Environment Protection Authority v Sydney Drum Machinery Pty Ltd

Introduction

1. 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).
2. 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.
3. 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)).
4. 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)).
5. 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".
6. 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.
7. 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.

Relevant statutory provision

1. 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.
2. 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."
3. 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."
4. 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".
5. 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."

Facts pertaining to the offences charged

1. 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.
2. 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.

The Premises and their use

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

The EPL

1. 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".
2. 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."
3. 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).
4. 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.

Delivery of containers to the Premises contrary to the suspension notice

1. 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.
2. 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.
3. 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.

Inspections of the Premises prior to the charge period

1. 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.
2. 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.
3. 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).
4. 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".

Water samples tested

1. 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.
2. 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."
3. 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."

Further evidence: the fire of 23 January 2012

1. 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.
2. 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.
3. 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.
4. 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."

Evidence of Mr Osman-Kerim

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.

Expert evidence

1. 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.
2. 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.
3. 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.
4. 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.
5. 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).

The offence against s 91 of the Act: 17 January Notice

1. 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).
2. 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).
3. For these reasons, I am satisfied beyond reasonable doubt that each of elements (i), (ii) and (vii) are established.

Element (iii) of the offence: the Company as occupier of the Premises

1. 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.
2. 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."
3. 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.
4. 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.

Element (iv) of the offence: reasonable suspicion that a pollution event has occurred

1. 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.
2. 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).
3. 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.

Reasonable suspicion of a pollution incident

1. 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."
2. 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.
3. 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."
4. 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".
5. 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".
6. 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).

Clean-up action related to the pollution event

1. 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.
2. 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.
3. 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.
4. 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.

Terms of notice vague and uncertain

1. 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.
2. 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.
3. 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).

Failure to take account of relevant considerations

1. 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.
2. 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.
3. 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.

Reasonable excuse

1. 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].
2. 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.
3. 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.
4. 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".
5. 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.
6. 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).

Section 169(1) of the Act

1. 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.
2. 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).
3. 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.

Conclusion in respect of the 17 January Notice

1. 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.
2. 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.
3. 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.

The offence against s 91 of the Act: 24 January Notice

1. 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.
2. 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.
3. 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."
4. 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.
5. 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.

The challenge to validity of the 24 January Notice: defendant's submission

1. 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.
2. 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".
3. 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.
4. 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."

The prosecutor's submissions

1. 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]).
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.

Consideration

1. 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.
2. 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).
3. 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.
4. 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.
5. 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.

Reasonable excuse

1. 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.
2. 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.
3. 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).
4. 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]".
5. 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.

Section 169(1)(c)

1. 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.

Conclusion on offence by reference to 24 January Notice

1. 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.
2. 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.
3. 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.
4. 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.
5. 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.

Orders

1. 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.

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