercourse appears to commence a short distance to the north-east of the Premises and then runs through the golf course before flowing into South Creek, a tributary of the Nepean River.
Inside the north-western boundary of the Premises and beneath the hard stand area outside the factory building is an underground stormwater retention tank (the SRT) with a capacity of approximately 200,000 litres. This SRT is designed to collect rain water that falls on the factory roof and outdoor paved areas of the Premises and then to provide a controlled release of that rainwater into the unnamed watercourse. The SRT is approximately two metres in depth.
The SEE at par 53 stated that at present there was no site isolation valve in place "in case of an incident such as a fire or chemical spill". The document further stated that the SRT "once isolated is expected to retain contaminated water on site".
Finally, Condition 4 of the Suspension Notice stated:
"4. The suspension will remain in force until such time as the licensee can demonstrate to the EPA's satisfaction (expressed in writing) that Conditions O5.2, O5.3 and O5.4 of the licence have been complied with and the EPA issues a notice indicating that the suspension is lifted."
Subject to the operation of s 84(2) of the Act, the Suspension Notice recorded that the suspension of the EPL operated from the date of the Notice. As there was no appeal to this Court against the decision to suspend the EPL, s 84(2) of the Act was not engaged. As a consequence, the EPL was suspended, subject to the conditions imposed upon suspension, on 5 October 2011.
Mr Bourne returned to the locality of the Premises on 24 November 2011. A report had been received by the prosecutor that liquid waste had leaked into a factory building that adjoined the Premises in Christie Street, St Marys. The adjoining premises were occupied by Lisbon Engineering, with its factory building located to the south of the Premises. Upon inspection of the Lisbon Engineering site Mr Bourne observed that approximately 200 to 300 litres of "a black odorous liquid" was pooled across a section of the factory floor at the northern end of the building. A similar liquid had pooled between the northern end of Lisbon Engineering building and the southern (south-eastern) wall of the Premises. A phytotoxic impact upon the grass between the two buildings was observed.
Following inspection of the Lisbon Engineering building, Mr Bourne inspected the Premises accompanied by Mr Osman-Kerim. During that inspection, Mr Osman-Kerim is recorded as stating that waste water had overflowed from a waste water tank due to a pump failure three days earlier; that the water had then flowed across the concrete floor and under the factory wall due to a failed floor/wall seal and that the escaping liquid had flowed onto the Lisbon Engineering site and into its workshop. Mr Bourne observed residual brown waste down the side of the north-eastern above ground storage tank, splash marks of residual brown waste both across containers standing at ground level and also on the walls surrounding the north-eastern tank. He also saw residual liquid waste both inside and outside of the bund that surrounded the liquid waste treatment plant. Photographs were taken by Mr Bourne, reflecting the observations that he had made on that day (Exhibit N, Tab 8). At the time, water samples were taken from a number of places including spilled waste from the above ground storage tanks. Testing of those samples showed the liquid waste to be "environmentally hazardous, with high levels of pesticides present" (Exhibit O(2) at Tab 43).
Mr Bourne returned to the Premises the following day. He again observed residual liquid waste both inside and outside the bund of the liquid waste treatment plant. A clean-up notice dated 25 November 2011 was then given to the Company.
The inspection of the Premises by Mr Bourne on 25 November 2011 was conducted in conjunction with Ms Davidson of WorkCover. As a consequence of that inspection, WorkCover issued further Improvement Notices to Better Drums and provided copies of those Notices to the prosecutor. In particular, Improvement Notice 7-238504 gave as the reason for that Notice the "inadequate provision of spill containment for the dangerous goods stored or handled", in particular the wash bay water treatment tank overflowing "into bunding that does not maintain containment or is adequate size [sic] for the storage requirements of tanks contained within the bunded area" resulting in the spill onto neighbouring property (Exhibit O(1) at Tab 7).
A further Improvement Notice issued to the Company at that time by WorkCover, a copy of which was provided to Mr Bourne, again identified a risk to the health and safety of employees using the plant "such as the water treatment tanks" and stated that water treatment tanks were "regularly overflowing due to faulty pumps and blockages, sight gauges broken or not functioning". Remedial action was required in the same terms as that expressed in the earlier Notice that had also identified blockages and faulty gauges.
On 14 December 2011, Mr Bourne again inspected the premises of Lisbon Engineering at 77 Christie Street, St Marys. He observed a "red, brown and white odorous liquid" between the northern end of the Lisbon Engineering building and the southern or south-eastern wall of the Premises. The same phytotoxic impact on grass between the two buildings that he observed on 24 November remained.
He then went to the Premises where he met Mr Osman-Kerim. During that inspection he observed "a red, brown and white odorous liquid" originating from the rear of the container wash bay. That wash bay was located on the opposite side of the south-eastern wall of the Premises to the impacted area of the Lisbon Engineering building. Mr Osman-Kerim repeated the explanation given on 24 November for the escape of that liquid and stated that a new pump had been installed on 13 December. Mr Bourne photographed the liquid he had described between the two buildings as well as the red, solvent smelling liquid located within the wash bay area and waste water sump area of the Premises.
A follow-up inspection of the Premises was carried out by Mr Bourne on 15 December 2011. The red, brown and white odorous liquid between the factory building on the Premises and the Lisbon Engineering building had not been cleaned up although it appeared that efforts were being made within the factory on the Premises to clean up the spill within the wash bay area. At that time, Mr Bourne observed a damaged IBC that was leaking an oily liquid waste onto the factory floor.
On 16 January 2012, there was a fire at the Premises that caused substantial damage to the office area within the factory and limited damage to the remainder of that building. Mr Bourne, inspected the Premises that day and noted that while fire damage to the office area was extensive, the fire did not appear to have impacted upon the liquid waste storage tanks. Small quantities of water apparently used to extinguish the fire ("firewater") were observed on the floor of the factory.
Mr Bourne also observed liquid waste both within the area of the waste water treatment system and the above ground storage tanks. That liquid waste was breaching the treatment plant bund. Liquid waste had also filled the bunded area behind the wash bays. He also noted that a fire door adjacent to the liquid waste treatment plant had been damaged with a photograph then taken, revealing that the bottom section of that fire door had been broken open.
Mr Osman-Kerim was present during that inspection. When the liquid waste within the area beneath the storage tanks, wash bays and waste treatment plant were pointed out to him, he stated that he was unaware of the spilled liquid waste, how it had occurred or the cause of the spill within the treatment and storage areas.
Section 93 of the Act enabled a regulatory authority or a person acting in accordance with an authority from that authority, to give a clean-up direction orally. On 16 January 2012 Mr Bourne was an authorised officer under the Act. Exercising his authority and relying upon the provisions of s 93(1) of the Act, he issued a verbal clean-up direction to Mr Osman-Kerim in the following terms:
"1. Engage a suitably qualified liquid waste removalist to remove all liquid waste from the liquid waste containment bund and wash bays by 5.00pm on 17 January 2012;
2. Isolate the stormwater retention pit by 5.00pm on 17 January 2012;
3. Provide receipts to EPA demonstrating liquid waste removed from the Premises was taken to a facility that can lawfully receive that waste by 5.00pm 18 January 2012; and
4. At a time to be determined remove all waste contained within the 4 x 45,000L and 1 x 20,000L tanks by a waste removal company to a facility that can lawfully receive that waste."
In response to that oral notice, Mr Osman-Kerim is recorded as stating that he would comply with Directions 1, 2 and 3 but was not in a financial position to comply with Direction 4.
At that time, all electric power to the Premises had been cut off by the fire officers who had attended to extinguish the office fire. As it happened, that power had not been restored to the Premises when, as will shortly be recorded, there was a second fire at the Premises. Pumps used to transfer waste to the above ground storage tanks as well as pumps used to transfer liquid waste between tanks could not be operated in the absence of power to the Premises.
That oral notice was followed up the following day when the prosecutor issued clean-up Notice no 1503772 directed to the Company (being the 17 January Notice). The decision to issue that Notice was made by Jacqueline Ingham, whose position was as Unit Head of Waste Operations within the office of the prosecutor. Ms Ingham issued the Notice based upon the advice that she had received from Mr Bourne. The Notice recorded the fact that a fire had occurred at the Premises; that the fire had been contained but that liquid waste had entered wash bays; that liquid waste had entered the bunded area provided for the waste water treatment system and above ground waste storage tanks; and that the bunding was "inadequate for the volumes of waste stored in the above ground tanks". Among the directions included in that Notice was Direction No. 3 requiring that the following clean-up action be taken:
3. Immediately engage a suitably qualified expert to isolate the stormwater retention tank so that any liquid waste spilt at the Premises does [sic] not leave the Premises by 5.00pm Tuesday 17 January 2012" (Original emphasis).
Once the 17 January Notice had been prepared, Mr Bourne, together with Andrew Reece, an authorised officer of the prosecutor, attended the Premises and there served the Notice upon Mr Osman-Kerim. At that time Sandra Kemp, the Company's Operations Manager was at the Premises. Mr Bourne and Mr Reece explained to Mr Osman-Kerim and Ms Kemp what the clean-up notice required the Company to do. Each direction given in the notice was explained to Mr Osman-Kerim and Ms Kemp.
Following their inspection of the Premises that day, Mr Bourne and Mr Reece inspected the Lisbon Engineering site. They there observed liquid waste on the ground between the Lisbon Engineering building and the factory on the Premises. They also observed that in the northern end of the Lisbon Engineering building the same solvent smelling liquid waste covered approximately 6m² of the floor. As a result of those observations, Mr Bourne telephoned Mr Osman-Kerim, issuing a further clean-up direction requiring that he make immediate arrangements to remove liquid waste from the Lisbon Engineering site.
On 19 January 2012, the Prosecutor issued a variation of the 17 January Notice. The purpose of that variation was to add the requirement to clean up the liquid waste that had spilt onto the Lisbon Engineering land and building. Condition 3 of the 17 January Notice was not varied. Later that day Mr Bourne spoke with Mr Osman-Kerim by telephone and had a conversation to the following effect:
"IOK: I am on site at the moment. Next door has been cleaned up.
AB: Okay.
IOK: Tomorrow I will get the stormwater retention tank sealed.
AB: Have you removed any liquid waste from the Premises?
IOK: I am not able to yet. I am getting Transpacific to test the liquid waste on the site."
The Premises were again inspected by Mr Bourne on 20 January 2012. Upon inspection, he observed that the SRT had not been isolated so as to prevent the escape of liquid wastes from the Premises. In his subsequent Record of Interview with officers of the prosecutor, Mr Osman-Kerim admitted that he had not complied with the 17 January Notice.
In the early morning of 23 January 2012, there was a second fire at the Premises that caused substantial damage to the factory building. The fire was extinguished by officers of Fire and Rescue NSW. However, "firewater", that is, water used to extinguish the fire, together with liquid waste already on the Premises was mobilised resulting in waste water discharging from the Premises, eventually entering South Creek.
Mr Bourne and Mr Reece visited the Premises that same day. On arrival at the Premises Mr Reece observed what appeared to be contaminated water flowing from the SRT via a culvert adjacent to the Premises into the unnamed watercourse that ran through the golf course. The SRT had not been isolated and in an endeavour to stem the flow of water from the SRT, a traffic cone or "witches hat" was inserted into the pipe through which the SRT drained. This appeared to stop the flow of liquid from the SRT as the pressure of water behind the cone forced its narrow end into the outlet pipe and maintained it in that position.
Mr Reece observed that prior to inserting the traffic cone into the SRT grey coloured water was flowing from the SRT into the external drainage channel. After the traffic cone was installed he also observed that apparently contaminated liquid was flowing out of the north-eastern door of the factory building but not all of that flow was being captured by the central stormwater drains. As a consequence, booms brought to the site by the HAZMAT crew of Fire and Rescue NSW were used in an attempt to divert the escaping liquid to the SRT.
A number of further steps were taken by Mr Reece during the morning of 23 January. He discovered that contaminated water was leaving the Premises via a stormwater drain that also discharged directly into the watercourse running across the golf course and into South Creek. He arranged for the drainage line to be blocked, ultimately using some sand bagging brought to the site so that the pooled liquid could then be pumped out. He also arranged for a contractor to attend the Premises for the purpose of pumping out the liquid then being retained in the SRT as a result of the outlet drain blockage that he had achieved by inserting the witches hat.
Mr Bourne arrived at the Premises on 23 January, after Mr Reece. Upon his arrival, Mr Bourne observed the measures that had been taken by Mr Reece both to divert liquid waste into the SRT and to prevent water flowing from it. Mr Bourne observed that the liquid waste in the SRT was black to charcoal in colour, had a strong solvent smell and was foaming. Upon inspection of the watercourse to the north of the Premises he also observed liquid waste to be present with the same characteristics. Water samples were collected by him and taken to the Environmental Forensic and Analytical Science Section of the Office of Environment and Heritage (OEH) for analysis.
As a result of the fire that occurred on 23 January 2012, a number of State government and local government agencies were present on the site. Actions then taken by those other agencies included:
1. (assistance by staff of Penrith City Council in undertaking temporary works to divert and contain contaminated firewater and liquid waste to the SRT;
2. engagement of contractors to contain and remove liquid waste both from the SRT and from the watercourse into which contaminated liquid had flowed;
3. collecting liquid waste samples from both the Premises and along the unnamed watercourse; and
4. action by staff of the Department of Primary Industries and its Office of Hawkesbury Nepean, notifying all licensed and riparian users that the pumping of water from South Creek between St Marys and the Hawkesbury River was banned. That ban was not lifted until 3 February 2012.
On the morning of 24 January 2012 Mr Bourne telephoned Mr Osman-Kerim and gave verbal directions for action to be taken in relation to the Premises, including a requirement to isolate the SRT and to maintain the level of liquid waste in the SRT to below 30% of its maximum capacity. During the course of that day clean-up notice no 1503916 directed to the Company (the 24 January Notice) was issued by the prosecutor. The Notice recited the background events leading to its issue, including the fire on 23 January 2012; the leaking of liquid waste from the Premises onto adjoining premises and into the watercourse leading to South Creek; the temporary measures taken to divert liquid waste draining from the damaged building into the SRT; the fact that EPA officers "reasonably suspected that a pollution incident had occurred, was occurring and is likely to occur, due to the spill of liquid waste at the Premises"; the compromised integrity of the above ground tanks and the verbal clean-up directions given earlier that day. The Notice then directed that the following clean-up action be taken:
"1. Immediately engage a suitably qualified expert to isolate the stormwater detention tank so that any liquid waste spilt at the Premises does not leave the Premises by 5.00pm 24 January 2012;
2. Immediately direct all runoff from the fire damaged building at the Premises to the stormwater retention tank so that any liquid wastes do not leave the Premises by 5.00pm 24 January 2012;
3a Immediately monitor and maintain an appropriate level of liquid waste in the stormwater retention tank and the adjacent stormwater pit ensuring the retention tank does not fill in excess of 30% of their capacity;
3b The liquid waste contained within the stormwater retention tank and the adjacent stormwater pit is to be appropriately classified and removed by a suitably qualified and experienced chemical spill clean-up company;
3c The liquid waste is to be transported to or disposed of at a facility that can lawfully receive that type of waste;
4. Within one week of access being granted to the fire damaged building, all liquid waste contained within the 4 x 45,000L and 1 x 20,000L above ground storage tanks is to be appropriately classified and is to be transported to or disposed of at a facility that can lawfully receive that type of waste; and
5. The licensee must provide receipts or dockets showing the liquid waste removed from the Premises has been transported to or disposed of at a facility that can lawfully receive that type of waste within one week of that waste being transported from the Premises." (Original emphasis)
Later that day Mr Bourne and Mr Reece attended the Premises where they gave the 24 January Notice to Sandra Kemp and explained the directions that were required to be implemented. At that time the SRT was inspected and the traffic cone plugging the outlet was observed to remain in place. As was acknowledged in Exhibit B, the SRT had not been isolated in accordance with the requirement of the 17 January Notice.
At the time of inspection on that day, Mr Bourne observed what he described as "liquid waste/firewater" flowing from the eastern side of the factory building being directed to the SRT by the temporary booms that had been placed on the hard stand area of the Premises the previous day. An underground stormwater pipe leading from the building to below the weir within the SRT was observed to have a dark charcoal liquid flowing from it into the SRT. According to the report of Mr Bourne prepared following that inspection (Exhibit N,Tab 18) liquid wastes were observed at a low level within the SRT so that, at that time, the SRT was able to hold the liquid wastes flowing to it. However, contaminated waste water that was not captured by the stormwater drainage system leading into the SRT was being captured by a drainage line running north/south along the eastern boundary of the Premises.
The Premises were again visited by Mr Reece on 25 January 2012. Once again, it was observed that the SRT had not been isolated by any measure taken by or on behalf of the Company. The traffic cone remained in place. It was raining at the time of his visit. Mr Reece estimated that the SRT was approximately 40 percent full with waste water from the factory building seen to be entering the SRT. While Mr Reece understood the capacity of the SRT to be 200,000L, given the catchment for contaminated water running to it, he formed the opinion that the SRT would overflow if it was not pumped out and the rain continued to fall as it was.
Samples of water were taken from the SRT and also from a stormwater drain in the northern corner of the Premises. These samples were taken for analysis that subsequently showed that water taken from the SRT had a pH of 10-11 while stormwater in the drain in the northern corner of the Premises had a pH of 6-7.
On 27 January 2012 Ms Ingham, on behalf of the prosecutor, engaged Michael Sidaros of Dr H2O Pty Ltd, a plumbing and maintenance contractor, to undertake work at the Premises, including the sealing of the SRT. On that same day, Ms Ingham also made contact with Transpacific, the liquid and hazardous waste division of Transport Waste Services, requesting that a tanker be provided to remove liquid waste from the SRT at the Premises.
The Premises were attended by Mr Bourne on 27 January in company with Deanne Thomas, Christine Mitchell and Michael Celona, officers of the prosecutor, together with Brad Lynch and Shane Barter from the Office of Hawkesbury Nepean. Mr Bourne inspected the SRT and observed that it had not been isolated in accordance with the 17 January Notice. He also observed that the SRT was approximately half full of liquid waste. Together with Ms Mitchell, Mr Bourne collected liquid samples from locations within the Premises while Mr Lynch and Mr Barter left the Premises to collect water samples from local water courses.
Mr Bourne also observed that liquid waste/firewater was flowing from the north-eastern side of the building on the Premises with the temporary booms that had been put in place on 23 June appearing to direct that waste water into the SRT. Stormwater drains carrying this waste water were observed to be carrying foam. Other waste water discharging from the building on the Premises that was not being captured by the stormwater drainage system leading to the SRT was also being retained by the temporary measures put in place on 23 January, although the level of water damned by this measure had reached the level of the curb at the boundary of the Premises. A stormwater culvert adjacent to the Premises showed signs of impact by the waste water that had flowed from the Premises, as a boom previously in place across the culvert had been washed out of position. Foam was being generated at this point from an auxiliary stormwater drain entering the culvert causing the liquid waste to be aerated.
After making these observations, Mr Bourne and Ms Thomas left the Premises to traverse the unnamed watercourse running across the golf course. Mr Bourne noted that the flow of water in the watercourse was higher than that observed on 23 January and that while no odour was detected, foam was visible on the flowing water. He then travelled to the confluence of the watercourse with South Creek. At that point, water in the watercourse falls several metres over a series of small cascading waterfalls into South Creek. A large volume of foam was noted to be present at this point with foam also present on surrounding tree trunks, causing Mr Bourne to form the opinion that the foam had been up to two metres above the creek level. Upon walking approximately 25m downstream from this point, Mr Bourne observed that there was a high flow of water in South Creek with a water level approximately 1m above the levels he had observed on 23 January. At this point, the water in South Creek was observed to be brown in colour with foam floating on top. Water samples were taken.
Mr Bourne and Ms Thomas then walked upstream from the confluence where the water appeared to be brown in colour but no foam was present. The high flow and increased water levels at this point was such that samples could not be taken, although on walking approximately 15m further upstream a location was identified at which water samples were able to be taken. The water at this point was observed to be brown in colour, but no foam was present.
Further observations and water sampling were undertaken by Mr Bourne and Ms Thomas further downstream in South Creek. They then returned to the Premises, collected all water samples taken that day by those in attendance and conveyed those to the prosecutor's Lidcombe laboratory. Prior to leaving the premises on 27 January, Ms Mitchell observed a tanker from Transpacific remove liquid waste from the Premises.
On 30 January 2012, Jacqueline Ingham spoke to Michael Sidaros of Dr H2O in relation to the quote that he had given for works to be undertaken at the Premises. Mr Sidaros was authorised to proceed with that work which included sealing of the SRT.
Mr Bourne again visited the Premises on 30 January 2012. He observed that liquid waste was continuing to flow from the north-eastern side of the building at the Premises. He also observed liquid waste within the SRT.
While Mr Bourne was at the Premises during the morning of that day, two liquid waste tankers from Transpacific arrived at the Premises. This occurred at the request of Ms Ingham on behalf of the prosecutor. The driver of the Transpacific truck was instructed by Mr Bourne to remove liquid waste from a stormwater pit located in the north-eastern corner of the Premises as well as from the SRT. Upon arrival of a second truck, the driver was instructed by Mr Bourne to complete removing liquid from the SRT and also to remove liquid waste from the ground surfaces, stormwater system and a small stormwater retention tank at the eastern boundary of the adjoining premises of Lisbon Engineering. An inspection of those premises by Mr Bourne on that day revealed that liquid waste had flowed from the Premises onto the factory floor, yard and stormwater system of the Lisbon Engineering premises. Later in the day Mr Bourne met Michael Sidaros of Dr H2O at the site and observed him seal the SRT.
On 7 February 2012, Mr Bourne and Mr Reece attended the Premises. They inspected the SRT and noted that the liquid draining into it appeared to be a black viscous substance. The depth of liquid waste within the SRT was also measured at 60cm from the top, above an internal weir, and 90cm from the top below the internal weir. Mr Bourne and Mr Reece also inspected the stormwater culvert adjacent to the Premises. This culvert was carrying water that was dark green in colour. Following his inspection, Mr Bourne dialled the telephone number of the Company and also the mobile telephone number that he had for Mr Osman-Kerim. Neither phone call was answered but Mr Bourne left a voice mail message requesting that his call be returned. Shortly after leaving that message he received a telephone call from Sandra Kemp. Mr Bourne informed Ms Kemp of his observations at the Premises, stating that the Company was required to comply with the 24 January Notice, in particular that it was to maintain the liquid waste contained within the SRT below 30 percent of its capacity. Mr Bourne records Ms Kemp's response as being, "We will comply with the conditions of the Notice."
During the morning of 14 February, Mr Bourne again dialled the telephone number for the Company and the mobile telephone number of Mr Osman-Kerim. Neither telephone was answered and a voice mail message was left requesting that the call be returned. Approximately one hour later Mr Bourne received a telephone call from Ms Kemp. He related the observations that he had last made of the levels of liquid in the SRT, the catchment area of the Premises and the rainfall forecast he had obtained from the Bureau of Meteorology. In the circumstances he stated that the SRT was likely to fill and needed to be pumped out, as if an overflow occurs it may constitute an offence against s 116 of the Act. Ms Kemp is recorded as responding:
"Okay I will call Eddie and advise him of what you have told me. Can you please advise our solicitor Jamie on 9231 3433."
Following that conversation, Mr Bourne spoke with James Vernon who he understood to be "Jamie" referred to by Ms Kemp. Mr Vernon was a solicitor in the solicitor's firm of Benjamin & Khoury. Mr Bourne told Mr Vernon of the content of his conversation with Ms Kemp, directed him to the EPA public register in which copies of the suspension notice and the clean-up notices could be viewed. He also advised Mr Vernon of "the current environmental issues" involving the Premises and of Mr Osman-Kerim's commitment to comply with the Notices.
Later that morning Mr Bourne received a telephone call from Ms Kemp in which she stated words to the effect:
"Eddie will arrange the pump out of liquid waste from the site by Solveco."
In response to a question from Mr Bourne, Ms Kemp stated that the pump out would occur that day.
Shortly after that telephone conversation with Ms Kemp, Mr Bourne received a telephone call from Mr Osman-Kerim. In that conversation Mr Osman-Kerim stated that the water in the SRT was "just water from the rain". Mr Bourne responded by stating that it was rainwater mixed with contaminants from the Premises to which Mr Osman-Kerim responded by saying "okay".
During the morning of 15 February 2012 Mr Bourne again was unsuccessful in making telephone contact either with the Company or with Mr Osman-Kerim. A voice mail message was left on each telephone requesting that his call be returned. Shortly thereafter Mr Osman-Kerim telephoned Mr Bourne when a conversation to the following effect occurred:
"IOK: I went out to the site and looked at the stormwater retention tank. I will get Remondis to come and pump it out tomorrow. It should be okay, the stormwater retention tank is nearly full.
AB: How much liquid waste is in the stormwater retention rank?
IOK: Probably 20,000 to 25,000L in the tank. Remondis will empty it completely. I will fax or email you the receipts and dockets tomorrow.
AB: Have you got access to the Premises?
IOK: Yes, I have the keys to the front gate. I will be moving the Chep pallets today."
In the early afternoon of 15 February, Andrew Reece returned to the Premises. At the time of his inspection he noted that the SRT was 90 percent full, with very little capacity to store any more waste water or site run off. In the course of that inspection, Mr Reece also discovered an 8,000 litre above ground water tank on the Premises that was full of liquid. The liquid had a green fluorescent colour. Mr Reece had added green fluorescence to the SRT during a previous inspection so that any leakage or discharge from it could be determined.
Mr Reece again went to the Premises on 16 February. During the course of the morning he observed the arrival of a tanker truck from Remondis. Mr Osman-Kerim arrived at the Premises shortly thereafter and directed the driver of the Remondis truck to commence pumping water from the SRT. Once pumping commenced Mr Reece had a conversation with Mr Osman-Kerim to the following effect:
"IOK: Its clean water just block the pipes and let it go into the creek.
AR: Eddie, it's not clean water. All the water going into the tank is from the factory where all the waste from the waste tanks has leaked. If you block the pipes and let it drain into the creek that is intentional environmental harm and that is a Tier 1 offence that carries a custodial sentence.
IOK: This is bullshit. It is costing me too much money to keep pumping out the tank, its clean water.
AR: Eddie, you are responsible for the Premises and all the waste on it. EPA has issued you a Clean-Up Notice that requires you to keep the tank below 30 percent so that if it rains and more waste comes out of the factory it does not pollute the creek."
After the Remondis truck left the Premises, Mr Reece observed that the SRT was still about 80 percent of its capacity. He informed Mr Osman-Kerim that more trucks were required to reduce the volume of waste in the SRT to 30 percent in order to comply with the 24 January Notice.
Mr Reece returned to the Premises at about 7.30am on 20 February 2012. Heavy rain had fallen overnight and the purpose of the visit was to check water levels in the SRT. Upon inspection, Mr Reece observed that the SRT was "filled to capacity" with water apparently contaminated by chemicals that were washed from the fire damaged factory building. He formed the opinion that any further rain would cause the SRT to overflow into the watercourse and ultimately into South Creek. Mr Reece reported his observations to Mr Bourne.
During the morning of 20 February Mr Bourne made several unsuccessful attempts to contact the Company and Mr Osman-Kerim by telephone. Eventually, he spoke to Sandra Kemp and had a conversation to the following effect:
"SK: We organised two truckloads of liquid waste to be transported from the Premises on Thursday (16 February).
AB: An EPA authorised officer inspected the stormwater retention pit at the Premises this morning. The SRT is now full and an overflow of the liquid waste into South Creek is imminent if it isn't overflowing already.
SK: The Remondis driver said levels would be compliant with the clean-up notice and Eddie checked the levels last week.
AB: How can a 20,000L liquid waste tanker reduce a full 200,000L stormwater retention tank to below 30%? How did Eddie measure the levels of liquid waste in the tank to ensure compliance with the clean-up notice?
SK: I don't know.
AB: The stormwater retention tank is currently full and potentially overflowing. Sydney Drum Machinery must get liquid waste removable tankers to suck the liquid waste out of the stormwater retention tank as soon as possible.
SK: I will let Eddie know.
AB: Should Sydney Drum Machinery fail to comply with the clean-up notice EPA may have to organise the works and issue a costs compliance notice to recover the costs.
SK: Okay."
Mr Reece returned to the Premises shortly after 9.30am on 21 February 2012. The prosecutor had been advised by Mr Osman-Kerim that he had arranged for tankers to attend during the course of the morning so as to remove waste water that had filled the SRT. Upon arrival, the gate to the Premises was locked and no one was present. Mr Reece unlocked the gate with a key that he had and went immediately to the SRT where he observed that water had overflowed from the SRT into the watercourse leading to South Creek. After waiting for about one hour Mr Reece left the Premises as no one on behalf of the Company nor any waste tankers had come to the Premises since his arrival. He later returned with water sampling equipment and took samples of water in both the SRT and the watercourse leading to South Creek. He observed that the water in the SRT was very dark in colour and had a very strong odour.
The water samples collected that day were then taken by Mr Reece to the laboratory for analysis. He also contacted Mr Bourne with the request that water tankers be engaged to pump out some of the liquid from the SRT.
After attempting to contact the Company and Mr Osman-Kerim by telephone and leaving voice mail messages requesting that his call be returned, Mr Bourne eventually spoke to Ms Kemp early in the afternoon of 21 February. They had a conversation to the following effect:
"AB: Remondis are not pumping any liquid waste from the stormwater retention tank at the Premises.
SK: The solicitor is writing a letter to EPA regarding the costs of pumping out the liquid waste.
AB: There is a pollution event occurring now. Have trucks to remove liquid from the stormwater retention tank at the Premises been ordered?
SK: I don't think so. The solicitor is writing a letter to EPA regarding the costs of pumping out the liquid waste.
AB: That is not a lawful excuse or defence for failure to comply with the Clean-Up Notice issued on 24 January.
SK: I will let Eddie know.
AB: Note that the spilling of stormwater retention tank [sic] could be considered a Tier 1 offence under section 116 of the Protection of the Environment Operations Act 1997 and has a maximum penalty of $5,000,000 for wilfully causing or contributing to the offence plus there are the cost compliance costs [sic] to consider.
SK: Okay."
A short time later Ms Kemp called Mr Bourne, stating that four Remondis liquid waste removal trucks would be onsite "first thing in the morning". Later in the afternoon of 21 February 2012, Mr Bourne had a telephone conversation with Mr Osman-Kerim. Mr Osman-Kerim stated that at 8.00am the following day Remondis would be taking water from the Premises "to stop the tank from overflowing". When asked how many tankers would be used Mr Osman-Kerim responded by stating that there would be "a few tankers".
Mr Bourne visited the Premises on 22 February 2012. He there observed that liquid waste was continuing to flow from the eastern side of the factory building on the Premises. He also observed that liquid in the SRT was "black and odorous". It was at a level that was only 35cm from the top of that tank, far exceeding the 30 percent capacity that was the subject of the 24 January Notice. That same day Mr Bourne caused a reminder letter to be sent by the prosecutor to the Company, reminding it of the requirements imposed by the January 24 Notice, and stating that the failure to comply could involve "further regulatory action" of the kind indicated in the letter and noting that an obligation to comply remained operative even if the stipulated date for compliance had passed.
On the morning of 28 February 2012, Mr Bourne learned from the website of the Bureau of Meteorology that significant rain was forecast for the ensuing three days. He attempted to call Mr Osman-Kerim on his mobile telephone but when that call was unanswered he left a voice mail message stating that 65mm of rainfall was predicted over the next three days which would cause the SRT to overflow unless it was pumped out. Mr Bourne requested that Mr Osman-Kerim return his call.
Mr Bourne next telephoned the landline for the Company and spoke to Ms Kemp. After stating that calls had been made to the mobile telephone number for Mr Osman-Kerim but messages were not being returned, Mr Bourne warned of the likely rainfall over the ensuing days and requested that the Company organise to have the SRT pumped out as soon as possible. Ms Kemp indicated that she would "let Eddie know". A little later Mr Bourne telephoned Mr Vernon, the solicitor from Benjamin & Khoury, solicitors, who had written to the prosecutor confirming that the firm represented the Company. Mr Bourne repeated his concern about the impact of further heavy rain over the ensuing days with a request that the EPA be advised of the actions proposed by the Company. The prospect that the prosecutor would take "further regulatory action" should no response be received was also stated. Mr Vernon is recorded as responding by saying "okay".
As no response was received either from Mr Osman-Kerim, Ms Kemp or Mr Vernon, Mr Bourne again attempted to speak to Mr Osman-Kerim on his mobile telephone. The call was not answered but a voice mail message was left on that phone stating that the prosecutor would take action to pump some of the liquid waste from the SRT to prevent a pollution incident and that it would seek recovery of the costs associated with that action from the Company. A further telephone call to the landline telephone number of the Company was unsuccessful.
As a consequence, Mr Bourne again telephoned Mr Vernon. After stating that a breach of s 120 of the Act was occurring at the Premises because of the potential for a pollution incident to occur and that the Company was in breach of the January 24 Notice, Mr Bourne stated that because of the potential for significant risk of environmental harm, the prosecutor would engage two liquid waste removal tankers to remove some of the liquid waste from the SRT and was likely to seek recovery of the costs incurred in so doing. Mr Bourne indicated that he was contacting Mr Vernon because his telephone calls and messages to the Company had not been returned.
Both during the morning and afternoon of 29 February 2012, Mr Bourne telephoned Mr Osman-Kerim on his mobile telephone as well as the Company on its landline. Until about 5.00pm in the afternoon those telephone calls had not been returned, although messages had been left requesting information from the Company as to its intention to remove the liquid waste accumulating in the SRT. Shortly after 5.00pm, Mr Bourne was successful in speaking with Ms Kemp by telephone. During that conversation he asserted that the Company had failed to comply with its obligations in relation to the level of liquid waste in the SRT and requested to know what the Company was intending to do, indicating that the removal of two tanker loads of liquid waste from the SRT had been arranged by the prosecutor but that the SRT would require further "pumping out". Ms Kemp advised that she would so inform Mr Osman-Kerim.
Mr Bourne and Mr Reece had attended the Premises earlier in the afternoon of 29 February. They had supervised the extraction of liquid waste from the SRT by the liquid waste removal tankers engaged for that purpose by the prosecutor. Before the extraction of liquid waste commenced, Mr Bourne observed that the level of waste within the SRT was 32cm from the top. That waste is described as having a strong solvent odour. An onsite measurement of a sample indicated the liquid to have a pH of 9. That waste liquid was observed to foam during the extraction process. Upon completion of that process by two tankers, the surface of the liquid waste in the SRT was 59cm from the top. The total volume of liquid removed by the two tankers was 41,700L.
Upon arrival at the Premises that day, Mr Bourne noted that the access driveway gate was closed and locked with a sign on the gate stating:
"For access contact Better Drums on xxxxxxxxx Eddie Osman Email www.betterdrums.com.au".
The mobile telephone number was that called by Mr Bourne in endeavouring to make contact with Mr Osman-Kerim.
At about 5.30pm in the afternoon of 29 February, Mr Bourne spoke by telephone with Mr Osman-Kerim and had a conversation to the following effect:
"IOK: I called Ramondis but they won't work for me because they have not been paid for the past four loads.
AB: The stormwater retention tank is near full and rainfall is predicted. To avoid the stormwater retention tank overflowing with liquid waste it will need to be pumped out before this Friday (2 March 2012).
IOK: I will get back to you tomorrow.
AB: Does Sydney Drum Machinery intend to maintain the Premises and levels of liquid waste contained within the stormwater retention tank?
IOK: Yes, I spoke to the plumber who has a solution.
AB: Okay. Note that black ooze is coming through underground stormwater pipe leading from the factory into the stormwater retention tank.
IOK: That's impossible.
AB: It is the case. I have photographs to prove it.
IOK: My lawyer says it is the landowners and insurance company's responsibility.
AB: Okay, [the 24 January Notice] is issued to Sydney Drum Machinery and based on the information provided to EPA to date, EPA will seek to recover the costs of the continual maintenance of the level of liquid waste within the stormwater retention tank from Sydney Drum Machinery.
IOK: Okay."
After several unsuccessful attempts to speak with Mr Osman-Kerim by telephone on 1 March 2012, Mr Bourne did speak with Ms Kemp who stated that Mr Osman-Kerim would return the call. When telephone contact was finally made with Mr Osman-Kerim later that day, Mr Bourne records a telephone discussion to the following effect:
"IOK: Things are okay onsite. The stormwater retention tank is three quarters full.
AB: The weather forecast is that it will rain over the next few days and that will make the stormwater retention tank overflow.
IOK: Ramondis won't work for me. Dieb Khoury said to call him. I'll make some calls to get more liquid pumped out.
AB: [the 24 January Notice] requires liquid waste contained within the stormwater retention tank to be maintained below 30% of the capacity of the tank. Now you are saying the tank is 75% full. You must get the tank pumped tomorrow at the latest.
IOK: Talk to my lawyer.
AB: Okay."
Shortly thereafter Mr Bourne had a telephone conversation with Mr Dieb Khoury. Mr Bourne indicated that he was calling concerning both the Suspension Notice and 24 January Notice issued to the Company. Mr Bourne states that a conversation to the following effect then took place:
"DK: Eddie doesn't have a problem with compliance with the notices except he is unable to pay. He put in a claim for advance from the insurance company and was in a conference with them all day yesterday. Eddie says there is only water in the tanks onsite.
AB: The EPA has laboratory results that demonstrate otherwise.
DK: My client is not disputing the EPA's claims but can't pay.
AB: Can you confirm Imad (Eddie) Osman-Kerim does not dispute the lawfulness of the EPA notices but is not in a financial position to comply.
DK: Yes. There has been a breakthrough with the Landlord. Quotes are being gathered.
AB: The material in the stormwater retention tank is toxic. It has a pH of 9. There are water users downstream of South Creek that use the water for irrigation. Letting the material in the stormwater retention tank go into the creek is not an acceptable option.
DK: Okay."
Later that day the prosecutor wrote to Mr Osman-Kerim and the Company what is described as a "show cause" letter. Reference is made in that letter both to the conditions attaching to the notice suspending the EPL as well as the directions contained in the 24 January Notice. Reference is also made to the letter of 21 February 2012, reminding the Company of its obligations under the Notices to which reference is made and to the fact that a number of inspections of the Premises reveal that liquid waste in the SRT was "well above 30 percent of its capacity". After stating that the prosecutor was investigating further action, the letter indicated:
"Prior to taking any regulatory action in relation to the apparent breaches of the POEO Act, the EPA invites the Licensee to forward any submission it may wish to make in relation to the matter including, but not limited to, any defence or matter in mitigation the Licensee wishes the EPA to consider."
The letter also stated that any submission the Company wished to make was required to be submitted in writing by 5.00pm on 8 March 2012. No response to that letter is recorded as having been received by the prosecutor by the stipulated deadline.
Mr Bourne attended the Premises on 2 March, essentially for the purpose of supervising removal of liquid waste from the SRT by six liquid waste removal trucks, whose attendance had been arranged by the prosecutor. This had occurred because of the rainfall that occurred and the rainfall predicted for the ensuing days. Upon arrival Mr Bourne observed that the SRT was full and overflowing into a stormwater pit that, in turn, drained to the unnamed watercourse. The liquid waste was foaming in the stormwater pit and a strong solvent odour was experienced by him both at the SRT and in the north-eastern section of the Premises. He also observed that liquid within the unnamed watercourse was foaming. Water samples were taken.
Throughout the day, the six liquid waste removal trucks came to the Premises and removed liquid waste from the SRT. After the last of those trucks had left, Mr Bourne measured the level of waste water in the SRT to be 80cm from the top. That level meant that the remaining water exceeded 30 percent of the SRT's maximum capacity. Before departing the Premises, Mr Bourne observed that black liquid waste continued to drain into the SRT from a stormwater pipe leading from the factory building on the Premises. The absence of a roof on the building meant that rain falling on the factory floor was draining directly to the SRT.
After leaving telephone messages to call, Mr Bourne received a telephone call from Mr Osman-Kerim during the morning of 2 March. Mr Bourne advised Mr Osman-Kerim that the SRT was overflowing and enquired as to what he was going to do "to fix the current pollution incident". He responded by stating that he would "get a sucker truck to tanker liquid off site".
On 5 March 2012 Mr Bourne held a meeting with Mr Osman-Kerim at which John Machiani of the firm Environmental Services Pollution Control, and Michael Sidaros of Dr H2O Plumbing were present. Mr Sidaros and Mr Machiani had been engaged by the Company to assist it. In the course of that meeting, the following exchange took place between Mr Bourne and Mr Osman-Kerim:
"AB: Can you advise if you are capable of maintaining the Premises and complying with the Notices?
IOK: I'll try my best.
AB: But are you capable?
IOK: I'll try my best.
AB: EPA is getting mixed messages. You say you will try to comply with the Notices and yet the Premises has not been maintained and Dieb Khoury of Benjamin & Khoury Attorneys & Solicitors who represent you states that you do not have the funds. Have you tried to raise funds?
IOK: Yes, but I haven't been able to.
AB: EPA requests some evidence of the inability to comply for financial reasons. For example creditors statements, bank statements or accountant statements of assets owned.
IOK: Okay.
AB: If there is non-compliance with the Notices and no maintenance occurs, EPA will consider an injunction in Court requiring compliance. Do you understand that?
IOK: Yes."
There is no evidence of any financial information relating to the Company having been provided to the prosecutor following that conversation.
On the morning of 6 March 2012 Mr Bourne telephoned Mr Osman-Kerim, advising that forecast rainfall was for 25mm on 7 March and 50mm on 8 March. He stated that by his calculation the SRT would overflow on 7 March and a pump out of the SRT would be required "by no later than tomorrow morning". Mr Osman-Kerim responded by stating that he would organise the tank to be pumped out. He was requested by Mr Bourne to confirm by 12.00pm that day that arrangements had been made for the pump out to occur. In the early afternoon, Mr Osman-Kerim advised by telephone that three trucks from Toxfree had been organised "to pump liquid waste from the stormwater retention tank between 8.00am and 9.00am". Mr Osman-Kerim was requested to forward by facsimile a copy of "the paperwork" confirming that arrangement. Later in the afternoon when Mr Bourne informed Mr Osman-Kerim that no "paperwork" had been received, the former stated that pump-out works were "confirmed for tomorrow at 9.00am".
Mr Bourne and Mr Reece inspected the Premises on 7 March 2012. Mr Bourne observed that the stormwater diversion system that had been put in place on the premises as a temporary measure was damaged and so was not acting to divert all water to the SRT. When the SRT was inspected the water level was only 20cm from the top.
Mr Osman-Kerim was at the Premises on 7 March as was Ms Kemp. A conversation to the following effect then ensued between Mr Reece and Mr Osman-Kerim:
"AR: Eddie, you are not complying with the clean-up notice and this contaminated water is overflowing from the pit and into the creek.
IOK: It's clean water, nothing wrong with it.
AR: You and I both know it is not clean water so stop saying it is clean.
IOK: What do you want me to do?
AR: We have been through this Eddie. It is not clean, it is contaminated with chemicals and crap that came from all of the drums you washed out inside. If you had of [sic] emptied all of the storage tanks inside the factory like you were supposed to you would not need to keep pumping the contaminated water from the pit. All of the crap from in there is now washing into the pit.
IOK: I am trying to get more tankers here but they will not work for me.
AR: You need to pay them Eddie, the reason they are not coming back is that you have not paid any of the companies that have done work for you.
IOK: I am not going to pay them until they do the work, this is bullshit, you don't pay people before they do the work.
AR: The companies would talk to each other Eddie. As you have not paid for the loads that have been removed people will not do any work for you.
IOK: I will organise some tankers."
Mr Bourne and Mr Reece returned to the Premises on 8 March 2012. Present at the time of their arrival was Mr Sidaros of Dr H2O, who had been engaged by the Company to undertake remedial work. Mr Sidaros indicated that at the request of Mr Osman-Kerim he had entered the fire damaged factory building, discovered that the north-western above ground storage tank was leaking due to a melted ball valve and that he had capped that valve. He also stated that he was proposing to fill a 10,000 litre above ground storage tank with liquid waste from the SRT, that storage tank having been fixed to a truck operated by Better Drums.
Mr Bourne observed at the time that liquid waste was flowing from the north-eastern roller door of the factory building into the stormwater drain running to the SRT. The stormwater access point adjacent to that roller door was observed to have a black odorous liquid flowing through it. At that time the SRT was full of liquid waste and was overflowing. The stormwater culvert leading from the Premises to the unnamed watercourse north-east of the Premises was foaming.
Mr Bourne also observed on that occasion that some work appeared to have been undertaken inside the factory building in addition to the repair that Mr Sidaros had urgently made to the leaking valve on the above ground storage tank. In particular, he observed that a channel had been cut into the concrete within the kitchen area of the building having the effect of diverting liquid waste from within the building to the sewage system servicing the site.
As a result of the information provided to her by Mr Bourne, Ms Ingham arranged for two tankers to attend the Premises on 9 March for the purpose of removing liquid waste. As a result of that arrangement, Mr Reece attended the Premises on 9 March 2012.
By the time Mr Reece arrived at the Premises, the driver of the Transpacific tanker had already removed one load of liquid waste from the SRT. Upon returning to the site, the driver of that vehicle was requested by Mr Reece to remove liquid waste from a rainwater tank that had been filled with contaminated waste water from the SRT by a plumber engaged by Mr Osman-Kerim. That tank, itself, appeared to be leaking. When pumped out, the content of liquid waste in that tank was approximately 8,000L. Once that task was completed, Mr Reece directed the tanker driver to remove liquid waste from the tank that had been mounted on the Better Drums' truck and filled with liquid waste from the SRT. When that tank had been pumped out, the remaining capacity of the tanker truck was used to receive waste from the SRT. Upon completion of that process the level of waste liquid in the SRT was approximately 20cm from the top.
On that same day, Mr Bourne received from Benjamin & Khoury a letter indicating that it was a response to the prosecutors show cause letter of 1 March. The letter stated that instructions from the client were awaited but an invoice from Ramondis for the removal of liquid waste from the Premises on 22 February was enclosed. The only other letter from Benjamin & Khoury that the prosecutor received, potentially relevant to the "show cause" letter, was a request that the prosecutor provide chemical analysis of samples taken from the site. That analysis was later provided to Mr Osman-Kerim.
On 14 March 2012, the prosecutor received a letter from Benjamin & Khoury, acting on behalf of the Company, enclosing invoices sent to the Company by Remondis for the removal of 22,220L of liquid waste on 22 February 2012 and 40,000L of liquid waste on 7 March 2012. Mr Bourne had been at the Premises on 22 February. At that time he observed liquid waste within the SRT to be 35cm from the top of the tank and given both the capacity of the tank and its depth, he expressed the opinion that the removal of 22,220L from the tank on that day would not reduce the volume of liquid waste that remained to a figure that was below 30 percent of its maximum capacity.
Mr Bourne also inspected the Premises on 7 March when he observed the SRT to be 90 percent full of liquid waste. Given the maximum capacity of 200,000L, a reduction of 40,000 would not have resulted in the remaining volume of waste in the SRT to be below 30 percent of maximum capacity.
In the early afternoon of 19 March 2012, Ms Ingham left messages both with the Company and Mr Osman-Kerim, requesting that she be contacted concerning the SRT as it appeared likely to overflow. As forecasts from the Bureau of Meteorology had stated would be the case, rain had fallen in the area from 16 to 19 March.
Concerned that no immediate action would be taken by the Company to empty the SRT and given the rain that had fallen as predicted, Ms Ingham arranged for two tankers from Transpacific to attend the Premises the following day.
Ms Ingham attended the Premises on 20 March. She inspected the SRT, observing that the level of liquid in the tank was only 20-30cm from the top and that the liquid had a strong solvent smell. The driver of the tanker sent to the Premises by Transpacific then began pumping liquid from the SRT. Ms Ingham's inspection of the culvert immediately outside the Premises indicated that water in that culvert was running clear so that the SRT did not appear to have been overtopped at that time.
There were occasions during April 2012 upon which the Premises were inspected by officers of the prosecutor, who found the level of liquid waste in the SRT to be almost full or on one occasion to be overflowing. On two occasions, namely on 17 and 19 April 2012 the prosecutor arranged for the removal of liquid waste from the Premises by pumping out liquid from the SRT.
While Mr Julli was cross-examined, two fundamental premises of his evidence were not challenged. Those premises were, first that contaminated liquid which had the same characteristics as the contaminants on the Premises was found in the creeks following the second fire on 23 January and second, that those contaminants were highly toxic.
I accept the evidence of Mr Julli as to the environmental consequences that he posits.
Mr Osman-Kerim gave evidence. In the course of his cross-examination it was put to him that Mr Bourne had said words to the effect "if you have any problems getting access, let me know and I will see what I can do for you". Mr Osman-Kerim's response was "maybe he did say that" (Tcpt 470:8-12).
I am satisfied beyond reasonable doubt that in the period immediately following the fire that occurred on 23 January 2012 when access was denied to the Premises by police officers, officers of Fire and Rescue NSW or those acting on their instructions, access to the Premises, at least to those areas outside the damaged factory building, could be facilitated by contacting Mr Bourne in his capacity as an officer of the prosecutor. I am also satisfied beyond reasonable doubt that during any period of exclusion from areas of the Premises located outside the factory building, Mr Osman-Kerim did not seek to engage Mr Bourne for assistance in gaining access to any part of the Premises, either for himself or for any person on his behalf to carry out the clean-up action that the Company had been directed to undertake.
The evidence that I have recorded discloses a number of occasions upon which the prosecutor itself arranged the removal of waste from the SRT and action to clean up polluted water that escaped from the Premises. The cost of this work was borne by the Environmental Trust, established under the Environmental Trust Act 1998 (NSW). The net cost so incurred was $205,447.90, reduced by the forfeiture of the financial assurance bond in the sum of $75,000 that the Company was required to provide as a condition of the EPL being granted, leaving a net loss to the Trust of $130,447.90. The majority of those costs, itemised in the evidence, related to the sealing and emptying of the SRT. In addition to those costs paid from Environmental Trust funds, laboratory costs of $120,795 were incurred by the prosecutor.
He acknowledged receipt of the 17 January Notice and states that following receipt he contacted Mr Sidaros of Dr H2O, requesting that he "attend the Premises and look at the matters raised in that clean-up notice". He advised Mr Sidaros that immediate attention was required to which Mr Sidaros is said to have responded "I'll be there as soon as I can". Thereafter, he contacted Mr Sidaros "on a few occasions" concerning the work required by the Notice but on each such occasion Mr Sidaros is said to have responded by stating that he would be there "as soon as I can". It will be remembered that the prosecutor retained Mr Sidaros who completed the isolation or sealing of the SRT on 30 January 2012 and charged the prosecutor for so doing.
Mr Osman-Kerim states that between 13 or 14 December 2011, when the faulty sealant of the factory wall was repaired, and 16 January 2012, when the first fire occurred, there was no "emission" of any waste from the Premises. Further, he states that prior to the second fire that occurred on 23 January there was no escape of liquid waste from storage tanks "over the bunding".
Those storage tanks that were being used in the Premises on 16 January were the same storage tanks that had been installed when business commenced at the Premises. Nothing that occurred at the time of the first fire in any way increased or otherwise altered the volume of liquid that was retained at any one time in those storage tanks nor, so it is stated, did that fire interfere with the flow of material from those storage tanks.
Mr Osman-Kerim denied that a photograph exhibited to the affidavit of Mr Bourne sworn 8 January 2013 showed liquid waste within the storage tank area overtopping the bunding. However, Mr Osman-Kerim did not state, in terms, that Mr Bourne was incorrect in stating that upon inspection of the Premises on 16 January the storage tank bund was being overtopped by liquid waste from within the storage tank bund.
Mr Osman-Kerim also denied that a photograph of the area between the factory on the Premises and the factory on the adjoining Lisbon Engineering site said to have been taken by Mr Bourne on 17 January 2012, depicted liquid waste that had flowed from the Premises onto that site. He did not offer any explanation for the liquid apparent in the photograph nor was Mr Bourne cross-examined to suggest that his conclusion as to the source of that liquid was incorrect.
Mr Osman-Kerim acknowledged that the fire on 23 January occasioned extensive damage to the factory building on the Premises. He stated that "a great amount of water" had obviously been sprayed onto the Premises for the purpose of extinguishing the fire.
By reason of the extensive damage to the factory building both police and fire officers denied Mr Osman-Kerim access to the Premises for a period of time. He states that he went to the Premises almost every day for about two weeks after the 23 January fire, during which neither he nor anybody else, other than police officers "and other officials", were allowed to enter the site. He was informed by the police that the building was too dangerous to allow anybody onto the site. Mr Osman-Kerim also states that there was a padlock on the gate to the Premises, apparently placed there by the lessor, and that it was not until 7 February 2012 that he was provided with a key to that gate.
In his affidavit, Mr Osman-Kerim said that he did not recall Mr Bourne inviting contact should difficulties in obtaining access be experienced and continues by stating that "to the best of my recall, Mr Bourne did not offer any such invitation". However, as I have found at [142], Mr Osman-Kerim resiled from that statement in cross-examination.
Mr Osman-Kerim states that the Company ceased operation following the fire that occurred on 23 January. As a consequence, the Company was "devoid of ongoing income". Nonetheless, Remondis was retained to remove liquid waste on 16 February, 22 February and again on 7 March. The cost incurred for that removal was $50,256.50 and neither the Company nor Mr Osman-Kerim had funds to maintain that level of expenditure for waste removal.
Following the fire that occurred on 23 January, Mr Osman-Kerim arranged for Mr Sidaros to meet with Mr Bourne and Mr Reece to discuss the suggestions of Mr Sidaros to address the escaping liquid waste from the Premises. Mr Sidaros is said to have stated "the only way to stop any pollution is to divert the material coming out of the factory". In order to do so, Mr Sidaros is also said to have stated that he required access to the building so that he could get equipment in "to suck up the material inside". Mr Bourne responded "you can't go in there, it is too dangerous".
At a later meeting, Mr Osman-Kerim recalls Mr Sidaros suggesting to Mr Bourne that rather than trying to solve "the problem by looking at the level in the SRT", the better idea was to "bund the factory area and divert the material coming from the factory and then remove the material from the bunded area". Mr Osman-Kerim recalls the response of Mr Bourne being to the effect that it was not "a good idea" and that compliance with the clean-up notice was required.
Notwithstanding that response, Mr Osman-Kerim instructed Mr Sidaros to bund the factory building in accordance with his suggestion. While Mr Osman-Kerim states that his instruction was implemented, he subsequently noticed that the bunding had been "substantially destroyed".
There are a number of matters arising from this evidence that are best addressed when consideration is given to the submissions advanced on behalf of Mr Osman-Kerim.
He also stated that it was a core conclusion of his first report that the 24 January Notice "contributed to the risk of contaminants entering South Creek" (at par 2.2). This was said to be so "due to the difficulty of maintaining a significantly reduced capacity of the SRT" (Exhibit 1 at par 8.26).
Mr Ryan first inspected the Premises on 18 November 2013. In addition to the report of Mr Forrest, he was also provided with plans as well as the affidavit evidence of Mr Bourne that had been served upon the defendants.
Addressing the alternatives suggested by Mr Forrest, Mr Ryan took issue with some of the calculations applied by Mr Ryan to express the conclusion that he did. Whereas Mr Forrest had calculated that 1,050,000L of liquid waste would be retained by the sandbag bund proposed, making the same assumption, Mr Ryan calculated the retained volume to be 433,300L. Mr Forrest subsequently accepted that his initial calculation was wrong.
Mr Ryan also challenged the calculation of the volume of liquid waste that would have been retained by a proposed sandbag bund around the perimeter of the factory building. The calculation made by Mr Forrest assumed that the entire floor area was cleared whereas, according to the evidence of Mr Bourne, approximately 50 percent of the floor area was, at the time of the fire, occupied by equipment, stored material and fire debris, with the result that the volume of stored liquid waste that could be retained would be significantly reduced from that hypothesised by Mr Forrest. To the extent that Mr Forrest had also relied upon rates of evaporation from the ponded areas that he posited, Mr Ryan challenged the rate as exceeding that which should properly be applied, having regard to the rainfall and weather in the period to which Mr Forrest had directed his attention. Again, it seems that Mr Forrest ultimately accepted that his rate of evaporation was probably too high.
Mr Ryan also stated, and Mr Forrest accepted, that even if the alternatives suggested by the latter had been implemented, they would still have required the ponded areas to be pumped out, just as the SRT was required to be pumped out in accordance with the direction given by the prosecutor. However, both experts accept that fewer visits would have been required to pump out liquid waste from the ponded areas than was required in the case of the SRT. They differed on the extent to which the number of occasions upon which pump-out was required in order to avoid overtopping.
That difference turned upon the consequence of the above average rainfall affecting the Premises between 24 January and April 2012. The measure of the difference between them does not address the rainfall that might reasonably have been contemplated when the decision to give the 24 January Notice was made.
Mr Ryan identified a number of what he called "practical problems" associated with the construction of sandbag walls as bunding. Such walls could only have been a temporary measure and did not offer the structural stability that the concrete walls of the SRT provided. In addition, to address the problem of permeability of liquids through the proposed sandbag walls, Mr Forrest proposed to cover those walls with plastic. According to Mr Ryan, the caustic nature of the stored liquid waste may well have rendered the plastic sheeting and sandbags liable to failure by creation of holes resulting in the escape of liquid. While the use of sandbag walls to control floodwaters was acknowledged, neither engineer was able to offer any experience in the construction of such walls, covered in plastic, for use in circumstances where the retention of liquid waste was required.
Finally, Mr Ryan expressed the opinion that the requirement to isolate or block the SRT in the circumstances that prevailed on and following 23 January 2012 was "consistent with good practice" (Exhibit Y par 8.2.1). Mr Ryan also stated that the requirement to maintain that level in the SRT at 30 percent capacity provided a buffer for significant events, that buffer providing "enough volume to capture approximately 32mm of rainfall falling on all areas of the Premises. That, so he said, would seem appropriate as this amount of rain was exceeded on only 5 out of 98 days over the period being considered, providing an approximate 95 percent confidence level (Exhibit Y par 8.2.2.1). He regarded maintaining the SRT level at 30 percent capacity "to be good practice given the circumstances at the Premises" (par 9.3).
Ultimately, Mr Forrest conceded, in the course of his oral evidence, that the measures required by the Prosecutor in the 24 January Notice reflected an appropriate emergency response. His thesis was that having imposed that measure, it was appropriate, at some unspecified time thereafter, to consider alternatives that did not result in the frequency of removal that was, in fact, the case following the 23 January fire at the Premises. Mr Forrest also acknowledged that his design took into account the unseasonably high rainfall that occurred following 23 January 2012 (Tcpt 368:14-25).
Mr Osman-Kerim annexed to his affidavit a copy of the lease into which he entered, commencing on 14 November 2007 and terminating on 13 November 2012, subject to the right to exercise an option for a further five year term. No evidence was led to suggest that following the fire on 23 January 2012 the lease was terminated, at least at any time during the charge period relating to the present offence or the charge period relating to the 24 January Notice.
By reference to the statutory provision and the evidence to which I have referred, I am satisfied beyond reasonable doubt that at all times during the charge period, the Company was the occupier of the Premises, being the premises to which the 17 January Notice relates.
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]).
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."
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.
The relevant pollution event that is "likely to occur" by reference to the definition just discussed is "water pollution". That expression is also defined in the Dictionary to the Act relevantly to mean:
"(d) placing any matter (whether solid, liquid or gaseous) in a position where …
(ii) it is likely to fall, descend, be washed, be blown or percolate, into any waters … or into any drain … used or designed to receive or pass rainwater, floodwater or any water that is not polluted … if the matter would, had it been placed in any waters, have polluted or have been likely to pollute those waters."
The analysis of liquid samples taken from within the bunded areas of the factory on the Premises leaves no doubt that had the liquid waste so contained, being the matter identified in the opening words of the definition, been placed in the unnamed watercourse or South Creek, it would have been likely to pollute those waters. Applying the jurisprudence directed to "reasonable suspicion", the condition precedent to the exercise of power under s 91 required that the prosecutor hold a reasonable suspicion that there is a real and not remote possibility that the liquid waste observed by Mr Bourne on 16 January 2012 was likely (ie as a real and not remote possibility) to enter any water or drain. In order to address that requirement it is necessary to return to the evidence.
Mr Bourne had been employed by the prosecutor as a regional operations officer since April 2010. He had completed university degrees as a Bachelor of Science in Environmental Biology and a Bachelor of Business in 2004. Prior to his employment by the prosecutor, he had been employed as an environmental consultant in which his duties included removing hazardous materials, conducting site contamination assessments, preparing remedial action plans, soil disposal and classification reports, groundwater and surface water monitoring reports, and carrying out occupational health and safety projects and projects in the field of hazardous materials.
Following his appointment as an officer of the prosecutor in 2010, his duties have included conducting site inspections and waste investigations, regulating environment protection licences together with the premises to which those licences relate and investigating reports made to the prosecutor relating to waste issues. For the purpose of executing his duties, he was trained in the methods of sample taking. Those qualifications are relevant to, although not the sole determinant of, his capacity to make the assessment and form the suspicion that he did following his inspection on 16 January.
The liquid waste on the floor of the factory on the Premises that Mr Bourne has stated to be the pollution incident for the purpose of the 17 January Notice is described more fully at [53] above. On the basis of his observations in his affidavit affirmed 29 August 2013, he identified the matters that he took into account in recommending the issue of the 17 January Notice. They are relied upon to inform the suspicion necessary to exist in order to engage the provisions of s 91. He concluded that approximately 18,000L of concentrated, mixed dangerous and hazardous liquid materials were stored in the 18,000L (20,000L) above ground storage tank. He also concluded that "up to 180,000L" of mixed dangerous liquids, hazardous liquids and wash waters were stored in the four 45,000L above ground storage tanks. Sampling of liquid waste from those tanks on 24 November 2011 and 16 January 2012 showed that the liquid was "environmentally hazardous, with high levels of pesticides present".
In addition, he referred to 38,000L of concentrated hazardous and dangerous residues stored in 1,000L IBCs within the factory but outside the bunded area of the four 45,000L storage tanks. Also located outside the bunded area were quantities of other dangerous goods and materials associated with the drum reconditioning process, including caustic materials.
Mr Bourne also observed that internal PVC stormwater pipes were located both inside and outside the bunded area for the four 45,000L storage tanks. Damage at ground level to those pipes could cause any liquid escaping into them to drain to the SRT. Some of those downpipes were within the bunded area behind wash bays in which there was liquid waste standing at the time of the inspection.
The account taken by Mr Bourne of both the volume and nature of the liquid waste and chemicals that were present in the factory building on 16 January must also be considered in the context of a visit to the Premises occasioned by a fire that had occurred that day. As recorded in his inspection report of 16 January (Exhibit N, Tab 12), he observed that the reported fire had been contained, with fire damage limited to the office but "minor damage to the warehouse". He photographed various areas within the factory or "warehouse", those photographs forming part of his report. While he recorded that the fire "did not appear to impact the liquid waste stored within the warehouse", he noted that there were minor quantities of firewater on the floor of the building; that liquid waste had entered the bunding of the waste water treatment system and the above ground waste storage tanks; that liquid waste had also entered the wash bays and that the fire door adjacent to the liquid waste treatment plant had been damaged.
The fact that the Premises were without any electrical power was also considered by Mr Bourne to be of some significance. Power was necessary in order to operate the pump or pumps that not only remove waste from the wash bay area but also, as he assumed, operated to transfer waste among the four 45,000L tanks. Mr Osman-Kerim had stated in respect of previous spills that he thought were those due to pump failure. That was an explanation offered in November 2011 for the escape of liquid waste from the Premises into the site and factory of Lisbon Engineering.
When the extent of liquid waste within the bunded areas around the storage tanks and treatment plant and the apparent overtopping of that waste outside the waste water treatment system was drawn to the attention of Mr Osman-Kerim on 16 January, Mr Osman-Kerim stated that he was unaware of the spill of liquid waste, how the spill had occurred or the source of the leak within the waste treatment and storage system.
In the absence of power for the pumps, Mr Bourne considered that the hydraulic head or pressure of the liquid in those tanks, standing 8 to 9 metres high, caused the stored liquid to flow back through the pumps and onto the floor within the bunded area (Tcpt 153:38-46; 156:39-157:4. He identified that as a possible explanation to Mr Osman-Kerim, to which Mr Osman-Kerim responded by stating that he was unaware of the cause, although it may have been related to the pump. In that context, the following evidence of Mr Osman-Kerim is important (Tcpt 442: 39-443:13):
"Q. I've moved from the problem with the broken pump in October/November 2011.
A. Yeah.
Q. To 16 January 2012 when the first fire happened.
A. Yeah.
Q. There was a leak then as well, wasn't there?
A. Yeah. That's right.
Q. You didn't know what caused that leak, did you?
A. I believe I think when the power shut down from the pipe, from the wash bay into the tank was water must be come out of it and then flow to the wash bay and be up to the water treatment there.
Q. When you say you thought you didn't actually know that, did you?
A. It was guessed, actually.
Q. You were guessing that it was a problem caused by the power being off?
A. It was something shut down and then something, like, suddenly shut down, or that suddenly something come out of this, some water leaked out.
Q. You just didn't know what the cause was?
A. Not sure exactly what, exactly 100% but I was guessing it must be to do with that."
Mr Bourne also considered that the bunding around the waste water treatment plant and above ground storage tanks was inadequate for the volume of waste stored in those tanks. That consideration was founded upon previous inspections that he had carried out in company with WorkCover personnel and the notices that had been given by that Authority to the Company requiring that the bunding be improved. Although the WorkCover notices appeared to refer to the bunding around the wash bay, waste water treatment plant and storage tanks, he also formed the view that the bunding at the entry points to the Premises was inadequate for the volume of waste stored in those tanks. As he had on prior occasions observed liquid waste on the floor of the factory outside the bunded areas (Exhibit N, Tab 9) he was concerned as to the capacity of the factory perimeter bunding to contain liquid if the tanks failed.
At the time of his inspection on 16 January, Mr Bourne believed that the above ground storage tanks were "almost at capacity" (Tcpt 157:50). When cross-examined as to whether he had enquired of Mr Osman-Kerim as to the volume of waste in the tanks, he stated that he could not recall asking that question. However, he based that belief on three matters. First, on inspecting the premises at various times since September 2011, he noted that the 45,000L above ground tanks had leaked from the top, as was evident from spillage that could be seen adhering to the side of the tanks. Although he referred to the tanks in general, on further questioning, he noted that his observations applied to two of the 45,000L tanks. Mr Osman-Kerim did not deny that tanks had overflowed and that the overflow was attributed to the tanks being full.
The second event that informed Mr Bourne's belief that the tanks were almost at capacity was an inspection made of the top of two of the tanks when he visited the site on 24 November 2011. At that time he had used a ladder to look into the top of each tank and had then observed that in the two tanks that he was able to inspect the liquid waste was close to the top (Tcpt 204:4-6), being less than a metre from the top of the tank (Tcpt 232:19-21). He had not used the ladder to inspect the tanks on 16 January because WorkCover had determined that the use of a ladder to inspect the tanks was unsafe. So much was recorded in the notices given to the Company by WorkCover in November 2011, copies of which notices had been provided to Mr Bourne.
There was debate as to whether sight gauges installed on the four 45,000L tanks were operative on 16 January. Mr Bourne said that none of the tanks had operative gauges, a circumstance made apparent to him during his prior inspections. When he had raised the matter with Mr Osman-Kerim on those occasions, Mr Osman-Kerim had stated that they became blocked by sediment in the liquid waste. Believing that the gauges were not functioning, he did not use them as an indication of the extent to which the tanks were holding liquid on 16 January.
Mr Osman-Kerim claimed that the sight gauges were operating on three of the four tanks. For the purpose of giving evidence, the two above ground tanks closest to the wash bay were identified as tanks A and B while those behind them were identified as tanks C and D. He claimed that at all times, including on 16 January, the gauges on tanks A, B and D were operating while that on tank C had broken. To the extent to which it is necessary to resolve this debate, I favour the evidence of Mr Bourne.
The notices issued to the Company by WorkCover on two occasions in November 2011 identified broken gauges on the above ground storage tanks. It was not suggested by Mr Osman-Kerim in evidence that the identification of broken gauges by WorkCover was inaccurate nor did he state that between receipt of those notices and 16 January 2012 the gauges were repaired. Further, when Mr Bourne was challenged in cross-examination as to the presence of operative gauges, it was put to him that the only tank upon which a gauge was not operative was tank D (Tcpt 224:19-21). When Mr Osman-Kerim was called to give evidence, he stated that it was tank C on which the sight gauge was broken (Tcpt 390:11-21).
However, it seems to me that the debate about the gauges is somewhat sterile. Neither Mr Bourne nor Ms Osman-Kerim determined the volume of material in the storage tanks on 16 January by reference to a gauge. Importantly, when asked in cross-examination as to the volume of material in the tanks, Mr Osman-Kerim stated that tanks A and B were almost full and that tanks C and D each contained liquid waste but he was unaware of the volume in each (Tcpt 440:6-49). He explained that because of the manner in which the system of waste liquid storage operated, it was necessary for there to be liquid in both tanks C and D as it was from tank D that washing water was returned for reuse in the wash bay.
Mr Osman-Kerim's lack of knowledge of the volume of waste stored as at 16 January 2012 extended to the horizontally placed 20,000L above ground storage tank. That tank contained the residue liquids extracted from containers brought to the Premises before they were washed and processed.
Apart from his observation of spills from the top of tanks A and B and his ladder inspection of those tanks on 24 November, Mr Bourne also inferred from the fact that about 1,000L IBCs were being used to store liquid wastes was an indication that the above ground storage tanks were at or near capacity. The fact that these containers were being stored outside the bunded area was also of significance. As Mr Bourne's inspection report of 15 December 2011 with its attached photograph states and demonstrates, the 1,000L IBCs were themselves capable of leaking waste liquid residue onto the floor of the factory if they were in any way damaged (Exhibit N, Tab 11).
A further factor relevant to Mr Bourne's assessment of the retained liquid waste on 16 January was his understanding that the contents of the tanks had not been removed from the tanks for some time. His understanding was based on prior discussion with Mr Osman-Kerim (Tcpt 229:1-15).
In founding his suspicion of a "pollution incident", Mr Bourne also took into account the history of liquid waste that was observed to have spilled within the Premises prior to 16 January 2012. Observation of spills had been made by Mr Bourne on 2 September, 28 September, 5 October, 24 November, 25 November and 15 December 2011 (Exhibit N, Tabs 1,2,3,7,8,9 and 11). While these spills had occurred within the factory building, Mr Bourne was also conscious on 16 January of the liquid waste that had escaped from the Premises onto the adjoining property of Lisbon Engineering on 24 November, still evident on 25 November and also on 14 December 2011.
Not only was Mr Bourne conscious of the escape of liquid waste to the adjoining premises that had occurred in November, he was aware at the time of his inspection on 16 January that another escape of liquid into the adjoining factory had occurred.
All of these matters were taken into account by Mr Bourne on 16 January, understanding that any liquid spill from the factory was likely to drain into the SRT via the stormwater grated drain that ran outside but parallel to the front of the building. He was also aware that the SRT as then constructed allowed water to be discharged into the unnamed watercourse and ultimately to South Creek.
In the course of Mr Bourne's cross-examination, it was suggested that the bunded area of the factory building could contain about 120,000L. According to Mr Bourne's evidence, about 50 percent of the floor area was occupied by equipment and stored IBCs, thereby reducing the storage capacity of the bunded area to about 60,000L, assuming a consistent height of bunding and a perfectly flat factory floor. Assuming that tanks A and B were almost full, as Mr Osman-Kerim accepted was the case, waste discharging from those tanks, should they fail, would exceed the capacity of the bunded area by approximately 50 percent, that is, there would be a discharge of almost 90,000L into an area with a capacity to retain only 60,000L. However, the capacity was likely to be less than the 50 percent postulated. The factory floor was not flat and the perimeter bunding, particularly that near the roller door over which trucks and equipment regularly ran, appeared to be worn so that its reduced height would lead to the prospect, in combination with the sloping surface, of some of the retained liquid overtopping the bund and running into the external grated drain (Tcpt 176:41-177:8).
I accept the submission of the prosecutor that regardless of whether Mr Bourne was correct in his belief that all 45,000L tanks were full, the acknowledgement by Mr Osman-Kerim that the assumption in respect of two of the tanks was correct and that the remaining two tanks did contain liquid, coupled with the fact that on 16 January one or more of the tanks was leaking from a cause that neither Mr Bourne nor Mr Osman-Kerim was able to identify, demonstrates that Mr Bourne's suspicion was reasonable. He was entitled to be apprehensive that if the discharge of waste continued, the inadequate bunds and poor sealing of wall to floor in the building could lead to the escape of liquid waste from that building. Clearly, it would not require all tanks to fail for the volume discharged to exceed the bunded capacity of the factory floor area.
However, analysis honed to that detail would seem to exceed the requirement for the assessment of the reasonable suspicion to which I have earlier adverted. As the prosecutor submitted, that assessment does not allow for hindsight or a fine analysis of the risk determined with the benefit of a detailed examination of facts in the course of a trial. The reasonable suspicion required assessment in the light of what was observed, what was known and what ought reasonably to have been known. Confronted with a spill of liquid waste within the factory from a cause that could not be identified by Mr Osman-Kerim and where no power was available to operate any plant, including pumps, Mr Bourne held a suspicion that there was a real and not remote possibility that the liquid waste that had escaped was likely to enter the unnamed watercourse through the SRT.
Despite the criticisms made of Mr Bourne on behalf of Mr Osman-Kerim, it must be remembered that Mr Bourne issued an oral clean-up direction on 16 January that, in terms, required that the SRT be isolated. That clean-up direction was given to Mr Osman-Kerim in person. When the direction was given, Mr Osman-Kerim neither directed attention to the volume of waste liquid then being stored on the Premises nor did he suggest that any spill from the tanks could be contained within the factory building. In short, he gave no response to the direction, suggesting that it was unnecessary or inappropriate. Moreover, he did not do so on 17 January when the clean-up direction given on 16 January was confirmed by the delivery to him of the 17 January Notice.
In cross-examination, Mr Bourne accepted that it would have been reasonable for him to ask Mr Osman-Kerim how the system of cleaning and storage worked on 16 January and whether the gauges on the above ground tanks were working. I do not regard Mr Bourne's response as affecting the reasonableness of his suspicion. How the system worked was, in a sense, irrelevant on 16 January as there was no system able to be operated at that time given the absence of any electrical power. I have already addressed the relevance of the tank gauges to the decision made by Mr Bourne and add nothing further in that regard.
Whether the suspicion of Mr Bourne was reasonable is to be judged objectively having regard to all of the circumstances that I have identified, being those circumstances known to Mr Bourne when the clean-up direction was given. As the prosecutor submitted, the fact that Mr Bourne could have asked more questions neither establishes that he did not reasonably hold the relevant suspicion nor does it prove that more questions should have been asked.
In summary, Mr Bourne's visit to the Premises on 16 January was made in the context of a fire that had damaged part of the factory building; there was a spill of liquid waste over several areas within the building that appeared to involve a leak from one or more of large tanks storing liquid waste and the cause of that leak was not able to be identified either by Mr Bourne or by Mr Osman-Kerim. That context, coupled with the history of liquid waste spills in and from the Premises causes me to conclude beyond reasonable doubt that Mr Bourne did hold the relevant suspicion and that suspicion was reasonable. His report of those facts and circumstances to Ms Ingham, under whose hand the 17 January Notice was issued, leads me to conclude that she also held the relevant suspicion which was reasonable. Although Ms Ingham was called to give evidence, she was not cross-examined to suggest that she did not hold such a suspicion at the time at which the 17 January Notice was given.
The second matter to be addressed arising from the submissions by Mr Osman-Kerim is Mr Bourne's reliance upon the WorkCover notices directed to the inadequacy of bunding. While Mr Bourne accepted that the reference to inadequate bunding in the WorkCover Notices was a reference to bunding around the wash bay and storage tanks rather than perimeter bunding for the factory building itself, that, so it seems to me, does not lessen the relevance of those notices. The fact that the bunding around those two areas was seen to be inadequate, coupled with Mr Bourne's assessment that the bund located around external doors, particularly the roller shutter door, appeared to be worn, remained relevant not only to the reasonableness of his suspicion but also to the appropriate clean-up action. Waste liquid overtopping the wash plant bund and storage tank bund, as he had observed, entitled Mr Bourne reasonably to suspect that liquid waste was likely to flow up to and over the bund intended to protect the roller shutter door and then into the drainage system leading to the SRT should further discharge occur.
Further, it is relevant to observe that no contemporaneous complaint or challenge was made by Mr Osman-Kerim when the Notice was given to him on that day and its requirements explained both to him and to Ms Kemp by Mr Bourne and Mr Reece (see [59] above). As I have earlier recorded at [56] when Mr Bourne gave oral clean-up directions to Mr Osman-Kerim on 16 January, requiring, amongst other matters, isolation of the stormwater retention pit, Mr Osman-Kerim is recorded by Mr Bourne as stating that he would comply with that Direction. The absence of complaint or challenge by the recipient of the Notice is probative of the fact that the Notice was sufficiently clear to make apparent the obligation that it sought to impose.
Mr Osman-Kerim also submits that compliance with the 17 January Notice was, having regard to the time at which it was given, unreasonable in that it required compliance "within less than three hours of its issue". He submits that the time for compliance provided no reasonable opportunity to take into account the ability of the Company to engage "the suitably qualified expert" and to have that expert perform the work required by the stipulated time of 5.00pm on 17 January.
The submission that three hours only was available to comply with the Notice does not accurately reflect the circumstance in which the Notice was given. As I have already stated, a direction requiring that the SRT be isolated by 5.00pm on 17 January was given to Mr Osman-Kerim on 16 January. As s 93(3) of the Act provided, the oral notice then given ceased to have effect after 72 hours, unless written notice of the direction was given within that time. That is what the 17 January Notice did.
It is correct to observe that the latter Notice added to the direction for isolation of the SRT a requirement that a suitably qualified expert be engaged to undertake that work. However, that added requirement made explicit that which was implicit in the oral direction of 16 January, namely that the isolation of the SRT was work to be undertaken by someone qualified to do so and in a competent manner.
Further, the requirement that a qualified person be retained is not identified as an element of the charge against the Company or against Mr Osman-Kerim. The breach of the 17 January Notice charged is the failure of the Company to isolate the SRT by 5.00pm on 17 January 2012. It is accepted by Mr Osman-Kerim that work undertaken to isolate the SRT did not occur until 30 January and that work was undertaken at the request of the prosecutor.
The submission that the period allowed for compliance with the Notice was inordinately and unreasonably short must be considered in the context in which the power given by ss 91 and 93 of the Act is able to be exercised. The defined meaning of "clean-up notice", directed, as that definition, to preventing, minimising, removing, dispersing, destroying or mitigating pollution resulting from an incident as a result of which pollution "has occurred, is occurring or is likely to occur", demonstrates that the proper exercise of power under these sections will often require the recipient of a clean-up notice to act promptly in order to prevent or mitigate environmental harm. The fact that prompt action may be inconvenient or occasion cost to the recipient, however significant that inconvenience or cost may be, is no more than an incident of the power being exercised. Once a reasonable suspicion is held that a pollution incident has occurred or is occurring, the direction to the relevant owner or occupier to take clean-up action within a limited period of time does not involve an unreasonable exercise of power.
Whether a particular limitation upon the time within which such an action is required will depend upon the circumstances of the particular case. In context, I have already referred at length to the circumstances in which the Notice came to be given. Those circumstances are not only relevant to the element of reasonable suspicion, they are also relevant to the appropriate time for compliance with a clean-up direction.
Importantly, Mr Osman-Kerim did not identify any particular difficulty in complying with Direction 3 of the 17 January Notice. As I have already recorded, Mr Osman-Kerim did not make any complaint on either 16 or 17 January about Direction 3. Indeed, he stated to Mr Bourne on 16 January that he would comply with that Direction. He did not subsequently seek any extension of time to comply nor did he indicate that he was having difficulty in obtaining the services of a plumber to attend the Premises. While Mr Osman-Kerim stated in evidence that he had telephoned Mr Sidaros on 16 January (Tcpt 459:9-28), his evidence as to follow-up action when Mr Sidaros did not attend on either 16 or 17 January is somewhat vague, both as to the number of follow-up telephone calls he made and when they occurred.
In contrast, the evidence led by the prosecutor suggests that the task of isolating the SRT could be organised quickly and that the work itself was of short duration. The evidence of Ms Ingham establishes that having agreed to the quote received from Mr Sidaros on 30 January, Mr Sidaros attended the Premises that same day when he carried out the work necessary to isolate the SRT (Exhibit N, Tab 22). The account received by the prosecutor from Dr H20 (Mr Sidaros) showed a total time charge for work involved in unblocking a small detention pit at the Premises and for sealing the SRT as 2.25 hours for two men. That fact speaks against any suggestion that the magnitude of the task to be performed in compliance with Direction 3 was so great that the period specified for compliance in the 17 January Notice was unreasonable.
For these reasons, I do not accept the submission on behalf of Mr Osman-Kerim that the 17 January Notice was unreasonable because it failed to take into account the ability of the Company to comply with the Notice within the time specified. Moreover, the obligation to comply continued after 17 January by operation of s 319A of the Act, with the result that there was non-compliance with the Notice until 30 January 2012.
I have dealt at some length with those facts and circumstances as they were known to Mr Bourne and Ms Ingham at that time. I do not repeat all that has previously been recorded by me in response to the challenge made to Mr Bourne's reasoning, noting that there was no challenge made to Ms Ingham's reasoning and suspicion, notwithstanding the she was the officer of the prosecutor who gave the 17 January notice. I do accept that she relied, in part, upon the observations and reasoning of Mr Bourne.
Nonetheless, there are several of the considerations itemised by Mr Osman-Kerim upon which it is appropriate to add further brief observations.
In cross examination, Mr Bourne was asked whether, when preparing a draft of the 17 January Notice for Ms Ingham, he had checked inspection reports prepared by him following his prior visits to the Premises. Contrary to the assertion by Mr Osman-Kerim, Mr Bourne did not say that he had not referred to those reports. Rather, he said that he did not recall, when giving his evidence at trial, whether he had done so on 16 January 2012 (Tcpt 166:43-167:14). However, he did state that at the time of drafting the Notice he did have regard "to the history of the site" and, at that time, he had a specific memory of liquid waste spilling from the above ground storage tanks on the occasion of his visits to the Premises prior to 16 January (Tcpt 167:20-24). I regard that as a credible statement, given that Mr Bourne had attended the Premises on a number of occasions in October, November and December 2011 when the spill of liquid waste had occurred. Further, the fact that recourse to existing reports or recall of recent history (or both) were relied upon when drafting the Notice is evident from the matters recorded in the Notice under the heading "[b]ackground". Specific reference is there made to clean-up notices issued to the Company in November and December 2011, as well as to the improvement notices issued by WorkCover.
Reference in items (iii) and (vi) at [247] of Mr Bourne's claimed failure to consider the consequence of the lack of electrical power to the Premises on 16 January has been addressed earlier in these reasons. Confronted with the liquid waste that had spilled at or about the time of the fire; the absence of any explanation from Mr Osman-Kerim as to the source or cause of that spill; the fact that earlier spills had been attributed by Mr Osman-Kerim to pump failure; and the circumstance that Mr Bourne did not then proceed with a detailed interrogation of Mr Osman-Kerim as to his perception of the consequence of being without electrical power is hardly surprising and certainly not unreasonable.
By reference to item (iv) at [247], it is incorrect to assert that Mr Bourne failed to consider whether, in the event of one or more storage tanks failing, the bunding of the factory was adequate to prevent the escape of liquid to the SRT. Consideration that he gave to that topic has earlier been discussed. In the circumstance of a fire having occurred together with a spill, no detailed survey or calculation was required in order to consider the prospect of an escape of liquid waste. Liquid waste had already overtopped one of the bunds. Given Mr Bourne's concern for the adequacy of the building perimeter bunds, he could not reasonably be criticized for determining that preventative action was required against the prospect that further liquid may escape from the tanks, overtopping the bunds and then draining to the SRT. The submission to the contrary is without substance.
Consistent with the manner in which I consider the two sections are to be read, it is necessary to consider whether Mr Osman-Kerim has established, on the balance of probabilities, that the Company had a reasonable excuse for its failure to comply with the 17 January Notice. While, in his final submissions, Mr Osman-Kerim did not identify specific evidence directed to the excuse of the Company for non-compliance, the only topic identified as potentially relevant is "the uncertainty of the direction" contained in the Notice and the "time frame or time frames specified therein".
The only measures taken by Mr Osman-Kerim to address the 17 January Notice are those to which I have already referred. As best as I can understand it, 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 Premises to "look at the matters raised" in the clean-up notice. He understood that Ms Kemp contacted another plumber who came to the Premises 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.
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.
The conclusion I have reached as to the efforts made by Mr Osman-Kerim on behalf of the Company to comply with the Notice are made the stronger when the operation of s 319A of the Act is taken into account. By operation of that section, the obligation to comply with the 17 January Notice continued until the work was done on 30 January. 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.
Mr Osman-Kerim also made reference to the judgment of the plurality in that case where at [68] their Honours stated that the legal standard of unreasonableness when seeking to impugn the exercise of statutory power was not limited to an irrational or bizarre decision, being one that is so unreasonable that no reasonable person could have arrived at it. He also suggested that the plurality recognised, at [73], the validity of "a proportionality analysis by reference to the scope of the power". It was submitted that such an analysis was appropriate in the present case. However, it should be observed that at [74] their Honours stated that "an obviously disproportionate response is one path by which a conclusion of unreasonableness may be reached", noting that the submissions in the case before them did not draw upon such an analysis.
Mr Osman-Kerim accepts that the validity of the decision to issue the 24 January Notice is to be assessed at the time at which the decision was made and the Notice given. He accepts that the direction in the Notice to seal the SRT (repeating the then unfulfilled direction in the 17 January Notice) was reasonable. The issue he takes is with the decision to give Direction 3a, that is to retain the liquid waste in the SRT at a level that did not exceed 30 percent of its capacity "on a permanent basis".
He contends that given the risk of rainfall, the size of the catchment for the SRT "and the lack of any expert knowledge" within the offices of the prosecutor as to the way in which contaminated water might be contained, it was incumbent upon the EPA to obtain expert advice promptly. It could be expected that such advice would be directed to steps to mitigate or remove the threat of pollution by discharges from the SRT in the event of heavy rainfall and assess the practicality of requiring the Company to maintain the level of storage in the tank at 30 percent. Yet, so the submission runs, such expert advice was not sought.
It was further submitted, having regard to the terms of Direction 3a, that the Company would be guilty of an offence at any time at which the level of liquid waste in the SRT was above 30 percent of its capacity. The evidence given demonstrated that an obligation imposed in those terms was unreasonable because of the criminal sanctions that attended the breach, when compliance imposed an unachievable obligation.
In support of that submission, reference was made to the following evidence given by Mr Bourne (Tcpt 187:28):
1. "Q: You would agree with this, that the feasibility of what you put in the clean-up notice in terms of maintaining the level of SRT at 30 percent depended on how much rain happened to fall?
2. A: Yes."
However, to put that evidence in context, Mr Bourne was thereafter asked whether it would be impossible to continue maintaining the level in the SRT at 30 percent if heavy rain occurred, Mr Bourne responded, "No - I don't think so" (Tcpt 188:22-29).
Mr Osman-Kerim also points to the evidence of Mr Bourne where he agreed that when deciding to give the 24 January Notice there was potential for heavy rainfall (Tcpt 191:8-13). However, to be fair to Mr Bourne, his answer acknowledged that the prospect of heavy rainfall (not defined) had been considered but nonetheless he maintained that Direction 3a was reasonable, in the expectation that the Company was able to comply. Shortly before giving that answer, Mr Bourne stated that before issuing the 24 January Notice he had enquired of "the licensee" as to whether "they" had any comments to make upon the terms of the order and no comments were forthcoming (Tcpt 190:39-43). As I have recorded at [69], Mr Bourne had telephoned Mr Osman-Kerim before attending the Premises and given him verbal clean-up directions that included the direction to maintain the level of liquid waste in the SRT to below 30 percent of its maximum capacity.
The final aspect of Mr Bourne's evidence upon which Mr Osman-Kerim relies for the purpose of the present submission is the acknowledgement by Mr Bourne that at the time at which the decision to issue the 24 November Notice was made, it did not occur to him to limit compliance with Direction 3a to circumstances in which "rainfall didn't exceed a certain level", to use the language of the question posed (Tcpt 194:14-17). Further, Mr Osman-Kerim relied upon the fact that the first calculations made by Mr Bourne of the catchment area of the SRT and the volume of water likely to flow from that catchment to the SRT in a given rainfall event was a calculation undertaken on 28 February 2012 (Tcpt 215:24-30).
Mr Osman-Kerim then referred to the expert evidence given by Mr Forrester and Mr Ryan as to their respective approaches to Direction 3a of the 24 January Notice, its consequences and the alternatives available to address both the arrest of contaminated liquid that would otherwise discharge into the SRT and the removal of that liquid from the Premises. Various points of difference between those experts were identified although much of that discussion did not substantially advance the basis upon which Mr Osman-Kerim challenged the validity of the decision to impose Direction 3a. There was considerable focus upon the consequence of the above average rain that fell on the Premises after 24 January 2012. However, that focus transgresses the submission, correctly made by Mr Osman-Kerim that, in assessing whether the decision to give the direction was unreasonable in the sense discussed in Li, it was necessary to do so by reference to the facts and circumstances existing and known at the time the decision was made.
I have earlier referred, in summary form, to the alternate proposal advanced by Mr Forrest. That involved sandbag retaining structures in an endeavour to contain contaminated liquid flowing from the factory Premises so as to avoid, or at least limit, the volume of contaminated liquid that entered the SRT. Both experts accepted that addressing the need to prevent contaminated liquid waste from leaving the site, through the mechanism of Direction 3a or containment by sandbag structures, could only ever be a temporary or interim measure until such time as the source of contaminants was removed. Both interim measure necessitated retained liquid waste being removed from the Premises by tanker but removal would be required less frequently in the case of the proposal advanced by Mr Forrest than was the case if the mechanism for containment was that required by Direction 3a.
Ultimately it was submitted by Mr Osman-Kerim that the question was not whether, from an engineering perspective, one solution was better than another but that the solution advanced by Mr Forrest was credible, was able to be put in place relatively easily and cheaply and reduced the risk of the Company breaching the law. In contrast, it was said that the onus cast upon the Company to pump out the SRT at any time, day or night, "in the face of the risk of any unknown quantity of rainfall" when there was an alternative "that was not likely to have that effect" demonstrated that Direction 3a was unreasonable. Further, it was submitted that it was not for the Company to suggest an alternative proposal because the prosecutor decided to impose the Direction and in doing so had to "look past the simplistic notion of whatever the licensee is required by [it] to do (the Company) shall do".
That analysis, so it is submitted, demonstrates that the exercise of discretion available to determine an appropriate means or method of clean-up action was exercised following the pollution incident. The evidence of Mr Forrest does not advance a case to the contrary. The only difference between the solution posited by him and the direction given by the prosecutor was that "the SRT, having less capacity than the lake" he proposed creating, may require more frequent pump-out (Tcpt 285:24-29). Moreover, Mr Forrest acknowledged that "the 30 percent selection is a good solution in an initial emergency response" but that, as a long-term measure, a further review of that requirement should have been considered (Tcpt 287:13-23). In short, Mr Forrest considered Direction 3a of the 24 January Notice to be workable but imposed a potentially more onerous obligation on the Company than did his solution. That does not demonstrate a decision that is, in the relevant legal sense, unreasonable.
The submission by Mr Osman-Kerim that the direction challenged was unreasonable because it was not limited in time is answered by a proper analysis of the provisions of s 91. At the time at which the decision to give the Notice was made, the likely duration of the pollution incident was unknown. Had the 30 percent capacity requirement been limited in time there would potentially have been a disconnect between that limitation and the pollution incident. A reasonable construction of the direction indicates that Direction 3a remained an operative direction only while the pollution incident pertained. That construction is consistent with the power being exercised.
I observe that the submission just summarised is implicitly accepted by Mr Osman-Kerim by dint of his challenge to an allegation of breach of the Notice after 8 March because, on his analysis, there is no evidence that liquid in the SRT after that date was "liquid waste". Once the content of the SRT ceased to be "liquid waste", Direction 3a ceased to be engaged. Apart from applying the definition of "waste" in the Dictionary to the Act, the clear purpose reflected in the Directions given in the 24 January Notice is to prevent the escape of liquid that was contaminated by or had come into contact with both the firewater and liquids that emanated from the fire-damaged factory building. That was the "liquid waste" to which the Direction related.
The prosecutor submits that the circumstances in which the 24 January Notice came to be given are relevant to the reasonableness of the Directions given. Although earlier described in more detail, those circumstances are relevantly:
1. the factory on the Premises had been substantially destroyed by fire with liquid waste flowing directly from the damaged factory building into the stormwater system;
2. liquid contaminated by chemicals as well as material washed to the ground by firefighters was flowing into the SRT and then surcharging into the unnamed creek;
3. as a temporary measure to stem the escape of liquid from the SRT, a traffic cone had been jammed into the discharge pipe from the SRT in an endeavour to prevent the escape of further contaminated liquid;
4. contaminated liquid was observed to have escaped and by observation could be determined to have polluted the nearby watercourse and creek.
Mr Bourne and Mr Reece, both experienced officers of the prosecutor, were present on the site immediately following the fire on 23 November. Mr Bourne was present for some hours while Mr Reece was onsite for the entire day seeking to address the escape of contaminated liquids across the boundaries of the Premises. Mr Reece learned that some 60 firefighters had attended to control the fire but, understandably, the focus of the efforts of the firefighters was to extinguish the blaze without undue concern as to the extent to which liquids used to that end were either contained within or discharged from the Premises. A great part of the day was spent by Mr Reece addressing the escape of contaminated liquid both in assessing its extent and supervising its removal. (Exhibit U, Tab 5).
Both officers returned the following day, observing that firewater and liquid waste was flowing from the eastern side of the factory premises, being the waste that was directed by booms into the SRT. Failure of the above ground storage tanks was a risk that had been materially increased by the fire that occurred on 23 January. Mr Bourne gave evidence that when looking into the damaged factory building from the outside he could see that one of the above ground storage tanks was at an angle with the top of that tank "somewhere between 30 and 45 degrees" (Tcpt 219:37-41). He remained of the opinion that if the large storage tanks failed, none of the bunding within the factory, including that which was supposed to protect the openings, was likely to be adequate to retain any significant spill from those tanks.
These were all circumstances that caused Mr Bourne to frame the 24 January Notice in the terms that he did. Directing that contaminated liquids within the SRT be maintained at 30 percent of maximum capacity was a level chosen so as to afford capacity to retain contaminated liquids in the event of tank collapse or rainfall. The circumstances that led to the decision to issue the 24 January Notice in those terms render, according to the submission, the decision as being one that is "unimpeachable".
The reasonableness of the decision cannot be judged by taking into account events that occurred after but not reasonably foreseen on 24 January. Moreover, so it is submitted, the contention that the decision was unreasonable cannot be judged by now determining whether the decision was either the "best" or even "preferable" decision. The correct inquiry is whether the decision was within power and not unreasonable in the relevant sense.
An argument advanced by Mr Osman-Kerim was that Mr Sidaros had, during February 2102, advanced an alternate proposal which, he submitted, had been rejected by the prosecutor. It was submitted by the prosecutor that, for several reasons, that submission failed to identify any proper basis for challenge to the 24 January decision.
First, the proposals by Mr Osman-Kerim and his plumber were irrelevant to the question as to whether the impugned decision was unreasonable given that they were proposals advanced well after the decision was made. Mr Osman-Kerim had not demurred to the critical direction when it was shown to him in draft.
Secondly, some of the measures that were taken by or on behalf of Mr Osman-Kerim did not prevent the liquid waste flowing into the SRT. Mr Bourne's evidence that subsequent overflows from the SRT occurred demonstrated that the work failed to achieve its stated purpose.
Thirdly, the proposals advanced seem to assume that the bunds constructed within the factory building would be adequate to prevent the escape of contaminated liquids whereas evidence, earlier recorded, had shown that the bund in the storage tank and wash bay area had overtopped on prior occasions.
Fourthly, the proposal by Mr Osman-Kerim's plumber to place concrete around the eastern door of the factory building was anticipated by Mr Bourne to fail and, as Mr Osman-Kerim acknowledged, did in fact fail to arrest the flow of liquid from the building.
Fifthly, to the extent that other proposals were advanced by or on behalf of Mr Osman-Kerim, they were articulated on a conceptual basis but not followed up with detail, despite Mr Bourne's request for details so that the proposals could properly be considered.
A second basis upon which Mr Osman-Kerim contended that the decision to impose Direction 3a was "grossly unreasonable" was the financial burden that it imposed upon the Company. However, as the prosecutor submits, an obligation to prevent pollution was an obligation imposed by the EPL granted to the Company and by s 120 of the Act, rendering it an offence to pollute waters. Costs incurred in addressing a pollution event are an incident of carrying on the Company's business. First and foremost, the consideration to be brought to bear when determining to issue a notice under s 91 is the achievement of its objects. Those objects are sought to be achieved by giving power for urgent or prompt measures to be taken, necessary to avoid pollution occurring or the imminent likelihood of pollution occurring (Lismore City Council v Ihalainen [2013] NSWLEC 149; 198 LGERA 47 at [59]).
Reliance by Mr Osman-Kerim on the exceptionally high rainfall that occurred after 24 January as manifesting the unreasonable cost burden that is asserted is an argument based on hindsight. It provides no sound basis upon which to assert that the decision made on 24 January 2012 was unreasonable.
As I have earlier recorded, one of the bases upon which Mr Osman-Kerim submitted that the decision to issue the 24 January Notice was unreasonable was that the prosecutor failed to seek and to consider appropriate engineering advice in order to determine the best means of avoiding waste liquids contaminating the nearby watercourse and South Creek. The prosecutor submits that there is no substance in that submission and that it cannot ground the challenge to validity that is made by Mr Osman-Kerim. It submits that the submission involved a misconception of a prosecutor's power, the circumstances of exercise of the power and the concept of unreasonableness as a basis upon which to challenge the exercise of power by an administrative decision-maker.
The power conferred by s 91 is, as already stated, a power the exercise of which directed to the prevention or minimisation of environmental harm. As the circumstances in which the power was exercised in the present case demonstrates, it will often be exercised in emergency or urgent circumstances. In those circumstances it will often, if not usually, require the exercise of that power without the benefit of engineering evidence or upon expert advice directed to competing considerations, such as undertaking a cost/benefit analysis. It is a power that allows a range of effectively evaluative considerations made by staff whose function it is to respond to the occurrence of a pollution incident. The decision to be made by reference to the section falls within the prosecutor's "area of decisional freedom" provided that it is not arbitrary, capricious or without commonsense (Minister for Immigration and Border Protection v Singh [2014] FCAFC 1; 231 FCR 437 at [44]).
Moreover, had the prosecutor sought the advice of Mr Forrest at the time, it must be assumed that his response would have been consistent with the evidence that he gave. That evidence was to the effect that the requirement of Direction 3a was effective to address the pollution incident and an appropriate response, at the time. That, so it was submitted, was a sufficient answer to Mr Osman-Kerim's submission that appropriate engineering advice should have been sought. It is therefore a sufficient basis upon which to conclude that the decision was within power, absent the rejection of an alternate response that rationally was required to be preferred. For reasons already stated, none of the suggested alternatives, advanced well after the relevant decision was made, identify a basis upon which it was unreasonable to impose Direction 3a on 24 January.
I have accepted that the power available under s 91(1) will, more often than not, be required to be exercised in circumstances that require prompt action. The overriding power provided in s 91(2) for the present prosecutor to give a notice under s 91(1) in an emergency, even if it is not "the appropriate regulatory authority" with respect to the particular pollution incident, speaks against a general obligation to obtain expert advice before giving such notice. That is particularly relevant in the present case because neither of the expert engineers called at trial gave evidence to the effect that the determination to give Direction 3a necessitated prior input of an expert in order to understand its implications. Clearly, compliance with that direction did not involve the erection of any structure requiring engineering input nor did it involve the assessment of the stability or integrity of any existing structure in order to give effect to the direction.
I accept that the cost of compliance, the capacity to comply with a requirement imposed (objectively judged) and the input of specialist skills may be relevant when determining whether a direction imposed by a notice is reasonable in the relevant sense. However, there are two important limitations upon that acceptance. First, the relevance of those factors can only be determined by reference to the facts and circumstances pertaining at the date of the decision to give the relevant direction. Second, each of the factors require objective assessment rather than by assessment directed to the circumstances of the particular recipient. Thus, the financial burden to be considered would only be relevant to demonstrate that there was an alternate measure to be taken than that directed, which was equally effective in addressing the pollution event, and where, at the date of decision, the cost of complying with the direction was disproportionate to the cost of implementing the alternative. Even a disproportionate cost of compliance would be a factor to be considered rather than a sole determinant that a decision was unreasonable.
I have already indicated that if a challenge to a decision was made on the basis of capacity to comply with the direction given, an objective assessment would be necessary. The assessment would be 'can it be done by a competent operator' rather than whether 'the recipient can do it'. Likewise, whether expert input is required to formulate the direction and assess its implications will depend upon the apparent complexity of the action required by the direction that is in contemplation. However, once again, all the circumstances would need to be considered.
In addressing the principles of reasonableness in the context of administrative decision-making, Mr Osman-Kerim characterised the power of a court to review such a decision too broadly. I accept that as a consequence of the decision of the High Court in Li the bar to a successful challenge on that ground is not necessarily set at the height of a decision that is irrational or bizarre such that it must be described as so unreasonable that no reasonable person could have arrived at it. However, the High Court made clear that review on the ground that a decision was unreasonable did not permit a reviewing court, in effect, to conduct a merit review. As French CJ stated in the opening passage of [30]:
"The requirement of reasonableness is not a vehicle for challenging a decision on the basis that the decision-maker has given insufficient or excessive consideration to some matters or has made an evaluative judgment with which a Court disagrees even though that judgment is rationally open to the decision-maker. Gleeson CJ and McHugh J made the point in Eshetu that the characterisation of somebody's reasoning as illogical or unreasonable, as an emphatic way of expressing disagreement with it, 'may have no particular legal consequence'."
In the same case the plurality said at [66] (omitting citation of authority):
"This approach does not deny that there is an area within which a decision-maker has a genuinely free discretion. That area resides within the bounds of legal reasonableness. The courts are conscious of not exceeding their supervisory role by undertaking a review of the merits of an exercise of discretionary power. Properly applied, a standard of legal reasonableness does not involve substituting a court's view as to how a discretion should be exercised for that of a decision-maker."
To similar effect are the observations of Gageler J in the same case where his Honour said at [105] (omitting citation of authority):
"Review by a court of the reasonableness of a decision made by another repository of power is 'concerned mostly with the existence of justification, transparency and intelligibility within the decision-making process' but also with 'whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law'."
The decision of the High Court in Li was considered by the Full Federal Court in Minister of Immigration and Border Protection v Singh. In a joint judgment the Court said at [45]:
"In circumstances where no reasons for the exercise of power, or for a decision, are produced, all a supervising court can do is focus on the outcome of the exercise of power in the factual context presented, and assess, for itself, its justification or intelligibility bearing in mind that it is for the repository of the power, and not for the court, to exercise the power but to do so according to law."
For reasons that I have earlier given, the decision to give the 24 January Notice met the criteria for a pollution incident and the requirement for clean-up action to which s 91(1) is directed. Therein lies its legal "justification" (Li at [105]).
In his submissions, Mr Osman-Kerim focussed upon that part of Direction 3a requiring the Company to "ensure" that the retention tank did not fill in excess of 30 percent of its capacity. Focus upon that part of the direction was too limiting. The intelligibility of the Direction required it to be read and considered as a whole. Properly understood, the Direction required:
1. the monitoring of liquid waste within the SRT and adjacent stormwater pit;
2. when, as a consequence of monitoring, the level of liquid waste was in excess of 30 percent of capacity, steps were required to be taken to dispose of the excess so that the level returned to a level that was at or below 30 percent.
The purpose and intended effect of Direction 3a is made apparent when read in the context of Directions 1 and 2. Direction 1 required isolation of the pit so that its contents did not discharge through the outlet pipe and Direction 2 clearly intended that there would be run-off from the factory building directed to the SRT. That process, coupled with any rainfall that might reasonably have been anticipated as at 24 January 2012 was predicted to be captured in the SRT. The contemplation was that the 30 percent level may well be exceeded but with an appropriate monitoring regime, sufficient capacity would be preserved to capture run-off so that volume above 30 percent could be accommodated without surcharge but then removed.
I do not accept the submission of Mr Osman-Kerim that the Direction was unduly onerous upon the Company because, at the instant at which capacity of the SRT exceeded 30 percent, he was potentially guilty of an offence against s 91(5). Reading Direction 3a as a whole, an offence was committed only if he failed appropriately to monitor the level of liquid waste within the SRT and, having done so, then failed with appropriate promptitude to reduce the liquid waste to the 30 percent level. The evidence establishes that he did neither.
I do not overlook the expert engineering evidence given by Mr Forrest and Mr Ryan. Their evidence is referred to at [165]-[176]. The essence of the evidence given by Mr Ryan is summarised at [175]. Mr Forrest's concession that the direction to isolate the SRT and maintain the level of liquid waste in the SRT at or below 30 percent of capacity was "a good solution in an emergency situation" and that the alternate solution posited by him would also require removal of retained liquid waste by tanker trucks, satisfies me that there was no difference of present relevance between the experts. That being so, it is unnecessary to resolve differences of detail between them, being detail that is not directed to the fundamental consensus that they reached.
There is a further observation to be made in response to the contention that Mr Osman-Kerim's access to the Premises was limited for a time following the fire that had occurred on 23 January. Clearly, officers of the prosecutor were able to gain access to the Premises for the purpose of pumping out the SRT. I have accepted the evidence of Mr Bourne that he offered to assist Mr Osman-Kerim to gain access to the Premises should the police or fire authorities seek to restrict that access. This offer was not taken up. While Mr Osman-Kerim originally suggested that no such offer was made, his final response to the proposition that it had was, as I have earlier recorded, that Mr Bourne "may have said that". Given that the prosecutor did in fact gain access to the areas external to the damaged factory building for the purpose of sealing, observing liquid in the SRT and then having excess liquid pumped out, it is apparent that had the offer made by Mr Bourne been accepted by Mr Osman-Kerim, the Company would have had access necessary to comply with Direction 3a. For that reason Mr Osman-Kerim cannot properly contend that the Direction was unreasonable on the basis that lack of access prevented him complying with the Direction.
The reasons that I have expressed found my conclusion that the challenge to the validity of the 24 January Notice, on the basis that the decision to give it was unreasonable, cannot be supported. The decision to give Direction 3a was within a range of acceptable responses to the pollution incident and is defensible in the circumstances that existed on 24 January, thereby engaging the provisions of s 91(1).
Moreover, Mr Osman-Kerim advanced no evidence to demonstrate that he was unable to monitor the liquid level in the SRT because of the weather or for any other reason, nor did he adduce evidence indicating that because of the weather or volume of liquid on the site, tankers were unable to attend the Premises and remove the contents of the SRT. His evidence establishes only that he did as much as he was prepared to do or able to do because of his financial circumstances.
I have earlier referred to the obligation imposed by Direction 3a to monitor the level of liquid in the SRT so as to determine when removal of liquid was required. Evidence from the prosecutor demonstrates that there were a number of occasions during the charge period on which the SRT overflowed. That circumstance casts considerable doubt upon whatever monitoring regime had been put in place. Moreover, on those occasions upon which Mr Osman-Kerim did arrange for tankers to attend and remove liquid waste, the volume removed by him could not have reduced the level in the SRT to 30 percent capacity. Why the tankers could not have returned to reduce the capacity of stored liquid to the required level was not explained.
Although cost was not identified in final submissions as the basis upon which non-compliance was sought to be excused, costs of compliance was one of the bases upon which it was submitted that the Direction was unreasonable. I have already addressed that submission. To the extent that cost might be thought to be relevant to the reasonable excuse defence, the evidence is not persuasive, even on the balance of probabilities standard. Indeed, it is conflicting. At one point in his record of interview (Exhibit P, question 406), Mr Osman-Kerim was asked whether the Company was in a financial position to comply with the requirement in January 2012. The recorded answer was "Always. No problem. There was no problem. This question - we didn't have drama."
However, when being pressed by Mr Bourne in January, February and March 2012 to take action to remove liquid waste from the SRT, Mr Osman-Kerim complained that he could not obtain the services of contractors because their bills had not been paid and that it was costing too much to remove the material. In evidence, he stated that, at the time, he did not have enough money to meet ongoing pump-out costs (Tcpt 405:47-49).
At [115] I have set out a conversation that took place between Mr Bourne and Mr Osman-Kerim on 5 March 2012 in which Mr Osman-Kerim's financial means to comply with the 24 November Notice was raised and in which he was asked to provide financial statements demonstrating his position. As I have recorded at [117], no financial information relating to the Company was provided. When asked in the course of his record of interview whether the Company was in a good financial position, Mr Osman-Kerim indicated that the financial position of the Company was a private matter (Exhibit B, question 408) which, in the course of cross-examination at trial, he explained as indicating that he did not wish to disclose the financial position of the Company in the course of the interview (Tcpt 424:12-14). Upon being further questioned, he stated that it was not the prosecutor's business to know the Company's financial position in January and February 2012. He stated that in February 2012 he decided that no further money would be spent on emptying out the SRT because he believed it was costing too much money for nothing and that the prosecutor had made a mistake in issuing the Direction in the terms that it did (Tcpt 427:13-29).
On the evidence that I have identified, Mr Osman-Kerim has not established that there were physical or practical difficulties that, objectively judged, prevented him from complying with the 24 January Notice. It has not been established that the Company sought to comply with the obligation imposed upon it. Rather, Mr Osman-Kerim's own evidence established that he chose not to comply because of the costs being incurred and the fact the he considered the prosecutor to be mistaken in giving Direction 3a.
For these reasons, it has not been established that the Company had a reasonable excuse for failing to comply with the 24 January Notice.
I am not satisfied, on the balance of probabilities, that:
1. the Company had a reasonable excuse for not complying with Direction 3a in the 24 January Notice; or that
2. Mr Osman-Kerim, as a director of the Company, used all due diligence to prevent the Company from contravening the 24 January Notice.
I am therefore satisfied beyond reasonable doubt that the Company, by its failure to comply with the 24 January Notice given to it under s 91(1) of the Act, has contravened s 91(5) of the Act. I am also satisfied beyond reasonable doubt that, by operation of s 169(1) of the Act, Mr Osman-Kerim has also contravened s 91(5) of the Act.