Environment Protection Authority v Sydney Water Corporation

Environment Protection Authority v Sydney Water Corporation - [2021] NSWLEC 17 - NSWLEC 2021 case summary — Zoe

[6]

Environment Protection Licence No. 378

At all relevant times, Sydney Water held Environment Protection Licence No. 378 ('EPL 378'), which authorises the carrying out of sewage treatment in excess of 30,000 ML per annum at the System.
Condition L1 of EPL 378 provides as follows: "L1 Pollution of waters L1.1 Except as may be expressly provided in any other condition of this licence, the licensee must comply with section 120 of the Protection of the Environment Operations Act 1997. L1.2 Subject to the conditions of this licence, sewage must not be discharged from the components of the reticulation system except from those components identified on the system map. L1.3 Notwithstanding the provisions of the condition above, this licence does not permit the pollution of waters at any time during dry weather from: a) uncontrolled overflows, or b) directed overflows other than from sewage pumping stations, if a cause of the pollution is a failure to: i) operate any part of the reticulation system in a proper and efficient manner; or ii) maintain any part of the reticulation system in a proper and efficient condition. L1.4 This licence does not permit the pollution of water at any time during dry weather from any pumping station. This condition is effective from 1 July 2006."
The effect of the above conditions and the definitions of "wet weather" and "dry weather" contained in EPL 378, is that sewage discharges were permitted from the Pumping Station via the Overflow Structure during "wet weather" periods (being periods where more than 10mm of rain has been measured at a rain gauge in the catchment area of the Pumping Station within the previous 24 hours) but not "dry weather" periods (being periods where less than 10mm of rain has been measured at a rain gauge in the catchment area of the Pumping Station within the previous 24 hours).
Relevantly, the period directly after the Incident when sewage was discharged from the Pumping Station prior to 4.00pm on 21 October 2018 constituted "wet weather", so the discharge of sewage that occurred prior to 4.00pm on 21 October 2018 (as detailed below) was lawful under EPL 378 (the 'Wet Weather Discharge'). The period after 4.00pm on 21 October 2018 constituted "dry weather" so the discharge of sewage (being the First Discharge and the Second Discharge) was unlawful under condition L1.4 of EPL 378.

[12]

The Wet Weather Discharge, First Discharge, and Second Discharge

A summary of the approximate sewage discharges that occurred from the Overflow Structure into Toongabbie Creek between the Incident on the morning of 21 October 2018 and the cessation of all sewage discharges from the Overflow Structure on 27 October 2018 is set out below. This summary includes the Wet Weather Discharge (that occurred for approximately eight and a half hours prior to the First Discharge) which was permitted by EPL 378 and is not the subject of these proceedings. Date Time Total duration Volume (litres) Discharge not the subject of these proceedings - Wet Weather Discharge 21.10.2018 07:22 - 16:00 8 hours 38 minutes Approx. 8,600,000 Discharges the subject of these proceedings - First Discharge 21.10.2018 16:00 - 23.59 10 hours Approx. 1,900,000 22.10.2018 00.00 - 02:00 22.10.2018 08:00 - 18:00 10 hours 590,972 23.10.2018 08:00 - 09:35 1 hour 35 minutes 115,761 23.10.2018 20:30 - 21:35 1 hour 5 minutes 158,039 Estimated total volume of the First Discharge: Approx. 2,764,772 Discharges the subject of these proceedings - Second Discharge 26.10.2018 19:57 - 20:34 37 minutes 5,572 27.10.2018 10:40 - 13:15 2 hours 35 minutes 29,978 Estimated total volume of the Second Discharge: 35,550 Estimated total volume of the First Discharge and the Second Discharge: Approx. 2,800,322

[20]

Further evidence

Ms Demo, Head of Network Regional Operations and Maintenance at Sydney Water, deposed to the characteristics of the System and the Pumping Station and that there was an extensive approval process involved to upgrade the Pumping Station which had commenced in 2017 (prior to the Incident). Ms Demo noted the importance of obtaining Independent Pricing and Regulatory Review Tribunal ('IPART') approval for capital expenditure such as the upgrade of the Pumping Station.
Ms Demo also deposed to the actions taken by Sydney Water following the Incident, to investigate and respond to the Incident. She provided particular details about the safety constraints faced by Sydney Water when responding to the Incident (stemming from concerns regarding the stability of the Pumping Station and surrounding ground), which impacted the responsive actions that could be undertaken by Sydney Water.
Mr Fairbairn, Head of Wastewater and Environment at Sydney Water, deposed to Sydney Water's organisational approach to the management of environmental risk, including key management frameworks, policies and procedures, and auditing.
Mr Fairbairn deposed that Sydney Water recognised and accepted that environmental harm was caused, and that it had "fallen short of what is reasonably required to appropriately protect the environment". Mr Fairbairn expressed remorse and contrition on behalf of Sydney Water, and also referred to a letter written by Sydney Water's Managing Director, Mr Roch Cheroux, in which he expresses his "sincere regret" about Sydney Water's response to the collapse of the dry well in the Pumping Station.
Mr Fairbairn sought to make a distinction between the Offences the subject of these proceedings and other incidents that have been the subject of other court proceedings, because these proceedings "resulted from" the "catastrophic and unprecedented failure of the Pumping Station". He deposed that these Offences did not represent "habitual conduct" of Sydney Water, and that Sydney Water had a "track record" of cooperating with regulatory authorities including the EPA.
Mr Fairbairn noted that Sydney Water had taken immediate steps to mitigate environmental harm arising from the collapse of the dry well in the Pumping Station, as well as further steps to ensure continued and improved environmental performance. This included: 1. Undertaking a manual inspection of asset elements at 85 pumping stations which were constructed in the same manner as the Pumping Station at the System, and rating the condition of asset elements; 2. Initiating the rectification of those asset elements at the System rated as most in need of rectification (noting these asset elements have either been rectified, are the subject of approval for rectification, or will be rectified as soon as practicable); and 3. Implementing new processes for the clean-up of overflows and undertaking associated staff training, which have resulted in an "85% reduction in the average time to manage and close out pollution incidents over the last 24 months."
Finally, Mr Fairbairn outlined a number of community projects undertaken by Sydney Water which were said to illustrate Sydney Water's broader commitment to water quality and protecting the environment from harm. This included: upgrading and installing new infrastructure to reduce environmental impacts of operations; undertaking education programs relating to waterway systems and current water issues; supporting initiatives to reduce the use of plastic bottles; and undertaking river rehabilitation initiatives.

[21]

Principles of sentencing

In imposing proportionate and appropriate sentences for the Offences, the instinctive synthesis process of sentencing necessitates the Court's consideration of the objective circumstances of the Offences and the subjective circumstances of the offender, Sydney Water: Veen v R (1979) 143 CLR 458; [1979] HCA 7 at 490; Veen v R (No 2) (1988) 164 CLR 465; [1988] HCA 14 ('Veen (No 2)') at 472. This process requires the Court to identify and weigh the significance of the factors relevant to sentence.
The Court must have regard to the legislative framework applicable to sentencing in relation to the Offences, which includes the purposes of sentencing as contained within s 3A of the Crimes (Sentencing Procedure) Act 1999 (NSW) ('Sentencing Act'); any aggravating, mitigating and other factors of relevance as set out in ss 21A and 22 of the Sentencing Act; the objects within s 3 of the POEO Act; and matters to be taken into account as required by s 241 of the POEO Act.
The purposes for which the Court may impose a sentence under s 3A of the Sentencing Act that are most relevant to the Offences are: "… (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, … (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to … the community."
Section 21A of the Sentencing Act sets out a number of aggravating and mitigating factors which the Court is to take into account when sentencing. An aggravating factor identified by the prosecutor as relevant in these proceedings is s 21A(2)(g): "the injury, emotional harm, loss or damage caused by the offence was substantial".
The mitigating factors in s 21A(3) that are most relevant in these proceedings include: "(a) the injury, emotional harm, loss or damage caused by the offence was not substantial, … (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, … (i) the remorse shown by the offender for the offence, but only if - (i) the offender has provided evidence that he or she has accepted responsibility for his or her actions, and (ii) the offender has acknowledged any injury, loss or damage caused by his or her actions or made reparation for such injury, loss or damage (or both), … (k) a plea of guilty by the offender (as provided by section 22 or Division 1A), …"
A prosecutor carries the onus of proving any aggravating factors beyond reasonable doubt, while an offender carries the onus of proving any mitigating factors on the balance of probabilities for the purposes of sentencing: R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at [27]. In this respect, although a plea of guilty entails acceptance that the elements of an offence have been proved beyond reasonable doubt, other facts taken into account during sentencing must be established: R v O'Neill [1979] 2 NSWLR 582 at [588]; Duffy v R [2009] NSWCCA 304 at [21].
For offences under the POEO Act, the Court is also to take into account the sentencing considerations found in s 241(1) of that Act (so far as they are relevant), namely: … (a) The extent of the harm caused or likely to be caused to the environment by the commission of the offence, (b) The practical measures that may be taken to prevent, control, abate or mitigate that harm, (c) The extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (d) The extent to which the person who committed the offence had control over the causes that gave rise to the offence, …

[25]

Extent of harm to the environment

The harm caused, or likely to be caused, to the environment by the commission of the Offences is relevant to determining the objective seriousness of the Offences and Sydney Water's culpability: s 241(1)(a) of the POEO Act; ss 21A(2)(g) and 21A(3)(a) Sentencing Act.
"Harm" is defined in the Dictionary to the POEO Act to include: "any direct or indirect alteration of the environment that has the effect of degrading the environment and, without limiting the generality of the above, includes any act or omission that results in pollution."
"Pollution" includes "water pollution", and "water pollution" or "pollution of waters" is relevantly defined in the Dictionary to the POEO Act to include: 1. introducing any matter into waters so that the physical, chemical or biological condition of the waters is changed; or 2. placing in or otherwise introducing into waters any matter that makes, or is likely to make, the waters unclean, noxious, poisonous, impure, detrimental to the health, safety, welfare of persons, poisonous or harmful to aquatic life or fish.
In relation to environmental offences, the concept of harm is broad and includes both actual harm and potential harm. In Environment Protection Authority v Waste Recycling and Processing Corporation [2006] NSWLEC 419; (2006) 148 LGERA 299 ('Waste Recycling'), Preston J stated: "[145] Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 and Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [175]. Harm should not be limited to measurable harm such as actual harm to human health. It can also include a broader notion of the quality of life. [146] Harm can include harm to the environment and its ecology. Harm to an animal or plant not only adversely affects that animal or plant, it also affects other biota that have ecological relationships to that animal or plant: Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34 (6 February 2006) at [174]. [147] Harm can be direct or indirect, individual or cumulative. Activities that contribute incrementally to the gradual deterioration of the environment, even when they cause no discernable direct harm to human interest, should also be treated seriously. [148] The culpability of the defendant depends in part on the seriousness of the environmental harm. Sentencing courts have exercised their discretion in relation to penalty on the principle that the more serious the lasting environmental harm involved, the more serious the offence and, ordinarily, the higher the penalty: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 701; 39. If the harm is substantial, this objective circumstance is an aggravating factor: s 21A(2)(g) of the Crimes (Sentencing Procedure) Act 1999 NSW. [149] The fact that the environment harmed by the offender's conduct was already disturbed or modified is not a mitigating factor: State Pollution Control Commission v White Wings Ltd (unreported, Land and Environment Court NSW, Bignold J, No 50129 of 1991, 1 November 1991) at p 4; Environment Protection Authority v Ecolab Pty Ltd (2002) 123 LGERA 269 at [14]; Environment Protection Authority v Coggins (2003) 126 LGERA 219 at [18]; Environment Protection Authority v Abigroup Contractors Pty Ltd [2003] NSWLEC 342 (15 December 2003) at [24]; Environment Protection Authority of New South Wales v Arenco Pty Ltd [2006] NSWLEC 244 (9 May 2006) at [26]."
The agreed facts before the Court (as set out at [55]-[63] above), disclose that the parties agree in relation to the existence of actual, likely and potential harm caused both to the environment and the community by the commission of the Offences the subject of these proceedings. The extent of that harm, however, is a matter of controversy.
In making the following comments, I am conscious that the First Discharge and the Second Discharge constitute, and the Court is considering, two separate charges. However, for concision and consistent with the approach in the statement of agreed facts, for present purposes, the harm caused by the commission of the Offences is considered together.

[26]

Consideration of receiving environment

The prosecutor submits that the fact the receiving environment had likely already been harmed by the Wet Weather Discharge cannot be considered a mitigating factor: Environment Protection Authority v Ecolab Pty Limited [2002] NSWLEC 206; (2002) 123 LGERA 269 ('Ecolab') at [14]; Environment Protection Authority v Sydney Water Corporation [2019] NSWLEC 100 ('EPA v Sydney Water 2019') at [253]. While initially characterising the fact that the receiving environment had already been harmed as "irrelevant", in oral submissions the prosecutor accepted that the state of the receiving environment was relevant to the Court's assessment of the harm caused by the Offences (Tcpt, 11 February 2021 p 23(33-42).
Sydney Water submits that while Ecolab indicates the condition of the receiving environment is not to be taken into account in mitigation, Cowdry J held it was relevant to an assessment of harm. Sydney Water notes it is not being prosecuted for the harm to the environment that was caused by the Wet Weather Discharge, which polluted Toongabbie Creek near its confluence with Parramatta River with approximately 8,600,000 litres of sewage. Sydney Water submits that the appropriate approach in the circumstances is to adopt the approach of Pain J in Environment Protection Authority v Sydney Water Corporation [2020] NSWLEC 153 ('EPA v Sydney Water 2020') at [56], and ask whether the First Discharge and the Second Discharge made the "already compromised environment any worse", noting that "[t]o do otherwise is to assess sentencing on the basis of circumstances not the subject of the charge".
I accept that the fact Toongabbie Creek and Parramatta River were polluted by the Wet Weather Discharge does not mitigate against the objective culpability of Sydney Water's conduct in commissioning the Offences: Ecolab at [14]; see also EPA v Sydney Water 2019 at [253] and cases cited therein.
I accept Sydney Water's submissions that the appropriate approach to assessing the extent of harm is to compare the receiving environment before and after the pollution that is the subject of the offence: EPA v Sydney Water 2020 at [56]. I consider that the fact Toongabbie Creek and Parramatta River had already been harmed by the Wet Weather Discharge is relevant, and that the correct comparison when assessing the extent of the harm caused by the Offences is between the condition of the receiving environment at 4.00pm on 21 October 2018 when the First Discharge started and the condition of the receiving environment after the First Discharge and then the Second Discharge.

[27]

Characterisation of harm

The prosecutor submits that the extent of the harm to the environment and the community that was caused by the Offences was substantial, while noting that the extent of the harm caused by the First Discharge was greater than the harm caused by the Second Discharge. The prosecutor submits that the agreed harm extended over a "significant distance" and lasted over a week. The prosecutor also notes the extent of the clean-up that was required to be undertaken, including manual cleaning and physical obstructions and installations in Toongabbie Creek and Parramatta River.
In oral submissions, the prosecutor highlighted the relatively large volume of sewage that was discharged during the Offences, in comparison to the volumes that have been discharged in previous pollution events involving Sydney Water and considered by judges of this Court. The prosecutor also highlighted similarities between the harm caused by the Offences and the characteristics of harm considered by Preston J in Environment Protection Authority v Sydney Water Corporation [2015] NSWLEC 80 ('EPA v Sydney Water 2015') at [62], in relation to the nature of the pollutant, duration of discharge and interference with public amenity and enjoyment.
Sydney Water submits that Court could not be satisfied that the extent of the harm caused was substantial. As the First Discharge and the Second Discharge occurred in an "already lawfully polluted" receiving environment following the Wet Weather Discharge, Sydney Water submits that it is not possible to quantitatively or qualitatively identify the harm caused to the environment as a result.
In contrast to the prosecutor, Sydney Water characterises the extent and distance of the harm caused as "relatively limited". Sydney Water sought to differentiate the Offences from previous proceedings, noting that the Offences resulted in harm lasting for days and over hundreds of metres, in comparison to harm lasting weeks and extending over many kilometres in previous proceedings.
I have considered previous cases relevant to the characterisation of harm to the environment. In EPA v Sydney Water 2015, Preston J assessed the nature of the pollutant, the duration of the pollution event, the difference in the marine environment that received the pollutant (being near a cliff face) compared to the marine environment that ought to have received the pollutant (being the deep ocean), and the interference with public amenity and enjoyment, and found that the harm caused by the pollution event was substantial: at [62]. A similar finding was made by Pepper J in EPA v Sydney Water 2019, who, while accepting the receiving environment was already modified and degraded, found that the extent of the environmental harm caused, or likely to be caused, was substantial (and thus an aggravating factor for the purposes of s 21A(2)(g) of the Sentencing Act) on the basis of the characteristics of the pollution caused by the offences: at [259]-[263].
Other cases have specifically considered harm in circumstances where a prior pollution event has occurred (which is not the subject of the offence). In EPA v Sydney Water 2020, Pain J concluded that in circumstances where there had been a lawful pre-existing pollution event, the prosecutor had not established beyond reasonable doubt the likelihood of substantial "increased harm to the environment and greater risk to human health" as a result of the offence: at [61]. Pepper J came to a similar conclusion in Environment Protection Authority v Sydney Water Corporation [2021] NSWLEC 4 ('EPA v Sydney Water 2021'), finding that absent specific evidence adduced by the EPA of the extent of the actual and likely harm caused by the conduct constituting the offence, it could not be found beyond reasonable doubt that the actual and likely harm to the environment was substantial: at [157].
Considering these cases, it is clear that whether the harm (in particular the extent of the harm) caused by the Offences is substantial, depends on the factual evidence available about the characteristics of the pollution, and whether this evidence establishes the extent of the harm to the required standard of proof. Taking into account the agreed facts, I am satisfied that: 1. The receiving environment of Toongabbie Creek and Parramatta River was already polluted at the time of the First Discharge and the Second Discharge as a result of the Wet Weather Discharge introducing approximately 8,600,000 litres of sewage into the water; 2. Each of the First Discharge and the Second Discharge caused further pollution of the waters of Toongabbie Creek and Parramatta River through the introduction of 2,800,322 litres of sewage; 3. This resulted in actual, potential and likely environmental harm including changes to the chemical and biological condition of the waters of Toongabbie Creek and Parramatta River; 4. Without the First Discharge and the Second Discharge, the harm caused by the Wet Weather Discharge may have been reduced. In this respect, the concentration of ammonia may have been lower and therefore less toxic to aquatic organisms, and dissolved oxygen concentrations may have been higher and recovered more quickly, causing less harm to fish and other aquatic organisms.
However, I am not satisfied that the evidence about the extent of the harm caused by the First Discharge and the Second Discharge establishes beyond reasonable doubt that this harm was substantial. Further, I consider that the harm caused by the Second Discharge is not as serious as the harm caused by the First Discharge.
In circumstances where the receiving environment has already been polluted, the attribution of harm between the Wet Weather Discharge and the First Discharge and the Second Discharge (which involved the addition of approximately a further third in volume of sewage) is difficult. As set out in the statement of agreed facts, the fish kill could not be attributed between the discharges the subject of the Offences and the Wet Weather Discharge but actual harm "may have been" reduced without the First Discharge and the Second Discharge. I consider that this uncertainty militates against a finding that the harm caused by the First Discharge and the Second Discharge was substantial.
Moreover, I consider that while some evidence of harm has been provided by the parties in the statement of agreed facts, it is not sufficiently specific to the First Discharge and the Second Discharge and thus it cannot be found beyond reasonable doubt that this harm was substantial: EPA v Sydney Water 2021 at [157].
Finally, undertaking an assessment similar to that in EPA v Sydney Water 2015, I consider that the nature of the pollutant (where the First Discharge involved approximately 2,764,772 litres of sewage and the Second Discharge involved 35,550 litres of sewage), the duration of the discharge events (being a cumulative total of 22 hours and 40 minutes for the First Discharge and 3 hours and 12 minutes for the Second Discharge), the receiving environment (noting Sydney Water is able to discharge sewage from the Overflow Structure during wet weather events), and the interference with public amenity and the environment (where there was potential harm to recreational users of Toongabbie Creek and Parramatta River), support my findings that while harm was caused, it was not substantial.
This finding is relevant in relation to both s 241(1)(a) of the POEO Act and that s 21A(2)(g) of the Sentencing Act.
I note that the actual, likely and potential harm caused by the First Discharge and the Second Discharge was likely not as serious as that caused by the Wet Weather Discharge, but as stated above, the Wet Weather Discharge is not the subject of these proceedings.

[29]

Control over the causes that gave rise to the Offences

The extent to which Sydney Water had control over the causes which gave rise to the Offences is a factor relevant to the objective seriousness of the Offences. The parties agree that the First Discharge and the Second Discharge (that gave rise to the Offences) were caused by "the collapse of the inner wall of the Pumping Station". For clarity, Sydney Water does not concede the antecedent cause of the collapse of the inner wall of the Pumping Station, if that was to be relied upon by the prosecutor.
The prosecutor submits that as owner, occupier and user of the Pumping Station, Sydney Water was the only person who had legal, physical and technical ability to undertake inspections that might have resulted in the identification of the degraded condition of the Pumping Station and the undertaking of appropriate remedial action that may have averted the collapse of the inner wall of the Pumping Station.
While not obvious from its written submissions, in oral submissions Sydney Water accepted that it had control over the cause of the "incident", being the collapse of the inner wall of the Pumping Station.
Sydney Water submits that a further cause which gave rise to the First Offence was the insufficiency of Sydney Water's pumping capacity, as, in its submission, the First Offence was not "inevitable" and could have been avoided if enough pumping capacity had been provided to divert sewage inflows away from the Pumping Station. Sydney Water also submits that its control over pumping capacity was mitigated by safety considerations (including FRNSW advice) that regulated the use of pumps.
The prosecutor refuted Sydney Water's suggestion that insufficiency in pumping capacity was a cause of the First Offence, on the basis that the small retention capacity and high volume of sewage meant that, even with more pumping and tankering capacity, Sydney Water "just would not have been able" to avert the First Discharge: Tcpt, 11 February 2021, p 34(46).
Sydney Water further submits that a cause which gave rise to the Second Offence was sewage seeping through gaps in the stop boards that had been placed at the Overflow Structure. Sydney Water accepted that the placement of the stop boards was within the control of Sydney Water.
I find that Sydney Water had control over the failure of the Pumping Station, as the owner and occupier of the System Pumping Station. As the collapse of the inner wall of the Pumping Station caused the First Discharge and the Second Discharge which gave rise to the Offences, as agreed by the parties, I take this control of the cause of the Offences into consideration in imposing a penalty.
In relation to the First Offence, it is clear that Sydney Water had control over the response to the failure of the Pumping Station including the provision of pumping capacity (through tankering and otherwise). While I take into consideration that there may be some mitigating circumstances due to safety constraints on the utilisation of the pumping capacity, I find that Sydney Water had control over pumping capacity and that this was a cause of the First Offence.
In relation to the Second Offence, I find (as accepted by Sydney Water) that the placement of the stop boards was within the control of Sydney Water, and was a cause of the Second Offence.

[30]

Foreseeability of the risk of harm to the environment

The extent to which Sydney Water could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the Offences is a relevant objective circumstance in sentencing: s 241(1)(c) of the POEO Act.
The prosecutor submits that even if the Court accepts Sydney Water's submission that the collapse of the inner wall and failure of the Pumping Station was "catastrophic and unprecedented", that does not lead to a conclusion that the risk of harm to the environment in the event of a failure of the Pumping Station was unforeseeable. The prosecutor provides a number of explanations for its position.
First, it is an agreed fact that the Pumping Station had a maximum pumping capacity of 628 litres per second and a wet well detention time of only 15 minutes during peak dry weather flows, which was "drastically" below Sydney Water's standard required minimum four hour response time for responding, implementing contingency measures and containing emergency situations.
Secondly, the prosecutor notes that it is an agreed fact that Sydney Water had no feasible contingency plan to prevent dry weather overflows if the Pumping Station failed, due to the fact that only 15 minutes of sewage flow could be held in the wet well of the Pumping Station and its catchment storage. In those circumstances, the prosecutor submits that it was foreseeable, that in the event the pumps failed during peak dry weather flows, a discharge of sewage into the environment would occur (regardless of what was the ultimate cause of the pumps' failure).
Thirdly, the prosecutor submits that the affidavit of Ms Demo illustrates that peaks in dry weather flows after wet weather were a "typical phenomenon" of the System, meaning that overflows during dry weather (after wet weather) were foreseeable.
Sydney Water submits that, although the prosecutor points to the lack of a "feasible contingency plan to prevent dry weather overflows if the Pumping Station failed", as set out in the affidavit of Ms Demo, Sydney Water had already commenced the process to replace the Pumping Station in 2017 but was constrained in its capacity to obtain funds to undertake capital expenditure by IPART. Sydney Water suggests this "highlights the pressure that is brought to bear on organisations like Sydney Water to strive for further and greater 'efficiencies' without regard to the costs beyond the dollar value".
I note that for harm to be foreseeable, the precise cause of an incident is not required to be foreseen: Baiada at [31]-[32]. In that case, the Court found that it was not necessary to foresee the defective welding of a fitting on an effluent pipe, but rather that any loss of integrity of the effluent pipe would (having regard to the inherent characteristics of the pipe and the fact there was a downhill watercourse) pollute the watercourse.
Given this, Sydney Water is not required to reasonably foresee the precise cause of the collapse of the inner wall of the Pumping Station (noting the cause remains an issue of contention between the parties and is not conceded by Sydney Water), or indeed that the inner wall would collapse causing the Pumping Station to fail. Rather, the issue is whether Sydney Water could have reasonably foreseen that harm would occur as a result of a failure of the Pumping Station.
I find, for the reasons submitted by the prosecutor, that it was reasonably foreseeable to Sydney Water that harm would occur as a result of a failure of the Pumping Station during peak dry weather flows causing the discharge of sewage. As noted above, Sydney Water is the owner and occupier of the System and has an extensive understanding of the nature of the System and the characteristics of the Pumping Station.
Sydney Water had already undertaken some steps to improve reliability of pumping infrastructure to address the foreseeable risks arising as a result of the detention time issue at the Pumping Station, prior to the Incident. The subsequent manual inspection of asset elements at 85 pumping stations which was taken in response to the Incident is an example of the precautions that a reasonable person in Sydney Water's position could have taken in response to foreseeable risks.
Sydney Water's submission regarding constraints on its capacity to fund capital expenditure does not change my finding about foreseeability. I consider this matter in further detail below in relation to practical measures.

[34]

General deterrence

General deterrence is a principal consideration in the imposition of a penalty for environmental offences. The prosecutor submits that there is need for general deterrence, as the prohibition against water pollution is a critical aspect of the regulatory framework for environment protection established by the POEO Act. Sydney Water accepts that the prohibition of pollution is a critical aspect of the regulatory framework for environmental protection established by the POEO Act.
In Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289; (2006) 148 LGERA 278, Preston J considered general deterrence in the context of environmental crime as follows: "[65] The sentence of the Court is an important denunciation of the conduct of the defendant. [66] The sentence must also serve as a public deterrent. It is the duty of the Court to see that the sentence which is imposed will operate as a powerful factor in preventing the commission of similar crimes by those who might otherwise be tempted by the prospect that only a light punishment will be imposed: R v Rushby (1977) 1 NSWLR 594 at 597-598. [67] This factor is particularly relevant to environmental offences. Persons will not be deterred from committing environmental offences by nominal fines: Environment Protection Authority v Capdate Pty Limited (1993) 78 LGERA 349 at 354; and Director General National Parks and Wildlife v Wilkinson [2002] NSWLEC 171 (27 September 2002) at [85] and [93]. [68] The deterrent effect of a fine must send an important message that laws requiring the conservation of the environment and compliance with approvals to carry out activities that may harm the environment, must be complied with. Also, the community must be satisfied that, by the Court's sentence, the offender is given his just desserts."
I consider that there must be an element of general deterrence embedded in the determination of the appropriate sentences to be imposed on Sydney Water, to ensure that large-scale sewage utilities operate in a manner that does not harm the environment.

[37]

Prior convictions

Prior convictions can be an aggravating factor, while a lack of prior convictions can be a mitigating factor in fixing where, within the boundaries set by the objective circumstances, the sentences for the Offences should lie: ss 21A(2)(d) and 21A(3)(e) Sentencing Act; R v McNaughton (2006) 66 NSWLR 566; [2006] NSWCCA 242 at [26]-[34]. In particular, previous criminal conduct may indicate that the Offences are indicative of continuing attitude of disobedience to the law or that Sydney Water has a propensity to reoffend (which may indicate more severe penalties should be imposed): Veen (No 2) at 477.
It is agreed that Sydney Water has a record of prior convictions for environmental offences. Some key elements of these prior convictions are summarised below. 1. In 1998, Sydney Water was convicted of contravening a condition of a pollution control licence as the result of a cliff face discharge at North Head Sewage Treatment Plant under the Pollution Control Act 1970 (NSW) and fined $100,000 plus the EPA's legal costs: Environment Protection Authority v Sydney Water Corporation [1998] NSWLEC 144; Environment Protection Authority v Sydney Water Corporation [1999] NSWLEC 60; 2. In 2000, Sydney Water was convicted of polluting waters with approximately 7,000 to 8,000 litres of aluminium sulphate when operating the West Camden Sewerage Treatment Plant contrary to the Clean Waters Act 1970 (NSW) ('Clean Waters Act') and fined $30,000 plus the EPA's legal costs: Environment Protection Authority v Sydney Water Corporation [2000] NSWLEC 80; 3. In 2000, Sydney Water was convicted of polluting waters in respect of a sewage overflow from a manhole in Helensburgh to Camp Creek contrary to the Clean Waters Act and fined $40,000 plus the EPA's legal costs: Environment Protection Authority v Sydney Water Corporation [2000] NSWLEC 156; 4. In 2015, Sydney Water was convicted of polluting waters and breaching an environment protection licence condition in relation to an incident at the Malabar Waste Water Treatment Plant under the POEO Act, and ordered to pay $157,500 to the Environmental Trust and Randwick City Council, the EPA's legal costs, and to comply with a publication order: EPA v Sydney Water 2015; 5. In 2019, Sydney Water was convicted of two offences of polluting waters and one offence of breaching an environment protection licence condition in relation to an incident at the South Western Sydney Ocean Outfall Sewer under the POEO Act, and ordered to pay $269,500 to the Environmental Trust and Bayside Council, the EPA's investigation and legal costs, and to comply with a publication order: EPA v Sydney Water 2019; 6. In 2020, Sydney Water was convicted of polluting water and breaching an environment protection licence condition (in respect of EPL 378) in relation to a sewage incident in the Lane Cove River, North Epping, and ordered to pay $127,000 to NSW National Parks and Wildlife Service, an additional monetary penalty of $18,000 that included a moiety to the prosecutor, the EPA's investigation and legal costs, and comply with a publication order: EPA v Sydney Water 2020; and 7. In 2021, Sydney Water was convicted of breaching an environment protection licence condition and not complying with a clean-up notice under the POEO Act and ordered to pay $100,000 to Sutherland Shire Council, an $85,000 additional monetary penalty of which $42,500 was a moiety to the prosecutor, the EPA's investigation and legal costs, and comply with a publication order: EPA v Sydney Water 2021.
The prosecutor submits that Sydney Water's prior convictions are significant and include convictions for similar offences. In contrast, Sydney Water points to the evidence of Mr Fairbairn (in his affidavit described at [66]-[70] above) that the collapse of the dry well in the Pumping Station (and presumably the Offences) is of a different character to previous incidents involving Sydney Water. Further, as noted above, Mr Fairbairn deposes that the fact there were multiple previous incidents does not reflect the "habitual conduct" of Sydney Water.
I note that the present Offences were committed approximately 18 months after the offences in EPA v Sydney Water 2019, three months after the offences in EPA v Sydney Water 2020, and at a similar time to the offences in EPA v Sydney Water 2021. I note that while the causes and circumstances of the prior offences were different to the Offences, the nature of the environmental harm was similar in that they relate to the discharge of sewage into the natural environment. I consider that these prior convictions are suggestive of a continuing attitude of disobedience of the law, or a propensity to reoffend, by Sydney Water. Given this, it is appropriate to view the prior convictions as an aggravating factor. In forming this view, I take into account the statement in Veen (No 2) at 477: "… the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences …"

[42]

Comparable cases

The ascertainment of a general pattern of sentences for similar offences assists in fair and reasonable sentencing. I have considered the penalties imposed in other cases when assessing the appropriate penalty for the Offences. Although each judicial decision will turn upon the facts unique to that case and will necessarily be subject to a variety of objective and subjective factors (Environment Protection Authority v Borg Panels Pty Ltd [2016] NSWLEC 71 at [45]), I note the Court should nonetheless seek to impose sentences which are consistent with any patterns of sentencing for like offences.
The prosecutor provided the Court with a table of comparable cases summarising the sentencing considerations and penalties imposed in each of the following decisions: 1. EPA v Sydney Water 2020; 2. Environment Protection Authority v Crown in the Right of New South Wales [2019] NSWLEC 178 ('EPA v NSW 2019'); 3. EPA v Sydney Water 2019; 4. Environment Protection Authority v Hawkesbury City Council [2017] NSWLEC 39; 5. Environment Protection Authority v Hunter Water Corporation [2016] NSWLEC 76; 6. EPA v Sydney Water 2015; and 7. Environment Protection Authority v Forbes Shire Council [2014] NSWLEC 26.
The prosecutor also referred the Court to EPA v Sydney Water 2021 in written submissions.
In sentencing Sydney Water for each of the Offences it has committed, I have given close consideration to each of the above cases and their objective and subjective circumstances which led the sentencing judge in each matter to impose the various sentences (and I have referred to four of the cases at [97]-[98] above to which I have given particular consideration). I have also considered the summaries of other cases undertaken in a number of the cases to which I have been referred, including the summaries in EPA v Sydney Water 2021 at [223]-[224], EPA v Sydney Water 2020 at [103]-[106], and EPA v Sydney Water 2019 at [319]-[324]. The sentences I consider appropriate to be imposed for each of the Offences are not inconsistent with the sentences imposed in the matters to which I have been referred.

[44]

Moiety

The prosecutor seeks an order that a moiety to be paid to the prosecutor in accordance with s 122 of the Fines Act 1996 (NSW) ('Fines Act').
As noted by Pain J in EPA v Sydney Water 2020, where the statutory requirements of the Fines Act are satisfied, the Court has discretion to order that a moiety is paid (and this discretion can be exercised despite separate provisions for the payment of investigation costs within the statutory regime). In that case, Pain J was open to making the order, as the moiety would compensate the prosecutor and support ongoing environmental law enforcement activities, rather than provide a "windfall gain": at [116]-[118]. This approach was adopted by Pepper J in EPA v Sydney Water 2021, when making an order for a moiety: at [246].
The prosecutor in these proceedings did not make specific submissions in relation to the order sought (and, in particular, whether a moiety was needed to fully compensate the prosecutor for its professional costs investigating the commission of the Offences). Sydney Water in these proceedings submits that it does not cavil at the approach taken to an order for a moiety in EPA v Sydney Water 2020 and EPA v Sydney Water 2021, but expressed some reservations in relation to the order sought, submitting that in circumstances where the proceedings were between two public authorities, fines should go towards specific environmental programs or general revenue, and that the prosecutor's funding was a matter for Treasury.
I have considered the prosecutor's proposed order for a moiety. In the absence of an identified need for compensation to the prosecutor (as was provided in EPA v Sydney Water 2020 and EPA v Sydney Water 2021), I do not consider it appropriate to make an order for a moiety. In coming to this conclusion, I have given more weight to the absence of submissions and evidence as to why the ordering of a moiety might be appropriate than Sydney Water's submissions as to why the ordering of a moiety might not be appropriate.

[46]

Order under s 250(1)(e) of the POEO Act

Section 250(1)(e) of the POEO Act provides that the Court may order an offender to pay a specified amount to a specified organisation, for the purposes of a specified project for the restoration or enhancement of the environment or for general environmental purposes.
The prosecutor seeks an order under s 250(1)(e) of the POEO Act, that Sydney Water pays a specified amount to the City of Parramatta Council for the purposes of the project titled "Parramatta River Fish Lift Refurbishment and Fish Habitat Improvement Proposal" which has a project cost of $97,175. If the quantum of the penalty ordered by the Court for the Offences exceeds this amount, the prosecutor seeks a further order under s 250(1)(e) of the POEO Act that Sydney Water pays a specified amount to the City of Parramatta Council for the purposes of the project titled "Toongabbie Creek Riparian Restoration Project Proposal" which has a project cost of $116,872 over two years. Details of the projects were provided by the prosecutor and tendered as part of the prosecutor's proposed orders (Exhibit 2).
I have reviewed the details of the projects provided by the prosecutor and am satisfied that they contribute to the restoration and enhancement of the environment. Specifically, the "Parramatta River Fish Lift Refurbishment and Fish Habitat Improvement Proposal" aims to facilitate movement and long-term survival of native fish and the "Toongabbie Creek Riparian Restoration Project Proposal" aims to restore critically endangered River-flat Eucalypt Forest canopy and mid-storey canopy at a specific reserve. I consider that these projects meet the requirements of s 250(1)(e) of the POEO Act. I consider it appropriate in the circumstances that the monetary penalty imposed by the Court is directed to these projects. As will be seen below, the monetary penalties which I intend to impose are likely to fund the whole of one of the projects and constitute a contribution to the other project (noting that project is scalable and can proceed on the basis of such a contribution).
The prosecutor's proposed orders include an order that for a period of 36 months from the date of the orders, all public references by Sydney Water to the "Parramatta River Fish Lift Refurbishment and Fish Habitat Improvement Proposal" and the "Toongabbie Creek Riparian Restoration Project Proposal" are to be accompanied by a specified statement indicating that Sydney Water's contribution was made as part of a monetary penalty ordered by the Court. In oral submissions, Sydney Water submitted that the period should be limited to 12 months as where a project is permanent or is being undertaken over two years (like those proposed), the utility of the public message sought by Sydney Water may be achieved over a shorter period.
I have considered the prosecutor's and Sydney Water's submissions and consider that a period of 24 months for public references to the projects is appropriate.

[51]

In both proceedings 2019/00326592 and 2019/00326594: 1. Pursuant to section 248(1) of the POEO Act, Sydney Water Corporation is to pay the Environment Protection Authority's reasonably incurred costs and expenses incurred during the investigation of the Offences in the amount of $22,893. 2. Pursuant to section 257B of the Criminal Procedure Act 1986 (NSW), Sydney Water Corporation is to pay the Environment Protection Authority's costs in an amount as agreed or as may be determined under s 257G of the Criminal Procedure Act 1986 (NSW). 3. Pursuant to s 250(1)(a) of the Protection of the Environment Operations Act 1997 (NSW) ('POEO Act'), Sydney Water Corporation, at its expense, is to: 1. within 28 days of the date of this order, cause a notice to be placed within the first 5 pages of the Sydney Morning Herald, the Daily Telegraph and the Parramatta Advertiser at a minimum size of 10cm x 18cm, with the text of such notice to be as set out in Annexure "C" to these orders; and 2. within 42 days of the date of this order, provide to the Environment Protection Authority, a complete copy of the pages of the Sydney Morning Herald, the Daily Telegraph and the Parramatta Advertiser on which the notice was published in accordance with Order (3(a)) above, appears. 1. Pursuant to s 250(1)(a) of the POEO Act, Sydney Water Corporation is to: 1. within 14 days of the date of this order, publicise the Offences and the orders made against it by "posting" the text of Annexure "C" to these orders on Sydney Water Corporation's Facebook page, together with the photograph at Annexure "D" and a hyperlink directly to the Court's judgment as published on the New South Wales Caselaw website and "tagging" the Environment Protection Authority and the City of Parramatta Council in the post. The post is to be made between the times of 8.00am and 10.00am or between 4.30pm and 6.30pm on a weekday. This post must remain a pinned post on Facebook that remains at the top of Sydney Water Corporation's Facebook page for a minimum of 7 days; 2. within 14 days of the date of this order, publicise the offences and the orders made against it by "tweeting" the following text from Sydney Water Corporation's Twitter account: "@SydneyWaterNews prosecuted by @NSW_EPA and convicted of two water pollution offences in relation to overflow of approximately 2,800,000 litres of untreated sewage into Parramatta River in October 2018. Ordered to pay $175,500 in penalties: [insert hyperlink to judgment as published on NSW Caselaw website]" together with a hyperlink directly to the Court's judgment as published on the New South Wales Caselaw website and the photograph at Annexure "D". The tweet is to be made between the times of 8.00am and 10.00am or between 4.30pm and 6.30pm on a weekday. This tweet must remain a pinned tweet on Twitter that remains at the top of the Sydney Water Corporation's Twitter page for a minimum of 7 days. The Environment Protection Authority may tag Sydney Water Corporation's Twitter account in any Environment Protection Authority tweets about the judgment; and 1. within 14 days of the date of this order, publicise the offences and the orders made against it by "posting" the photograph at Annexure "D" on its Instagram account with the following caption: "@sydneywater was prosecuted by @NSW_EPA and convicted of two water pollution offences in relation to overflow of approximately 2,800,000 litres of untreated sewage into Parramatta River in October 2018. Sydney Water Corporation pleaded guilty to the offences. Sydney Water Corporation was ordered to pay a total of $175,500 in penalties, including $97,175 to the "Parramatta River Fish Lift Refurbishment and Fish Habitat Improvement Proposal" and $78,325 to the "Toongabbie Creek Riparian Restoration Project Proposal": [insert url to judgment as published on NSW Caselaw website] #sydneywater #environment #CityofParramatta #ParramattaRiver" together with a url to the Court's judgment as published on the New South Wales Caselaw website. The post is to be made between the times of 8.00am and 10.00am or between 4.30pm and 6.30pm on a weekday. This post must remain on Sydney Water Corporation's Instagram account for a minimum of 1 month. ********** Annexure A (948069, pdf) Annexure B (1129156, pdf) Annexure C (97274, pdf) Annexure D (1604868, pdf) 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: 12 March 2021

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