Environment Protection Authority v Zoya Investments Pty Ltd

Introduction

1. Relevant provisions of various statutes are engaged by these appeal proceedings. Those statues are: 1. The CLM Act; 2. The Crimes (Sentencing Procedure) Act 1999 (the Sentencing Procedure Act); 3. The Fines Act 1996 (the Fines Act); and 4. The Criminal Procedure Act 1986 (the Criminal Procedure Act).

The CLM Act

1. A significant number of elements of the CLM Act are engaged (at varying degrees of necessity for substantial discussion). They are set out below.
2. The first provision is that which sets out the objects of the CLM Act: 3 Objects of this Act (1) The general object of this Act is to establish a process for investigating and (where appropriate) remediating land that the EPA considers to be contaminated significantly enough to require regulation under Division 2 of Part 3. (2) Particular objects of this Act are - (a) to set out accountabilities for managing contamination if the EPA considers the contamination is significant enough to require regulation under Division 2 of Part 3, and (b) to set out the role of the EPA in the assessment of contamination and the supervision of the investigation and management of contaminated sites, and (c) to provide for the accreditation of site auditors of contaminated land to ensure appropriate standards of auditing in the management of contaminated land, and (d) to ensure that contaminated land is managed with regard to the principles of ecologically sustainable development.
3. The second matter to be set out is the definition of "harm" contained in s 4: harm means, in relation to the contamination of land, harm to human health or some other aspect of the environment (including any direct or indirect alteration of the environment that has the effect of degrading the environment), whether in, on or under the land or elsewhere.
4. The next relevant provision, a provision requiring discussion in the context of whether the Company should be regarded as responsible for the contamination of the site, is s 6 of the CLM Act, a provision in the following terms: 6 Responsibility for contamination of land (1) For the purposes of this Act, a person is responsible for contamination of land (whether or not the contamination is significant contamination) if any one or more of the following is true - (a) the person caused the contamination of the land (whether or not any other person also caused the contamination of the land), (b) the contamination occurred because an act or activity of the person resulted in the conversion of a substance that did not cause contamination of the land into a substance that did cause contamination of the land, (c) the person is the owner or occupier of the land and the person knew or ought reasonably to have known that contamination of the land would occur and the person failed to take reasonable steps to prevent the contamination, (d) the person carried on activities on the land that generate or consume - (i) the same substances as those that caused the contamination, or (ii) substances that may be converted, by reacting with each other or by the action of natural processes on the land, into substances that are the same as those that caused the contamination, unless it is established that the contamination was not caused by the person. (2) For the purposes of this Act, a person is also responsible for significant contamination of land if either or both of the following is true - (a) the significant contamination occurred because an act or activity of the person resulted in a change in some pre-existing contamination of the land so that the contamination of the land became significant contamination, (b) the significant contamination occurred because an act or activity of the person resulted in a change in the approved use of the land and the consequent increase in the risk of harm caused the EPA to identify the land as significantly contaminated land (even if the contamination itself did not change). (3) In determining whether a person is responsible for contamination of land, it is irrelevant that the contamination did not arise contemporaneously with the act, activity or omission of the person that ultimately was responsible for (or is taken to be responsible for) the contamination of the land. (4)‑(6) …
5. It is next appropriate to set out the terms of s 9 of the CLM Act as it was referred to by the Prosecutor during the sentencing hearing. It will not later require detailed consideration. 9 Need to maintain ecologically sustainable development (1) The EPA is to have regard to the principles of ecologically sustainable development in the exercise of its functions under this Act and is to seek the implementation of those principles in the management by other persons of contaminated land. (2) In this section, ecologically sustainable development and the principles and programs that relate to it are to be construed according to their meanings in the statements of principle set out in subsection (3) (the principles of ecologically sustainable development). (3) Ecologically sustainable development requires the effective integration of economic and environmental considerations in decision-making processes. Ecologically sustainable development can be achieved through the implementation of the following principles and programs - (a) the precautionary principle - namely, that if there are threats of serious or irreversible environmental damage, lack of full scientific certainty should not be used as a reason for postponing measures to prevent environmental degradation. In the application of the precautionary principle, public and private decisions should be guided by - (i) careful evaluation to avoid, wherever practicable, serious or irreversible damage to the environment, and (ii) an assessment of the risk-weighted consequences of various options, (b) inter-generational equity - namely, that the present generation should ensure that the health, diversity and productivity of the environment are maintained or enhanced for the benefit of future generations, (c) conservation of biological diversity and ecological integrity - namely, that conservation of biological diversity and ecological integrity should be a fundamental consideration, (d) improved valuation, pricing and incentive mechanisms - namely, that environmental factors should be included in the valuation of assets and services, such as - (i) polluter pays - that is, those who generate pollution and waste should bear the cost of containment, avoidance or abatement, (ii) the users of goods and services should pay prices based on the full life cycle of costs of providing goods and services, including the use of natural resources and assets and the ultimate disposal of any waste, (iii) environmental goals, having been established, should be pursued in the most cost effective way, by establishing incentive structures, including market mechanisms, that enable those best placed to maximise benefits or minimise costs to develop their own solutions and responses to environmental problems.
6. The next provision is that which provides the basis upon which the Prosecutor can select to whom a Management Order is to be issued. Matters arising from this provision have not been the subject of any dispute in these proceedings. The terms of the provision are set out below: 13 Choice of appropriate person to be made subject to management order (1) If the EPA makes a management order in respect of significantly contaminated land, the order must specify one or more appropriate persons (or public authorities that are not appropriate persons) as the subject of the Management Order. (2) The EPA is to choose the appropriate persons from among the following persons - (a) a person who is responsible for significant contamination of the land (whether or not there may be other persons who are also responsible), (b) an owner of the land (whether or not the person is responsible for contamination of the land), (c) a notional owner of the land (whether or not the person is responsible for contamination of the land). (3) In determining the appropriate persons, the EPA is, as far as practicable, to specify a person referred to in subsection (2) (a) over a person referred to in subsection (2) (b) or (c) and to specify a person referred to in subsection (2) (b) over a person referred to in subsection (2) (c). (4) For the purposes of this section, it is not practicable to specify a person if - (a) there is no such person, or (b) the EPA cannot, after reasonable inquiry, find out the identity or location of the person, or (c) the person, in the opinion of the EPA, is unable to pay the person's debts or would, if the person took steps to comply with the Management Order, become unable to pay the person's debts. (5) Despite subsection (2), in the case where a significant contaminant of the land originates from the use of a cattle dip site on the land in relation to a treatment ordered under the Biosecurity Act 2015, or the Stock Diseases Act 1923 (an Act repealed by the Biosecurity Act 2015), the appropriate person is - (a) except in the case referred to in paragraph (b) - the Secretary of the Department of Industry, Skills and Regional Development, or (b) if a person is responsible for significant contamination of the land (whether or not there are other persons who are responsible for such contamination of the land) because of the operation of section 6 (2) (b) - that person. (6) Any public authority may be specified as the subject of a management order whether or not as an appropriate person.
7. The next relevant provision is that which sets out the scope of the Management Orders which may be served by the Prosecutor on a person who is identified through the processes set out in s 13 above. This provision also provides, in s 14(6), the creation of an offence for failure to carry out obligations imposed on the corporation or individual to whom a Management Order is directed if the corporation or individual does not have any reasonable excuse for failing to carry out what has been required by the Order. It is to be noted that, for a corporation, s 14(6)(a) provides differential penalties depending on whether the corporation to whom the order has been issued was responsible for the contamination or not. How this provision is to be construed, in present circumstances, is a matter of significant debate and potential impact in these proceedings. It is later dealt with, effectively, as a preliminary point to the overall sentencing process I am to undertake. The terms of s 14 are set out below: 14 Management orders (1) The EPA may, by order in writing served on a person who is an appropriate person or a public authority, direct the person to do one or both of the following in relation to significantly contaminated land, within such reasonable time as is specified in the order: (a) carry out any action in relation to the management of the land that may be specified in the order in accordance with this Division, (b) submit for the EPA's approval a plan of management of the land (a plan of management). (1A) A management order may, in accordance with Division 6A, require the person to whom the order is directed to provide financial assurance to secure or guarantee funding for or towards the carrying out of an action required by or under the order. (2) The EPA must serve a copy of the Management Order on each of the following persons in addition to any person on whom the Management Order has been served under subsection (1): (a) the owner of the land (or, if the EPA does not know the identity or address of the owner, any notional owner of the land whose identity and address are known to the EPA), and (b) those persons (whose identities and addresses are known to the EPA) who the EPA has reason to believe may be responsible for the significant contamination of the land. (3) A management order may adopt, with or without modification, a plan of management submitted in accordance with a previous management order or, at the discretion of the EPA, a plan recommended by the EPA or submitted by a site auditor. (4) The EPA must not serve a management order on a person unless it has considered any submissions it has received in accordance with section 11 (2) (e) as to whether the Management Order should be made. (5) Despite subsection (4), the EPA may serve a management order on a person at any time if it considers that it is in the public interest to do so. (6) A person (other than a public authority that is not an interested person with respect to the relevant land) served with a management order must not, without reasonable excuse, fail to comply with any direction or other requirement specified by the order within the time specified by the order. Maximum penalty: (a) in the case of a corporation - $1 million (if responsible for the contamination) or $137,500 (in any other case) and, in the case of a continuing offence, a further penalty of $66,000 for each day the offence continues, or (b) in the case of an individual - $250,000 (if responsible for the contamination) or $66,000 (in any other case) and, in the case of a continuing offence, a further penalty of $33,000 for each day the offence continues. (7)‑(8) …
8. The Prosecutor has power to amend Management Orders, a process invoked by the Prosecutor in the circumstances giving rise to these proceedings. This power is in s 44 of the CLM Act, it being set out below: 44 Amendment or repeal of orders and notices (1) An order or notice under this Part (the original instrument) may be amended or repealed by one or more subsequent orders or notices (the amending instrument). (2) An amending instrument - (a) must state the reasons for the amendment or repeal, and (b) must, as far as is reasonably practicable, be served on the persons on whom the original instrument was required to be served, and (c) must not declare land that is not significantly contaminated land to be significantly contaminated land unless the amending instrument is made in accordance with sections 11 and 12, and (d) is taken to be made under the same provisions of this Act as the original instrument, and (e) is not otherwise required to comply with the provisions of this Part with respect to the making of an original instrument. (3) Nothing in this section enables the amendment of an original instrument so that, as amended, it would not have been in accordance with this Act originally to make it.
9. Environmental statutes in New South Wales now almost universally incorporate the power of the Court to make additional orders in a fashion originally pioneered in s 250 of the Protection of the Environment Operations Act 1997. The power to make such additional orders is here provided by s 95B of the CLM Act. Only one element of this provision, that relating to the power to make what it is known colloquially as a "publication order", is engaged in these proceedings. As a consequence, only the element of s 95B relevant to such an order is reproduced below (noting that the making of such an order is not opposed by the Company): 95B Additional orders (1) Orders The court may do any one or more of the following - (a) order the offender to take specified action to publicise the offence (including the circumstances of the offence) and its environmental and other consequences and any other orders made against the person,
10. The final provision of the CLM Act requiring consideration is s 97 which contains a list of matters potentially relevant to the sentencing process for breaches of the Act (including, here relevant, s 14(6)(a)). Of the matters listed below, only s 97(1)(f) has no potential role to play in these sentencing proceedings. The relevant elements of s 97 are set out below: 97 Matters to be considered in imposing penalty (1) In imposing a penalty for an offence against this Act or the regulations, a court is to take into consideration the following (so far as they are relevant) - (a) the extent of the harm already caused or likely to be caused by the commission of the offence, (b) the degree of risk that harm will be caused by the commission of the offence, (c) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (d) the extent to which the person who committed the offence could reasonably have foreseen the harm caused or likely to be caused by the commission of the offence, (e) the extent to which the person who committed the offence had control over the causes that gave rise to the offence, (f) whether, in committing the offence, the person was complying with orders from an employer or supervising employee. (2) The court may take into consideration other matters that it considers relevant.

The Sentencing Procedure Act

1. The Sentencing Procedure Act sets out, in s 3A, the purposes for which sentencing is to be undertaken. This provision is in the following terms: 3A Purposes of sentencing The purposes for which a court may impose a sentence on an offender are as follows - (a) to ensure that the offender is adequately punished for the offence, (b) to prevent crime by deterring the offender and other persons from committing similar offences, (c) to protect the community from the offender, (d) to promote the rehabilitation of the offender, (e) to make the offender accountable for his or her actions, (f) to denounce the conduct of the offender, (g) to recognise the harm done to the victim of the crime and the community.
2. The Sentencing Procedure Act also sets out, in s 21A(2) and (3), matters required to be considered when sentencing for the offence to which the Company has pleaded guilty. Not all elements of these provisions are here relevant. The relevant elements of the two provisions are in the following terms: 21A Aggravating, mitigating and other factors in sentencing (1) General In determining the appropriate sentence for an offence, the court is to take into account the following matters - (a) …, (b) the mitigating factors referred to in subsection (3) that are relevant and known to the court, (c) any other objective or subjective factor that affects the relative seriousness of the offence. The matters referred to in this subsection are in addition to any other matters that are required or permitted to be taken into account by the court under any Act or rule of law. (2) …. (3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows - (a) the injury, emotional harm, loss or damage caused by the offence was not substantial, (b) … (d) (e) the offender does not have any record (or any significant record) of previous convictions, (f) the offender was a person of good character, (g) the offender is unlikely to re-offend, (h) …, (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), (j) …, (k) a plea of guilty by the offender (as provided by section 22 or Division 1A), (l) …, (m) assistance by the offender to law enforcement authorities (as provided by section 23), (n) …. (4) The court is not to have regard to any such aggravating or mitigating factor in sentencing if it would be contrary to any Act or rule of law to do so. (5) The fact that any such aggravating or mitigating factor is relevant and known to the court does not require the court to increase or reduce the sentence for the offence. (5A)‑(5C) …
3. Finally, s 22 of the Sentencing Procedure Act requires me to take into account the Company's entry of a plea of guilty to the offence with which it has been charged. This provision is in the following terms: 22 Guilty plea to be taken into account for offences not dealt with on indictment (1) In passing sentence for an offence on an offender who has pleaded guilty to the offence, a court must take into account - (a) the fact that the offender has pleaded guilty, and (b) when the offender pleaded guilty or indicated an intention to plead guilty, and (c) the circumstances in which the offender indicated an intention to plead guilty, and may accordingly impose a lesser penalty than it would otherwise have imposed. (1A)‑(5) …

The Fines Act

1. Section 122 of the Fines Act permits me to order a moiety (50%) of any fines which I impose on the Corporation are required to be paid to the Prosecutor. It is not necessary to reproduce the terms of the provision, it is sufficient to note its effect.

The Criminal Procedure Act

1. Finally, it is appropriate to note that ss 257B and 257G of the Criminal Procedure Act provide the basis upon which the Prosecutor can be awarded its costs of prosecuting the Company.

The Summons

1. The Summons, as setting out the charge against the Company and the pleaded particulars, are set out below as they are necessary to be considered later. They are, relevantly, in the following terms: 1 An order that the Defendant, Zoya Investments Pty Ltd (CAN 933 162), having its registered office at 67 Stewart Avenue, Hamilton South, in the State of New South Wales, appear before a Judge of the Court to answer the charge that, from about September 2020 and continuing to 6 September in the State of New South Wales, it committed an offence against section 14(6) of the Contaminated Land Management Act 1997 (CLM Act) in that it was served with a management order and, without reasonable excuse, failed to comply with a direction or other requirement specified by the order within the time specified by the order. Particulars a. Management order Management Order No 20201401, issued under s 14(1) of the CLM Act to the Defendant on 21 February 2020, and as amended by Notice to Amend Management Order No 20204425 (Amended Order), issued under s 44 of the CLM Act to the Defendant on 23 April 2020. b. Direction or other requirement Action D(ii) of the Amended Order, which states. Where operational issues are identified by the duly qualified person referred to at (i) above, then immediate action must be taken to rectify the problem. Provide a written report prepared by the duly qualified person detailing the work carried out to the EPA. Provide a report to the EPA detailing rectification works within 4 weeks of the works being completed or by Friday 18 September 2020, whichever comes first. c. Time specified Within 4 weeks of the works being completed or by Friday 18 September 2020, whichever comes first. d. Manner of breach The Defendant, without reasonable excuse, failed to comply with Action D(ii) of the Amended Order, in that it did not provide a written report prepared by a duly qualified person detailing the work carried out to the EPA by 18 September 2020 and, as at 6 September 2021 has not provided to the EPA any such report. 2 An order under s246(1)(a) of the Criminal Procedure Act 1986 for the attendance of the Defendant before the Court to answer the above offence. 3 An order that the Defendant be dealt with according to law for the commission of the above offence. 4 Such orders pursuant to Part 10 Division 2A of the CLM Act as the Court in its discretion sees fit to make. 5 An order that the Defendant pay the Prosecutor's costs. 6 Such other orders as the Court in its discretion sees fit to make.

Representation

1. The Prosecutor was represented by Mr P English, barrister, and the Company by Mr S Young, barrister. Both provided helpful written submissions.

The hearing

1. The hearing took place in person and was completed in less than a day.

The evidence

1. The Prosecutor and the legal representatives of the Company had settled a comprehensive SOAF setting out the facts that provide the basis for my sentencing consideration of the Company's offending conduct. The SOAF was, by agreement, the only evidence to be tendered in the proceedings.
2. Although Mr Young, during the course of his submissions, sought leave to tender an annexure to an expert report prepared by an officer of the Prosecutor and to read an affidavit from another officer of the Prosecutor, leave to do so was opposed by the Prosecutor. The Prosecutor opposed this occurring because: 1. no notice had been given of any intention to do so and this constituted an ambush; 2. it was contrary to the express agreement between the parties that the evidence would be confined entirely to the SOAF; and 3. the Prosecutor did not have either of the witnesses available, if the Prosecutor considered it necessary for there to be oral evidence in response to whatever submissions were made by Mr Young based on either of the documents sought to be admitted as evidence.
3. I rejected the admission of this material for the reasons advanced by the Prosecutor.
4. Although lengthy, it is appropriate to set out the SOAF in its entirety as it will be necessary to refer, in my subsequent sentencing analysis, to a number of matters of detail in this document. The SOAF is in the following terms: Offence 1 Zoya Investments Pty Ltd (ACN 169 933 162) (Zoya) has pleaded guilty to one offence contrary to s 14(6) of the Contaminated Land Management Act 1997 (CLM Act), in that from about 19 September 2020 and continuing to 6 September 2021, without reasonable excuse, it failed to comply with a management order (Offence). 2 The management order is particularised in the Summons as Management Order No 20201401, issued under s 14(1) of the CLM Act to Zoya on 21 February 2020 (Management Order), as amended by Notice to Amend Management Order No 20204425, issued under s 44 of the CLM Act to Zoya on 23 April 2020 (Amended Management Order). 3 The Management Order was issued to Zoya as a person responsible for the contamination of land the subject of the Declaration of Significantly Contaminated Land No 20181113, issued pursuant to s 11 of the CLM Act, being land located at 68 Craigie Avenue, Kanwal, NSW (Premises). 4 The maximum penalty for an offence contrary to s 14(6) of the CLM Act for a corporation responsible for the contamination is $1 million and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues: CLM Act s 14(6)(b). 5 The maximum penalty for an offence contrary to s 14(6) of the CLM Act for a corporation not responsible for the contamination is $1,37,500 and, in the case of a continuing offence, a further penalty of $120,000 for each day the offence continues: CLM Act s 14(6)(a). The Land 6 Zoya has owned the Premises since December 2016. The Premises includes an operational service station operated by Shree Krishna Holdings Pty Ltd, which has leased the Premises from Zoya since 10 December 2018. 7 The service station includes an underground petroleum storage system (UPSS) which contains four operational underground storage tanks and associated fuel infrastructure. The Defendant 8 At the time of the Offence, Zoya had two directors, Mr Rizwan Rana (Mr Rana) and Mr Satwinder Singh (Mr Singh). Significantly Contaminated Declaration 9 On 7 August 2017, Esplins Solicitors, acting on behalf of Seaforth Securities Pty Ltd, the owners of the adjacent property located at 70 Craigie Avenue, Kanwal, NSW, sent a letter to the Environment Protection Authority (EPA) alleging that the service station at the Premises was contaminating soil and groundwater at its adjoining property. 10 On 9 August 2017, the EPA received an email from environmental consultancy firm, Compaction and Soil Testing Services Pty Ltd, acting on behalf of Mr Rana and Mr Singh, which attached a contamination report containing a copy of records held by SafeWork NSW regarding storage of hazardous chemicals at the Premises. The SafeWork NSW records indicate that Mr Rana and Mr Singh notified SafeWork NSW in 2017 that they were storing hazardous chemicals at the Premises and that the business being conducted was a petrol service station. 11 In or around October 2018, the EPA undertook a contamination assessment of the Premises and, for the following reasons, determined that the contamination of the Premises and part of 70 Craigie Avenue, Kanwal NSW (together, the Site) was sufficiently significant to warrant regulation under the CLM Act: a. groundwater was contaminated with petroleum hydrocarbons including phase separated hydrocarbons (PSH) and dissolved phase hydrocarbons at concentrations exceeding guidelines that are protective of human health and/or the environment; b. the source of contamination at the Premises had not been suitably identified and appeared to be ongoing; c. PSH were found to be present in the groundwater at 70 Craigie Avenue and high concentrations of dissolved phase hydrocarbons were found to be present in the groundwater at the Premises, indicating that PSH was possibly also present at the Premises; d. the investigations at the time indicated the potential for multiple contamination sources and potentially multiple releases over time; e. the extent of groundwater contamination had not been delineated and had the potential to impact the down gradient unnamed tributary; f. there was a potential for receptors including residents and commercial workers at the Site to be exposed to contaminants via vapour intrusion into buildings; and g. there was a potential for receptors including commercial workers and intrusive maintenance workers at the Premises to come into contact with surficial contamination. 12 On 31 October 2018, the EPA prepared a draft Notice for the Declaration of Significantly Contaminated Land for the Site (the Draft Declaration). The EPA served the Draft Declaration on Zoya on 31 October 2018 and again on 1 November 2018. 13 The EPA did not receive a response from Zoya to the Draft Declaration. 14 On 11 December 2018, the EPA issued a Final Notice for the Declaration of Significantly Contaminated Land, being Declaration No 20181113, under s 11 of the CLM Act for the Site (the Declaration). The EPA served the Declaration on Zoya on 12 December 2018 and again on 13 December 2018. Development Approval Application 15 On 20 August 2019, Zoya lodged application for development approval DA/779/2019 with the Central Coast Council. This application was rejected, and on 13 September 2019 Zoya lodged a further application DA/877/2019. The development applications did not refer to the Declaration. Management Order 16 On 21 February 2020, the EPA validly issued the Management Order to Zoya under s 14 of the CLM Act in relation to contamination at the Premises. The EPA served a copy of the Management Order on Zoya on 21 February 2020 and again on 24 February 2020. A copy of the Management Order is annexed to this document and marked Annexure A. Comments on Development Application 17 On 4 March 2020, the EPA advised Central Coast Council that the development application report for DA/877/2019 incorrectly stated that the site was not contaminated and was not on the EPA public register, and advised the Council that the Declaration and Management Order had been issued. Zoya's compliance with the Management Order 18 Between February 2020 and September 2020, Zoya completed all Action items, other than Action D, as required by the Management Order. Action D of the Management Order 19 The Management Order required Zoya to, amongst other things, carry out the following actions: D(i) Engage a duly qualified person to carry out equipment integrity checks of the underground petroleum storage system and all associated fuel infrastructure on the land at 68 Craigie Avenue Kanwal, to identify any faulty infrastructure or absence of spill protection / containment measures that may be contributing to contamination… Provide a written report prepared by the duly qualified person detailing their findings to the EPA. D(ii) Where operational issues are identified by the duly qualified persons referred to at (i) above, then immediate action must be taken to rectify the problem. Provide a written report prepared by the duly qualified person detailing the work carried out to the EPA. 20 The Management Order required the written report in Action D(i) to be provided to the EPA by 24 April 2020 and the written report in Action D(ii) to be provided to the EPA within 4 weeks of the works being completed or by 19 June 2020 (whichever came first). Correspondence by Aurora Environmental Consulting Pty Ltd in relation to Action D 21 In April 2020, Tim Brown (Mr Brown) of Aurora Environmental Consulting Pty Ltd (Aurora) (the environmental consultant engaged by Zoya for the purposes of the Management Order) spoke with Mr Rana and had a conversation with words to the following effect in relation to Action D: Mr Brown said: Have you arranged the tank and line testing? It is required to be competed and I cannot arrange this. These works need to be arranged directly by you. Mr Rana said: I don't want to complete the tank and line testing works on a fuel system which is going to be taken out of service very soon within the next 3 months as we are planning to redevelop the site with all new fuel system. It would be a waste of money. Amended Management Order 22 On 3 April 2020, Mr Brown wrote to the EPA on behalf of Zoya requesting an extension to the due date for Actions D(i) and D(ii) of the Management Order. 23 On 23 April 2020, the EPA issued the Amended Management Order to Zoya under s 44 of the CLM Act, granting Zoya a three-month extension to complete Action D of the Management Order. The Amended Management Order was served on Zoya, and a copy sent to Mr Brown, on 23 April 2020. A copy of the Amended Management Order is annexed to this document and marked Annexure B. 24 The Amended Management Order required Zoya to: a. carry out equipment integrity testing to identify any operational issues and provide a written report detailing findings to the EPA by 24 July 2020, pursuant to Action D(i), and b. immediately rectify any operational issues identified in the report under Action D(i) and provide a further report prepared by the qualified person detailing rectification works to the EPA within 4 weeks of the works being completed or by 18 September 2020 (whichever came first), pursuant to Action D(ii). Withdrawal of Development Application 25 On 13 May 2020, development application DA/877/2019 was withdrawn by Zoya. Zoya's compliance with the Amended Management Order 26 On 24 June 2020 and 25 June 2020, Mr Brown contacted Zoya requesting it to arrange for the tank and line testing of the underground fuel system at the Premises as required by Action D(i) of the Management Order. 27 On 9 July 2020, Mr Brown contacted Zoya reminding it that Aurora was not responsible for providing the information relating to Action D of the Management Order to the EPA, but that he would forward that information to the EPA if it was provided to him. 28 In July 2020, Zoya engaged Neo Consulting Pty Ltd (Neo Consulting) to carry out the equipment integrity checks of the UPSS and all associated fuel infrastructure required by Action D(i) of the Management Order. 29 On 24 July 2020, Zoya provided an Equipment Integrity Test (EIT) report prepared by Neo Consulting for the UPSS and associated infrastructure to the EPA in accordance with Action D(i) of the Management Order. The EIT report outlined, amongst other things, the following: a. three of the four underground fuel storage tanks failed the MESA 2-D acoustical test and require further investigation and possible rectification; b. the unleaded petrol (ULP) fuel suction line from the ULP 1 tank to bowser 1, 2 failed the line test due to a pin hole leak in its anaconda and required immediate action and rectification; and c. a stage 2 test was recommended to be carried out on the three underground ULP fuel storage tanks that failed the MESA 2-D acoustical test. Correspondence with EPA 30 On 24 July 2020, the EPA advised Zoya that any leaks or issues identified in the EIT report were to be rectified immediately and that the recommendations in the report to further investigate the failed underground storage tank (UTS) tests were to be undertaken. The EPA advised Zoya these works and a report detailing the findings had to be completed and submitted to the EPA by the due date set out in the Amended Management Order for Action D(ii). Correspondence between Aurora, Zoya and Neo Consulting 31 In August 2020, Zoya was reminded on two separate occasions by Mr Brown of its obligation to comply with Action D(ii) of the Amended Management Order by 18 September 2020. 32 On 2 September 2020, Nick Caltabiano of Neo Consulting advised Mr Brown that Zoya would not be proceeding with the works as required under Action D(ii) of the Amended Management Order. This advice to Mr Brown was preceded by Mr Rana requesting Mr Caltabiano to provide a report to Zoya in accordance with Action D(ii) of the Amended Management Order in the absence of performing the actual work (which required prior access being made available to the UPSS at the Premises). Reminders and show cause letters 33 On 8 September 2020, the EPA reminded Zoya that Action D(ii) of the Amended Management Order was due on Friday 18 September 2020. 34 Zoya was further reminded of its obligation to comply with Action D(ii) of the Amended Management Order by the EPA on 24 September 2020 and 16 October 2020. Zoya did not respond to any of these reminders. 35 On 13 November 2020, the EPA sent a show cause letter to Zoya inviting it to provide any reason for its non-compliance with Action D(ii) of the Management Order (the Show Cause Letter). The EPA contacted Zoya on 27 November 2020 and 2 December 2020 to remind it of the Show Cause Letter and ongoing obligation to comply with Action D(ii) of the Amended Management Order. 36 Following receipt of the Show Cause Letter, on 16 November 2020, Mr Brown reminded Zoya of its ongoing obligation to comply with Action D(ii) of the Amended Management Order. 37 On 2 December 2020, the EPA sent a reminder to Zoya regarding the Show Cause Letter and Zoya's ongoing obligation to comply with Action D(ii) of the Amended Management Order. 38 On 2 December 2020, Mr Brown again reminded Zoya of its ongoing obligation to comply with Action D(ii) of the Amended Management Order. 39 On 2 June 2021, the EPA sent a further show cause letter to Zoya regarding its non-compliance with Action D(ii) of the Amended Management Order (the Second Show Cause Letter). 40 On 9 June 2021, Zoya contacted the EPA to advise that it intended to do the works as required under Action D(ii) of the Amended Management Order by 16 June 2021. During this conversation, the EPA reminded Zoya of its continuing obligation to comply with the Amended Management Order. 41 On 2 July 2021, Zoya advised the EPA that it had engaged Americo and Sons Pty Ltd (Americo and Sons) and Neo Consulting to complete the works as required under Action D(ii) of the Amended Management Order. 42 Until at least 6 September 2021, Zoya failed to provide to the EPA a written report prepared by a duly qualified person as required under Action D(ii) of the Amended Management Order. Post charge period communications and compliance in relation to Action D(ii) of Amended Management Order 43 On 1 November 2021, the EPA contacted Andrew De Palma of Americo and Sons. Mr De Palma confirmed that Americo and Sons had been engaged by Zoya to carry out the works required by Action D(ii) of the Amended Management Order, however, had been delayed due to Covid-19 lockdown regulations. 44 On 3 November 2021, the EPA contacted Mr Caltabiano of Neo Consulting. Mr Caltabiano confirmed that Neo Consulting had not been to the Premises in the six months prior, and had not carried out the rectification works required by Action D(ii) of the Amended Management Order. 45 On 23 February 2022, Mr Rana advised the EPA that Zoya had lodged a development application to the Central Coast Council (Council) for the replacement of all underground tanks and lines in the UPSS. Mr Rana stated that the operational issues identified at the Premises would be fixed within three months. 46 EPA authorised officer, Ms Donna Phelan (AO Phelan), made enquiries which confirmed that there were no active development applications lodged with the Council which were applicable to the Premises. 47 On 16 March 2022, Mr Rana advised the EPA that Zoya had engaged consultant Mitchell Sovechles to resolve the contamination issues at the Premises, including carrying out the works required by Action D(ii) of the Amended Management Order. 48 On 28 June 2022, Mr Rana advised the EPA that Zoya had engaged a new contractor, Michael Mintilakis of Action Installation, to carry out the works required by Action D(ii) of the Amended Management Order. Mr Mintilakis confirmed this engagement during a telephone call with the EPA on 30 June 2022. 49 On 13 July 2022, the EPA emailed Zoya following up on the status of the works required by Action D(ii) of the Amended Management Order. That same day, the EPA received an email from Mr Rana confirming that Mr Mintilakis of Action Installation had been at the Premises and that a written report would be provided to the EPA within seven working days to satisfy the requirements of Action D(ii). 50 On 25 July 2022, the EPA emailed Zoya following up on the written report detailing the works carried out in completion of the requirements under Action D(ii) of the Amended Management Order. 51 On 26 July 2022, the EPA received an email from Mr Mintilakis on behalf of Zoya, confirming the following in respect of issues identified in the EIT Report: a. a small section of the vapour recovery pipework between the three ULP tanks, which had caused those three tanks to fail the MESA 2-D acoustical test, had been replaced, tested and passed, b. the leaking anaconda pipe in the fuel suction line from the ULP 1 tank to bowser 1,2 had been replaced, tested and passed, and c. two of the three ULP tanks had been tested in isolation from each other and passed. 52 The email from Mr Mintilakis of 26 July 2022 attached a report prepared by a third party tank testing company, Tanknology, which confirmed that the tanks had passed the test. A copy of the email and report dated 20 July 2022 are annexed and marked Annexure C. 53 On 29 July 2022, the EPA received a further email from Mr Mintilakis on behalf of Zoya, confirming that the third ULP tank had been tested in isolation and passed. That email attached a second written report prepared by Tanknology which confirmed this. A copy of the email and Tanknology report are annexed and marked Annexure D. Delay to remediation of significantly contaminated land 54 Between the date that Action D(ii) of the Amended Management Order was due to be completed, being 18 September 2020, and the date that Action D(ii) was completed by Action Installation on behalf of Zoya, being 29 July 2022, a total number of six hundred and seventy-nine days (679) passed. 55 During this period, due to the requirements of the Amended Management Order not being satisfied, the EPA was impeded in carrying out its statutory responsibilities to investigate the contamination at the Premises and subsequently enforce remedial action in relation to that contamination and its migration offsite. Harm 56 The EPA engaged Senior Operations Officer Olivia Patterson to provide an expert report on the environmental harm caused as a consequence of Zoya's failure to carry out the rectification works required by Action D(ii) and to provide a report to the EPA between the period from 19 September 2020 and 6 September 2021 (the Offence Period).46 Ms Patterson's expertise is in contaminant hydrogeology, including the assessment and remediation of petroleum fuel stations. 57 It is not possible on the available data and the EIT Report alone to determine the exact volume of petroleum that leaked from the UPSS as a result of Zoya's failure to carry out the rectification works required by Action D(ii) of the Amended Management Order during the Offence Period. 58 Based on the information in the EIT Report, it was known that during the Offence Period, the line from ULP tank 1 to Bowser 1, 2 was leaking every time it was in use and that there was a risk of a leak in at least one of the three ULP tanks, all three of which failed the MESA 2-D integrity testing. 59 As the leaking anaconda pipe was not replaced, tested and passed until 26 July 2022, petrol was leaking from the fuel suction line from the ULP 1 tank to Bowser 1, 2 every time the pumps at that bowser were in use during the Offence Period. 60 Up until 26 July 2022, being the date that the vapour recovery pipework was replaced, tested, and passed, there was a risk that a potential of 3,210L of petroleum could have leaked from the UPSS during the Offence Period. This risk carried with it the further potential of harm to human health and the environment, in particular: a. to human health via inhalation of contaminant vapours and other toxic hydrocarbons generated from petroleum in groundwater and soils at the Premises; b. to human health by degrading the aquifer at the Premises such that it may become a contaminated drinking resource; c. to human health via generation of methane from the degrading petroleum at levels that would present an explosive risk in an enclosed space or affect service lines by infiltrating PVC pipes at the Premises, including the water main; d. to terrestrial ecology caused by direct contact with the soils contaminated by petroleum; and e. to the environment by creating an ongoing source of dissolved contamination in the groundwater at the Premises that would migrate offsite with the groundwater. 61 There was also the potential for any petroleum leaking into the subsurface of the soil at the Premises to migrate off site down-hydraulic gradient to the neighbouring premises at 70 Craigie Avenue, Kanwal, causing further contamination. Existing contamination at Premises 62 Prior to the Offence Period, the Premises was significantly contaminated and exhibited the following: a. contaminated soil concentrations exceeding the national health screening levels for both commercial and residential properties, due to the generation of petroleum vapours and people having direct contact with the contamination; b. contaminated groundwater at concentrations exceeding the national health screening levels for sand and clay at 2-4m depth, as well as national drinking water guideline levels, making it a contaminated drinking water resource; and c. contaminated soil and groundwater at the Premises at levels presenting potential fire and explosive hazards and affecting buried infrastructure. 63 The release of any amount of petroleum during the Offence Period into the soil subsurface and/or groundwater would exacerbate the already harmful contamination at the Premises and potentially the neighbouring property at 70 Craigie Avenue, Kanwal, adding to the cumulative deterioration of the environment.

The appropriate statutory foundation for penalty determination

Introduction

1. I have earlier reproduced the terms of s 14(6)(a) of the CLM Act, being the provision pursuant to which the Prosecutor has commenced these proceedings against the Company. As can be seen from its terms, depending on whether the Company is to be regarded as "responsible for the contamination" giving rise to the Management Order issued by the Prosecutor to it and with respect to which the Company has failed to comply in part, the potential maximum primary penalty to be imposed on the Company differs.
2. The primary dispute between the Prosecutor and the Company arises from whether, for the purposes of s 14(6)(a), the Company should be regarded as (and is for the purpose of this prosecution) responsible for the contamination (as submitted for the Prosecutor, is the appropriate position to be adopted on a proper construction of relevant provisions of the CLM Act) or, as submitted by Mr Young for the Company, the Company should not be regarded as being responsible for the contamination.
3. The difference between them, as can be seen from the earlier reproduced statutory provision, determines whether the Company faces a maximum fine of $1 million or a maximum fine of $137,500.
4. As earlier noted, as at the date of the offending conduct on 18 September 2020, the Company was also potentially subject to a daily penalty of $66,000 (this daily penalty being independent of which of the primary maximum penalties was applicable).
5. Mr Young submitted that the approach adopted by the Prosecutor was inappropriate and that I should conclude that the Company was not responsible for the contamination. If I adopted his submission, the lower maximum primary penalty would apply.
6. It is to be noted that, in either instance, the same potential maximum daily penalty of $66,000 was applicable.
7. To determine which position is correct, it is next appropriate to turn to address the matters raised by Mr Young and the Prosecutor's anticipatory responses to them. I now turn to setting out, in detail, the submissions advanced for the Prosecutor and for the Company on this point.

The Prosecutor's position

1. For establishing that the Company was responsible for the contamination of the site for the purposes of s 14(6)(a), the Prosecutor relied on s 6(1)(d)(i) of the CLM Act. The Prosecutor submitted that the Company's operation of a service station at the site during the relevant period satisfied s 6(1)(d)(i) of the CLM Act.
2. The Prosecutor submitted that s 6(1)(d)(i) of the CLM Act was a complete answer as to why the Company should be regarded as being subject to the higher maximum starting penalty. The Prosecutor submitted (Transcript 15 November 2022, page 10, lines 8 to 17): So in my submission on the construction point, s 6(1) operates to deem the defendant responsible for the contamination of land the subject of the Management Order irrespective of whether others may have contributed to a greater or lesser degree to the petroleum and hydrocarbon contamination at the site. That's the merit argument I think Mr Murray [Young] makes that it was someone else not us and my response to that is the statute doesn't differentiate. You're all deemed if you generated and consumed the same substance that contributed to the contamination.
3. The Prosecutor continued (Transcript 15 November 2022, page 10, lines 19 to 36): The pleading point in my submission is neither here nor there. What the Summons provides for is the order for the defendant to answer the charge and the particulars provide for the Management Order, the direction or other requirement not complied with, the timeframe and the manner of breach and of course it refers to a continuing breach at one. The plea is obviously to the essential elements of the offence and it was the Summons that informed the defendant of the offence charged and it was to that offence that it entered a plea. One can take the example of general criminal proceedings, whether they're brought in a higher or lower court may affect whether there's a jurisdictional limit and it may affect in the case of serious crime where there's a standard non-parole period not applicable in the local court but applicable in higher courts. That a defendant enters a plea of guilty to that offence says nothing about whether accept a certain maximum penalty or any ancillary provisions that relate to a maximum penalty. It says that they admit each of the essential elements of the offence and that's it and it's only in my submission a matter of construction for your Honour to determine what is the appropriate penalty.
4. The Prosecutor had earlier responded to Mr Young's submission concerning the 2010 spillage incident, submitting (Transcript 15 November 2022, page 9, lines 10 to 26): … Zoya was the entity that carried on activities on the land as the operator of the service station for two years from December '16 to 2018 and in carrying on those activities it generated and consumed the same substances as those that caused the contamination. They are other trailing words "Unless it is established that the contamination was not caused by the person" and of course the Management Order was issued, it referred to the fact that that wasn't established and that's never been taken by the defendant. And so your Honour there's a concept here of contamination at this site that may have occurred over a number of years. My learned friend refers in his submissions to a spill, indeed there was I think in 2010 but of course there is there was also the defendant carrying on activities that generated or consumed petroleum hydrocarbons that caused the contamination itself and of course there's the issue the subject of Action D(ii) of the Management Order which is the leaks I referred to earlier.

The submissions for the Company

1. Mr Young advanced three bases upon which he submitted the Company could not be subjected to the higher maximum penalty permitted by s 14(6)(a) of the CLM Act as proposed by the Prosecutor, on the basis that the Company was responsible for the contamination. The three bases he advanced were: 1. The Prosecutor had not pleaded, expressly, that that was the basis upon which the Prosecutor founded its charge and that, as a consequence, the Prosecutor was now precluded from doing so; 2. The Prosecutor was not permitted to seek to rely on the higher maximum penalty because that would offend the De Simoni principle (derived from the decision of the High Court in The Queen v De Simoni (1981) 147 CLR 383; [1981] HCA 31); and 3. In any event, the Company had not caused the contamination of the site because I should be satisfied, on the balance of probabilities, that the contamination had been caused by a spillage of petroleum products on the site in 2010, before the Company purchased the site.
2. Mr Young proposed that the Prosecutor was unable to put, at the sentencing hearing, that the higher penalty available pursuant to s 14(6)(a) of the CLM Act was able to be relied upon by the Prosecutor as founding the penalty to which the Company was subject as it had not expressly pleaded this in the Summons. The Summons, he submitted, had simply identified the provision and had not specified which of the elements of it the Prosecutor relied upon for the purposes of the offence with which the Company had been charged. Mr Young had advanced this proposition in paragraph 4 of his written submissions in the following terms: 4 That Zoya was "responsible for the contamination" and therefore liable to the maximum penalty of $1 million rather than $137,500, was not pleaded in the Summons dated 16 September 2021, or otherwise alleged before Zoya entered its plea of guilty. The prosecutor should not now be permitted to take advantage of the reverse onus of proof in s 6(1)(d) of the CLM Act.
3. In support of his proposition that the Prosecutor's reliance on the element of s 14(6)(a) of the CLM Act which exposed the Company to the higher maximum penalty, Mr Young submitted that this offended the principle established by De Simoni that an offender should not be punished for an offence more serious than the one with which it had been charged. He relied, in support of this proposition, in the present instance, on the decision of Cowdroy J in Environment Protection Authority v Australian Waste Recyclers 1 Pty Ltd [2005] NSWLEC 739 (Australian Waste Recyclers - a case to which I will need to return in my consideration of ongoing daily penalty issues) where his Honour had considered whether the De Simoni principle applied in the factual circumstances with which he was dealing. Mr Young submitted, effectively, that the conclusion which had been reached by Cowdroy J, that the De Simoni principle applied in those circumstances, precluding the imposition of a higher penalty were, by analogy, to be applied in these present circumstances.
4. During the course of his oral submissions, he expanded on his De Simoni argument, saying (Transcript 15 November 2022, page 18, lines 3 to 43): YOUNG: The point is the ratio of De Simoni is that this proposition does apply to a circumstance of aggravation that increases the maximum penalty for an offence. In De Simoni it was the same offence but a question of whether that circumstance of aggravation had been proven or not. And your Honour will see at the bottom of the first paragraph of the head note just before the holding of the Court and I should say this is a point that goes against me but I am obliged to bring it to your Honour's attention. The reason why that is the ratio of De Simoni is that the West Australian legislation at that time specifically provided that any circumstance of aggravation that is not what we might refer to as an aggravating factor but a circumstance which has the effect of increasing the maximum penalty must be charged in the indictment. Now my submission is that despite having been unable to locate such a provision in the legislation that governs this Court's sentencing exercise by applying it is appropriate for your Honour to apply the decision of De Simoni such that the increased substantive penalty is only available if it's pleaded in the Summons and forms the basis of the offender's conviction. Now I'm afraid I can't point your Honour to a previous New South Wales decision in which De Simoni has been adopted in that way. Your Honour is of course correct that the way it's conventionally applied relates to a finding that in effect amounts to a finding of having committed a different offence but my submission is that the logic applies equally to a conviction which gives rise to a different maximum penalty. … I do say it's not open to your Honour to find that the penalty of 1 million dollars in 14(6a) is applicable because the allegation that Zoya was responsible for the contamination, an allegation which is based on another provision of the Act that reverses the onus of proof was not pleaded.
5. With respect to the proposition that the Company was not, on the balance of probabilities, the cause of the contamination of the site, Mr Young took me to page 19 of the annexure to the SOAF (being portion of the recitals in the Prosecutor's Management Order served on the Company). He took me to recitals (E) and (F), these recitals being in the following terms: E The service station was previously owned and operated by Neil Gordon Clayton and Phyllis Jean Clayton between 1996 and 2016. During their ownership of the site, Midnight Oil Transport (contracted by Neumann Petroleum Pty Ltd) delivered fuel to the site on 28 June 2010, which resulted in a spill of 1,100 litres of premium unleaded fuel. The spill occurred across the central forecourt area and adjoining residential properties located to the south and southwest. The clean-up of impacted soil across all properties was managed by Neumann Petroleum Pty Ltd on behalf of Midnight Oil Transport. F Prior to purchasing 68 Craigie Avenue Kanwal in 2016, Zoya Investments (under business name Rana Petroleum) engaged a consultant to undertake a due diligence contamination assessment at the site. The due diligence report was limited and not in accordance with guidelines.
6. The transcript then records the following submissions made by Mr Young during an exchange with me on this point (Transcript 15 November 2022, page 19, lines 9 to 47): In my submission your Honour would accept that Zoya made a significant commercial mistake in acquiring a site which was already contaminated with inadequate due diligence and your Honour will see at page 16 of the statement of agreed facts that it is agreed that the land was significantly contaminated prior to the offence period. HIS HONOUR: Will I make of and I'm not sure I've seen it mentioned anywhere else the final sentence of the-- YOUNG: The clean up of impacted soil across all properties was managed? HIS HONOUR: Yes doesn't that lead to - setting aside the question for now as to the burden of proof and the like, doesn't that lead to the inference that the 2010 spill was in fact cleaned up? YOUNG: If that sentence was read in isolation I think I would have to agree with your Honour but it's for that reason that I referred to Recital (f) in my submission when your Honour has regard to the comments about due diligence being limited and not in accordance with guidelines it would not be open to your Honour to find that because the clean up was managed by Neumann Petroleum the clean up was effective and an insignificant contamination from the land was removed. HIS HONOUR: And I take it there is nothing anywhere else that is relevant to that proposition, is that it? YOUNG: My friend will correct me if I'm wrong but I think it is agreed that the Prosecution cannot prove beyond reasonable doubt what caused the significant contamination and I think my friend indicated earlier that the investigation is ongoing into those matters and indeed it's accepted on behalf of the defendant that the delay in complying with the Management Order has significantly frustrated that investigation. HIS HONOUR: Yes. YOUNG: Your Honour would not find as an aggravating factor your Honour would not give affect to the presumption in the relevant provision of the CLM Act and your Honour would find that Zoya has established by way of the agreed facts that the contamination was caused by something else.

Consideration

1. In the context of this submission made by Mr Young, it is appropriate to note that there was nothing in the Prosecutor's notices pursuant to ss 247E or 247J of the Criminal Procedure Act which identified specifically that the Prosecutor proposed to rely on the more serious of the offence options set out in that provision.
2. It is also to be noted that, although s 247E(1)(b) of the Criminal Procedure Act which provides that a prosecutor is to give the defendant notice of the prosecution's case that includes a statement of facts, the s 247E Notice, as filed with the Court in these proceedings, says: 247E(1)(b) statement of facts The Prosecutor's Statement of Facts is enclosed. The Prosecutor's Statement of Facts is based on the documents in the brief of evidence served on the Defendant on 22 September 2021, as footnoted.
3. The Prosecutor's Statement of Facts was not filed at the same time as the Prosecutor's s 247E Notice was filed. There was no statutory requirement for this to occur. However, as a consequence, I am unable to draw any inference as to what might have been contained in that statement of facts with respect to s 14(6)(a) of the CLM Act.
4. It is also appropriate to note that, in the Management Order issued to the Company pursuant to s 14 of the CLM Act on 21 February 2020, although the covering letter from the Director Regulatory Operations - Metro North of the Prosecutor did not expressly nominate the Company as being responsible for the contamination, the letter did say, with respect to s 14 of the CLM Act, the following: It is an offence under section 14 (6) of the Act to fail to comply with the order without reasonable excuse. The maximum penalty in court for this offence is $1 million and, in the case of a continuing offence, a further penalty of $66,000 for each day the offence continues.
5. That advice in the Prosecutor's letter inferentially provided notice to the Company of the element of s 14(6)(a) as the basis upon which the Management Order had been issued to it - being that the Prosecutor considered that the Company was responsible for the contamination.
6. Page 3 of the Management Order served on the Company, dated 21 February 2020, under the heading "2 Appropriate persons who are subject of this order", contains material relevant to whether the Company was to be regarded by the Prosecutor as responsible for the contamination and thus potentially (as set out in the covering letter) subject to a maximum initial penalty of $1 million. The relevant paragraphs are set out below.
7. The first paragraph under this heading nominates the Company as the appropriate person to be specified as subject of the order.
8. The second and third paragraphs then read: Where the EPA makes a management order in respect of significantly contaminated land, the order must specify one or more appropriate persons as subject of the Management Order. Zoya Investments has been chosen as the appropriate person because Zoya Investments is a "person who is responsible for significant contamination of the land" pursuant to section 13(2)(a) of the Act. Pursuant to section 6(1)(d) of the Act, Zoya Investments is responsible for the contamination as the person who carried on activities on the land that generated or consumed the same substances as those that caused the contamination unless it is established that the contamination was not caused by Zoya Investments. It has not been established that the contamination was not caused by Zoya Investments.
9. It is to be observed that this constituted advice to the Company that the Prosecutor proposed to regard the Company as being responsible for the contamination and thus subject to the higher maximum primary penalty specified by s 14(6)(a) of the CLM Act.
10. I have earlier set out paragraph E and F of the recitals in Part 1 of the Management Order. The above element from Part 2 constitutes express advice to the Company that, notwithstanding what was set out in recital E, the Prosecutor clearly regarded the Company as being a person responsible for the contamination (this being the necessary position arising to attract a higher maximum primary penalty specified by s 14(6)(a) of the CLM Act).
11. As a consequence of these elements of the matters set out in the Management Order, there is no rational basis upon which the Company can now complain that it was not on notice that any prosecution which might subsequently be commenced against it would be based on the first (higher maximum primary penalty) element specified by s 14(6)(a) of the CLM Act.
12. This, I am satisfied, constitutes a complete answer to the matters advanced by Mr Young in support of the proposition that the lesser primary penalty specified by s 14(6)(a) of the CLM Act should apply.
13. In reaching this conclusion, I am satisfied that the evidence contained in the SOAF (being the only evidence in these sentencing proceedings) does not properly provide any basis upon which I could conclude, on the balance of probabilities, that, for the purposes of s 6(1) of the CLM Act, the Company had established that the contamination was not caused by it.
14. Indeed, matters set out in paragraphs 62 and 63 of the SOAF provide a reinforcing basis for this conclusion. Although that which is set out in recital E (earlier set out) of the Management Order might provide a basis for concluding that Neumann Petroleum Pty Ltd was also a body which had contributed to contamination of the site, it does not establish any basis to conclude that the Company was not also a contributor to the contamination of the site and, therefore, appropriate to be nominated as responsible in the fashion set out in Part 2 of the Management Order.
15. Given these circumstances and the fact that the Company was on notice of the Prosecutor's intention and, therefore, could have sought to provide further evidence rebutting the presumption that it was responsible for the contamination and did not do so, I am satisfied that it is unnecessary to address further Mr Young's complaints concerning the Prosecutor's reliance on s 14(6)(a) of the CLM Act, save that it is necessary to respond, briefly, to his submission based on the principle arising from De Simoni.
16. It is clear from the decision of the plurality in De Simoni that what was there considered was, for the reasons explained by Gibbs CJ at 387, the fact that the then defendant had been charged with an offence pursuant to one section of the Western Australian Criminal Code (s 391 of that Code). He had been sentenced for an offence pursuant to that provision on the basis of the primary judge having regard to a factor of aggravation arising from the defendant having wounded the person from whom he had stolen money. However, the provision of the Code pursuant to which the charge had been laid did not incorporate such a factor of aggravation, but s 393 of the Code did so.
17. The primary judge's sentencing remarks, reproduced by the Chief Justice, at 386, make it clear that the primary judge had had regard to the aggravating factor of the wounding of the victim.
18. The effect of the decision of the plurality, now known as the De Simoni principle, is that a defendant cannot be punished for a separate offence of greater seriousness than that which has been charged against that defendant. That is not here the position. For the reasons earlier explained, it is clear that s 14(6)(a) of the CLM Act sets out two levels of penalty, in the alternative, in the same statutory provision. In circumstances where, as I have set out above, the Company was clearly on express notice that the Prosecutor regarded it as being responsible for the contamination of the site and, thus, exposed to the more serious penalty prescribed by the section, there is no basis upon which it could be concluded that the De Simoni principle has been breached.
19. I have earlier set out the terms of the Summons setting out the offence with which the Company is charged and the particulars pleaded by the Prosecutor in support of the charge. As can be seen, those particulars nominate s 14(6)(a) of the CLM Act as the foundation for the offence with which the Company has been charged. The Prosecutor submitted (and that submission was not contested by Mr Young) the legal representatives of the Company have never made any request for further and better particulars of any nature, let alone any request for clarification as to which of the elements in the provision was that upon which the Prosecutor relied for the charge.
20. However, there is no obligation on the legal representatives of the Company to help cure any defects which might otherwise have arisen in the Prosecutor's pleadings. Although I have found, for reasons earlier explained, that there is no proper basis for complaint concerning the Prosecutor's reliance on the higher penalty in s 14(6)(a) of the CLM Act, the proposition advanced by the Prosecutor that the Company should have sought further and better particulars in a fashion which would have enabled the Prosecutor to plead specifically the detail of the relevant element of the provision is misplaced. There is no obligation upon a defendant to cure any lacuna that might exist in a prosecutor's pleadings in such a fashion.
21. However, this position does not act to displace my earlier conclusion as to the validity of the Prosecutor's reliance on the higher starting penalty in the provision as a consequence of it being made completely clear to the Company in earlier communications that any prosecution commenced would be commenced on that higher penalty exposure basis.

The maximum initial and daily penalties for the offence

1. The maximum available penalty is to be taken as being the legislature's understanding and reflection of contemporary community standards concerning the offences involved (Environment Protection Authority v Timber Industries Ltd [2001] NSWLEC 25 at [33]). The size of the penalty also "indicates the gravity of the offence as perceived by the community": Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 (Camilleri's Stock Feeds) at 698.
2. The maximum penalty is significant in determining the objective seriousness of the offence: Plath v Rawson (2009) 170 LGERA 253; [2009] NSWLEC 178 at [57]. The maximum penalty demonstrates the seriousness with which the offence charged is viewed (Camilleri's Stock Feeds also at 698).
3. There was a significant contest, as earlier discussed, between the Prosecutor and the Company as to whether the Company was to be regarded as responsible for the contamination of the site for the purposes of 14(6)(a) of the CLM Act. For reasons earlier explained, I am satisfied that the position advanced for the Company is rejected and the initial maximum penalty for a triggering offence is the here applicable penalty.
4. This has the effect of making the maximum primary penalty available to be imposed on the Company one of $1 million.
5. It is to be noted that the Prosecutor and Mr Young both advanced their cases on the assumption that the maximum available daily penalty set by s 14(6)(a) of the CLM Act was $120,000 for each day the offence continued. During the course of preparing this decision, I established that the daily penalty applicable at the time of the Company's offending conduct was, in fact, a maximum of $66,000 per day, and that the daily penalties in s 14(6)(a) had only been increased with an operative date of 4 March 2022. I had my Associate advise the legal representatives of the parties that I proposed to proceed on the basis of the penalties which applied as at the date of the offending conduct as noted above.
6. The additional daily penalty, at a maximum of $66,000, able to be imposed for each day of the period during which the Company failed to comply with the Prosecutor's direction made the total maximum daily penalty, potentially available to be imposed on the Company, $23,232,000.
7. The combined maximum total penalty which the Company therefore faces for its offending conduct is $24,232,000.
8. Imposition of a total penalty fixed by relating it to this maximum total penalty (even having regard to how the Company's offending conduct is to be characterised as to its seriousness - as later discussed) would clearly give rise to an entirely disproportionate and crushing overall total starting penalty before consideration of moderation as a consequence of the Company's guilty plea or of any potential necessity to reflect the overall totality of the Company's offending conduct.
9. I later discuss how, in my assessment of what would be the appropriate level of daily penalty to impose, this should reflect a first step in moderating the overall totality of the starting penalty to be imposed on the Company.

Harm caused by the Company's offending conduct

1. Preston CJ set out, under the heading "Objective harmfulness of offence", in Environment Protection Authority v Waste Recycling and Processing Company (2006) 148 LGERA 299; [2006] NSWLEC 419 (Waste Recycling) (at [145]), a number of principles. The first of them, relevant in these proceedings, is that: Harmfulness needs to not only be considered in terms of actual harm, the potential or risk of harm should also be taken into account.
2. Although the Company's initial offending conduct may not, in and of itself, have caused any significant actual environmental harm, nonetheless, the breach also undermines the integrity of the regulatory regime established by the CLM Act. That undermining of such a regulatory regime, even in the absence of actual harm arising from the unlawful activities, has been confirmed by the Court of Criminal Appeal in Budvalt Pty Ltd v Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator [2022] NSWCCA 9 as being a factor capable of being taken into account when sentencing for a breach or breaches of such a regulatory regime as is here the position.
3. There is no suggestion that the Company was unaware of the requirements of Direction D(ii) of the Management Order. As a consequence, its course of conduct is demonstrative of a willingness to ignore, and thus undermine, the regulatory regime established by the CLM Act to prevent, control and order rectification contamination.
4. Taken together, the combination of the initial failure to comply with Direction D(ii) of the Management Order, and the failure to do so for nearly a year after the required date for compliance, cannot be regarded as trivial.

Introduction

1. I have earlier set out the terms of s 97 of the CLM Act, being the provision that sets out the matters which I am required to consider when imposing a penalty on the Company for its offending conduct. It is to be noted that, with the exception of s 97(1)(f) ‑ a provision not here relevant, the remainder of the matters set out in s 97(1) also assist to inform matters relating to damage to the regulatory system with which I have dealt in the immediately preceding section. However, I now set out how the advocates addressed the matters in s 97 of the CLM Act in their written submissions (footnotes omitted). These provide a sufficient summary of the relevant positions without the necessity to cite transcript passages.

The extent of harm ‑ s 97(1)(a)

1. The Prosecutor did not propose that there was any proof that there had been any actual harm of any significance warranting consideration in these sentencing proceedings caused by the Company's failure to comply with Direction D(ii) of the Management Order.
2. On this point Mr Young submitted: 14 … While the failure to comply with Action D(ii) for more than a year was a serious offence, the harm caused "by the commission of the offence" was of a relatively low order. Further, Zoya's belated compliance with Action D(ii) ensures that no harm will be caused in the future. 15 It is accepted that the "pin hole leak" would have caused harm whenever bowser 1 / 2 was in use during the 352-day period. However, this harm was not quantified in the expert report. It is open to the court to find, on the balance of probabilities, that the harm caused by the "pin hole leak" was relatively insignificant and of a similar magnitude to fuel spillage by customers.

Risk of harm ‑ s 97(1)(b)

1. The Prosecutor submitted, on this point: 41. A degree of risk of harm to the environment and human health may be caused where the commission of an offence delays appropriate remediation, thereby facilitating the ongoing potential release of contaminants into the environment. 42. It is not possible on the available data to determine the exact volume of petroleum that leaked from the UPSS as a result of the Offence. However, it is an agreed fact that: a. the fuel line leading from one of the underground petrol storage tanks to an aboveground bowser was leaking every time the pump at that bowser was in use during the Offence Period, and b. there was a risk, until 26 July 2022, when further testing was carried out and the extent of harm became known, that a potential of 3,210L of petroleum had leaked from the UPSS during the Offence Period. 43. Thus, there was the potential for ongoing harm to human health and the environment during the Offence Period.
2. Mr Young did not expressly address this proposition in his written (or oral) submissions.

Practical measures available to the Company ‑ s 97(1)(c)

1. The Prosecutor submitted, on this point: 44. Zoya could have easily avoided committing the Offence by complying with the requirements of the Amended Management Order. Zoya advised the EPA that it had engaged various duly qualified persons throughout the Offence Period to carry out the works required. Zoya could have instructed any of those duly qualified persons to commence works at any point prior to the Offence Period, in compliance with the Amended Management Order.
2. Mr Young did not expressly address this proposition in his written (or oral) submissions.

Foreseeability of harm ‑ s 97(1)(d)

1. The Prosecutor submitted, on this point: 44 It is reasonably foreseeable that Zoya's failure to engage a duly qualified person to rectify a known anaconda leak and a known leak in its underground petrol storage tanks for a period of 352 days would create a risk of ongoing harm arising from petroleum leaking into the environment. The harm likely to be caused in those circumstances was foreseeable to a reasonable person in that position. 45 The fact that this risk may not have eventuated does not detract from the conclusion concerning the foreseeability of the risk.
2. Mr Young did not expressly address this proposition in his written (or oral) submissions.

The extent of the Company's control ‑ s 97(1)(e)

1. The Prosecutor submitted that the Company had had complete control over all events and omissions relevant to its failure to comply with Direction D(ii).
2. Mr Young did not contest this position advanced by the Prosecutor.

Consideration

1. It is unnecessary to address each of the above factors in any detail. This is because I have concluded that the two primary matters requiring consideration concerning the nature of the Company's offending conduct are:

• the damage to the regulatory system as earlier discussed; and
• in the context of the mandated heads of consideration set by s 97 of the CLM Act, the risk of harm to the environment, as set out above in the extract from the Prosecutor's written submissions, continued throughout the period of the Company's offending conduct because of the lack of knowledge of the state of the Company's petroleum storage and customer product delivery facilities in circumstances where it was known that the site, and the adjacent property, was significantly impacted, already, by petroleum product contamination.

1. The failure to comply with Direction D(ii) of the Management Order for the period of 352 days meant that no proper understanding of the risk of further harm was available during that period and, thus, what the extent of the safety and contamination imperatives might have been necessary to rectify what would otherwise have been disclosed had Direction D(ii) been carried out.

Introduction

1. Before turning to the various matters arising pursuant to s 21A(3) of the Sentencing Procedure Act potentially here engaged, it is appropriate to make a brief general observation concerning how these matters are to be approached. This is necessary because the burden of proof differs depending on the nature of that which requires consideration.
2. For a favourable subjective factor applicable to the Company, it is only necessary for the Company to establish that factor on the balance of probabilities (R v Olbrich (1999) 199 CLR 270; [1999] HCA 54 at 281).

Aggravation

1. The Prosecutor does not suggest that any factor of aggravation is applicable.

Introduction

1. This section of my consideration requires an analysis of those matters that relate to the Company itself, rather than to the offending conduct that gave rise to the charge to which it has pleaded guilty.

Environmental harm - s 21A(3)(a)

1. The first relevant factor (s 21A(3)(a)) is the extent of the harm caused by the Company's offending conduct. This has earlier been addressed as both a matter of principle and as called up by s 97 of the CLM Act. It does not weigh in the Company's favour.

Prior offences - s 21A(3)(e)

1. The second relevant factor (s 21A(3)(e)) is whether the Company has "any record (or any significant record) of previous convictions". The Company has no such record and this is to be weighed in its favour in my instinctive synthesis of the appropriate sentences to be imposed on it.

The likelihood of the Company reoffending - s 21A(3)(g)

1. In light of the belated compliance by the Company, I am satisfied that there is some likelihood of the Company reoffending in the same fashion which has given rise to the charge addressed in these proceedings.
2. This is because the Company demonstrated a willingness to ignore not only the original requirement for compliance with Direction D(ii) of the Management Order, but also its willingness to ignore the subsequent warnings provided by the Prosecutor to the Company reminding it of the necessity to comply with the outstanding element of the direction.
3. However, I have a hope (but only a guarded hope) of a positive prospect of the Company avoiding activities of the nature with which it has been charged. This prospect will be reinforced not only by the substantial primary penalty to be imposed on the Company, but also by the fact that is to be subject to an additional total daily penalty arising because of its failure, for an extensive period of time, to comply with the requirements of Direction D(ii) of the Prosecutor's Management Order. The reminder of the possibility of daily penalties arising from ongoing offending conduct should be a salutary further lesson to the Company and reinforce the need not to reoffend.

Contrition and remorse - s 21A(3)(i)

1. In Chief Executive, Office of Environment and Heritage v Ausgrid (2013) 199 LGERA 1; [2013] NSWLEC 51, at [80], Pepper J summarised the four types of action set out by Preston CJ in Waste Recycling as ones which may demonstrate genuine contrition and remorse in satisfaction of these requirements [citations excluded]: (a) first, the speed and efficiency of action rectifying the harm caused or likely to continue to be caused by the commission of the offence; (b) second, the voluntary reporting of the commission of the offence and any consequential environmental harm to the authorities; (c) third, taking action to address the cause of the offence; and (d) fourth, the personal appearance of corporate executives in court to give personal evidence of the Defendant's regret and a plan of action to avoid repetition of the offence.
2. The two directors of the Company were in court for the duration of the sentencing hearing. This can be taken to be an acknowledgement (albeit a very minor one) of the Company's contrition and remorse for its offending conduct. However, as no evidence was adduced by the Company that could otherwise be construed as demonstrating any of the other aspects potentially establishing contrition and remorse, this factor is to be given some (but little) weight in the Company's favour.

The Company's guilty plea - s 21A(3)(k)

1. The next relevant factor is s 21A(3)(k). This provision requires that I have regard to the fact that the Company has pleaded guilty to the charge for which it is now to be sentenced.
2. For reasons later separately explained, the utility of this plea (including its timing) is a matter requiring specific consideration of its benefit to the administration of the system of justice. The extent to which this factor acts in the Company's favour is later discussed.

The extent of assistance given to the Prosecutor - s 21A(3)(m)

1. The Company's final relevant subjective factor is s 21A(3)(m).
2. The Prosecutor addressed this in paragraph 57 of the Prosecutor's written submissions in the following terms: 57 Zoya has provided no assistance to authorities. For the majority of the investigation of the Offence, the Offence Period and the post Offence Period, Zoya was non-responsive when contacted by EPA authorised officers. Since the commencement of the proceedings, Zoya has delayed complying with its obligations according to the Court timetable.
3. Although I raised this matter with Mr Young in the context of paragraph 20 of his written submissions, he made no express submission that I should conclude the Company had, in fact, cooperated with the Prosecutor.
4. However, the Company had cooperated with the Prosecutor if only in the preparation of the extensive SOAF earlier reproduced. This provided a proper basis for the conduct of the sentencing hearing without the necessity for the Prosecutor to call any evidence to establish the factual elements to which the Company had agreed. This cooperation with the Prosecutor is a factor to be weighed modestly in the Company's favour.

Characterisation of the Company's offending conduct

Introduction

1. In these proceedings, both the Prosecutor and Mr Young made submissions proposing how I should characterise the Company's offending conduct.
2. It is customary, when sentencing for environmental offences, to describe where the relevant offending conduct might fall within a range which might be defined as running from minor offending conduct through to that which could be characterised as being toward the worst type of conduct (noting, however, that it is not appropriate to characterise conduct as being the worst case as it is always possible to hypothesise something that is even less acceptable (Veen v The Queen (No 2) 164 CLR 465; [1988] HCA 14 (Veen v The Queen (No 2)) at [478])).
3. It is also to be noted that such a process of characterisation is not one of mathematical precision warranting identification on some statistical basis (such an approach was expressly disapproved by the Court of Criminal Appeal in Camilleri's Stock Feeds).
4. In this context, it is convenient to use general descriptors of how such offending conduct might be characterised; these being as within the lower, middle, or upper range of such conduct. Having reached the determination in that very broad fashion, it is then appropriate to describe, again in a general context, whereabouts within the relevant range the specific conduct falls.

The Prosecutor's submissions

1. The Prosecutor's written submissions summarised what the Prosecutor considered was to be taken from the circumstances of the Company's offending conduct in the context of s 97(1)(a) and (b) of the CLM Act. In this respect, it is appropriate to set out paragraphs 42 and 43 of the Prosecutor's written submissions. These were in the following terms (SOAF references omitted): 42. It is not possible on the available data to determine the exact volume of petroleum that leaked from the UPSS as a result of the Offence. However, it is an agreed fact that: a. the fuel line leading from one of the underground petrol storage tanks to an aboveground bowser was leaking every time the pump at that bowser was in use during the Offence Period, and b. there was a risk, until 26 July 2022, when further testing was carried out and the extent of harm became known, that a potential of 3,210L of petroleum had leaked from the UPSS during the Offence Period. 43. Thus, there was the potential for ongoing harm to human health and the environment during the Offence Period.
2. The Prosecutor next submitted that the Company had had complete control over the causes and potential consequences of any harm arising from the Company's failure to comply with Direction D(ii) of the Management Order (s 97(1)(c) and (e) of the CLM Act) and that any harm potentially arising from the Company's offending conduct was reasonably foreseeable (s 97(1)(d) of the CLM Act).
3. The Prosecutor also submitted that the failure of the Company to respond to the written and verbal reminders of the necessity to fulfil the requirements of Direction D(ii) of the Management Order (including reminders as to the penalties to which the Company was potentially exposed) was also a factor to be considered in my assessment of the objective seriousness of the Company's offending conduct. In light of this, the Prosecutor advanced the submission, in paragraph 51 of the Prosecutor's written submissions, that: 51. Taking into account the above factors, the Offence should be regarded as objectively serious and regarded as falling towards or within the middle range of objective seriousness.

Submissions for the Company

1. Mr Young addressed how the Company's primary offending conduct should be characterised at paragraph 18 of his written submissions. He did so in anticipation that I would accept his submission that the Company was not responsible for causing the contamination of the site. He wrote: 18 Zoya accepts responsibility for an unacceptable delay of almost a year in addressing the concerns raised in the EIT report. However, the duration of the offence (approximately 12 months) must be viewed in the context of the Management Order which provided some 2 months for compliance with Action D(ii). It is submitted that the offence is of low objective seriousness when compared to the other circumstances in which an offence against s 14 of the CLM Act may be committed.
2. He added, as matters he submitted I should consider on the question of objective seriousness: 19 The gravamen of the offence is that Zoya hindered the EPA's investigation of the cause of the significant contamination, by failing to complete routine maintenance which could have, but ultimately did not, reveal a causal connection to the significant contamination. The offence does not have features which might be expected of an offence in the middle or high range, such as responsibility for the contamination in the first instance or a complete (rather than partial) failure to fulfil the requirements of a management order.
3. With respect to the potential for harm during the 352 days during which the Company failed to comply with the Management Order after the mandated date until when the direction was complied with, Mr Young had earlier said, in his written submissions on sentence, the following at paragraphs 14 to 16 (footnotes omitted): 14 In assessing the seriousness of the offence the Court is required to consider "the extent of the harm already caused … by the commission of the offence" and "the degree of risk that harm will be caused by the commission of the offence." While the failure to comply with Action D(ii) for more than a year was a serious offence, the harm caused "by the commission of the offence" was of a relatively low order. Further, Zoya's belated compliance with Action D(ii) ensures that no harm will be caused in the future. 15 It is accepted that the "pin hole leak" would have caused harm whenever bowser 1 / 2 was in use during the 352-day period. However, this harm was not quantified in the expert report. It is open to the court to find, on the balance of probabilities, that the harm caused by the "pin hole leak" was relatively insignificant and of a similar magnitude to fuel spillage by customers. 16 The expert report found that it was "not possible … to determine the exact volume of petroleum that leaked from the UPSS" and the vapour recovery pipework "is unlikely to leak liquid petroleum." However, the EIT report stated that the failed acoustical test was "capable of detecting a leak of 0.38 L per hour with a probability of detection of at least 0.95 and a probability of false detection of 0.05 or less." Therefore, the expert concluded that "there was a risk that a potential of 3,210 L of petroleum could have leaked from the UPSS during the Offence Period."

Consideration

1. In addition to assessing how the Company's offending conduct should be classified by its failure to comply with Direction D(ii) of the Management Order by the nominated date in September 2020, a classification necessary for striking a starting penalty for that primary offence, it is also necessary to consider, separately for the purposes of assessing whether (and, if so, at what daily rate), a daily penalty should be imposed on the Company, how the Company's ongoing failure should be classified.
2. It remains the position that the Company failed to do that which was required of it by Direction D(ii) of the Management Order by 18 September 2020 and continued to do so for nearly a year thereafter. As a consequence, whatever might have been the actual rate of any spill occasioned by the discovered leak, nonetheless, the risks arising from that were left unabated as a consequence of the Company's dilatory response to that which it was required to undertake as a result of the ignored element of the Management Order.
3. I have concluded that both the elements of the Company's offending conduct (its failure to comply with Direction D(ii) of the Management Order by 18 September 2020 and its continuing failure to do so for 352 days thereafter) should be characterised as being toward, but not at, the upper end of the low range of offending conduct. This characterisation provides me with appropriate guidance, as part of my instinctive synthesis of the objective nature of the offending conduct and the Company's subjective factors, in determining what is the appropriate starting penalty for each of these aspects of the Company's offending conduct.

Introduction

1. I am required to take into account the question of both specific and general deterrence. As the High Court put it, in Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 (Walden v Hensler), "the chief purpose of the criminal law is to deter those who are tempted to breach its provisions" (at 569 per Brennan J).
2. The penalty must involve an element for both general and specific deterrence: Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357.

Specific deterrence

1. Although the Company has, now, satisfied the Management Order, I am satisfied that a degree of specific deterrence (albeit not to a significant extent) should be incorporated in the penalties to be imposed on the Company. This is to act as a reminder to the Company of the unacceptability of its offending conduct.

General deterrence

1. It is also necessary to consider the extent to which sentencing the Company for its offending conduct conveys a measure of general deterrence to those who might contemplate carrying out analogous unlawful activities.
2. As Brennan J also said in Walden v Hensler, at 570: But when a law proscribes conduct which an ordinary person without special knowledge of the law might engage in in the honest belief that he is lawfully entitled to do so, the secondary deterrent purpose - that is, the purpose of educating both the offender and the community in the law's proscriptions so that the law will come to be known and obeyed - must be invoked to justify the imposition of a penalty for breach. In such a case, care must be taken in imposing a penalty lest the offender be made to shoulder an unfair burden of community education.
3. In this context, it is to be observed that matters of general deterrence are not, in circumstances such as these, directed solely at an amorphous and unconfined, wide public audience. The need for an educational outcome requires sending a deterrent message to those who undertake business activities of a similar service station or related petroleum storage type which gave rise to this charge to be aware of the potential consequences of insufficiently diligent monitoring of, and prevention and rectification of spill risks from, their activities.
4. Whilst it is, clearly, not appropriate to impose a disproportionate penalty on the Company for its offending conduct, I am satisfied that it is appropriate to have regard to the need for an element of general deterrence in the penalty which I am to impose.
5. In addition, striking a penalty which does incorporate a daily penalty for the 352 days throughout which the Company failed to satisfy Direction D(ii) and dissembled (to put it at its most charitable) in communications with the Prosecutor by falsely stating that the UPSS tanks were to be replaced and that development applications were being pursued to that end is something that would not go unpunished.

Comparability in sentencing

1. Whilst this sentencing process must be undertaken in light of the specific facts and circumstances of the Company's offending conduct, nonetheless, regard must be had to such guidance as may be obtained from such other cases as might have some degree of comparability with the offending conduct to be assessed (Chief Executive of the Office of Environment and Heritage v Bombala Investments Pty Ltd (2013) 199 LGERA 236; [2013] NSWLEC 185). However, no comparable sentencing pattern information is available.

Introduction

1. In determining the appropriate starting penalty for the Company, I must undertake the mandated process of instinctive synthesis (Markarian v R (2005) 229 CLR 357; [2005] HCA 25 - Markarian) having regard to all the objective factors of the offending conduct (as earlier discussed) and the subjective factors peculiar to it that temper what might otherwise be the penalty to be imposed.
2. The sentence to be imposed must reflect all the relevant objective circumstances of the offence and subjective circumstances of the Defendant (Veen v The Queen (1979) 143 CLR 458; [1979] HCA 7 and Veen v The Queen (No 2)). The sentence is not to exceed what is "justified as appropriate or proportionate to the gravity of the crime considered in the light of its objective circumstances" (Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at 354, citing Veen v The Queen (No 2)).
3. I have had regard to the Company's limited range of positive subjective factors as part of the instinctive synthesis necessary to be undertaken by me to determine the appropriate starting penalties for both the initial failure to comply with Direction D(ii) of the Management Order and the Company's ongoing failure to comply with that requirement. Although limited, nonetheless, the Company is entitled to the full measure of their benefit, in my combined consideration of those subjective factors and the Company's offending conduct in instinctively deriving the appropriate starting sentences to be imposed on the Company.
4. This process permits me to arrive at a starting sentence for the offence to which the appropriate discount is to be applied for the entry of the Company's guilty plea.
5. There are two elements to which consideration needs to be given for the purposes of determining the appropriate starting penalty or penalties to be imposed on the Company. The first of those is that which can be described as the base penalty, being the penalty founded on the fact that the Company, by 18 September 2020, failed to comply with the directive which had been given to it.
6. In addition, because the Company's offending conduct was conduct which continued until it eventually complied (352 days later) with the direction which had been given to it and effected the implementation of the required remediation measures, the offence creating statutory provision (s 14(6)(a) of the CLM Act) provides for an additional daily penalty of $66,000 for each day during which the Company's offending conduct continued.

The appropriate penalty for the initial breach

1. I have earlier explained why the Company is potentially subject to a maximum penalty of $1 million pursuant to s 14(6)(a) because the Company is to be regarded as responsible for the contamination of the site. I have also explained how the Company's conduct in failing to comply with the direction given by the Prosecutor should be regarded as being towards the upper end of the low range of objective seriousness. Having regard to this characterisation and the limited range of positive subjective factors in the Company's favour, undertaking the mandated process of instinctive synthesis (Markarian) causes me to conclude that the appropriate starting sentence for the Company's offending conduct is $300,000.

A daily penalty for the Company's continuing conduct

Submissions

1. During the course of the hearing, I asked the Prosecutor and Mr Young for the Company how each of them submitted I should approach the question of a daily penalty.
2. In response, the Prosecutor handed up two decisions of judges of this Court which were said to exemplify the different approaches which had been taken to the imposition of daily penalties appropriate to be imposed for environmental crimes. The nature of the offending conduct in each instance is not relevant. However, it is appropriate to note that, in each instance, there was a significant time period which had elapsed to which the daily penalty could be applied. In each instance, the potential daily penalty was $120,000, nearly double the maximum daily penalty applicable in these proceedings. In each instance, the overall potential maximum penalty would have been multiple tens of millions of dollars which, had any daily penalty proportionate to the appropriate primary penalty being imposed on the same ratio as the primary penalty was to the maximum available for that offending conduct, the overall total penalty to be imposed would have been entirely disproportionate to the offending conduct.
3. The first of these, the decision of Cowdroy J in Australian Waste Recyclers, resulted in the imposition of a daily penalty at the rate of $1,000 per day, with consideration as to whether there should be amelioration of the total penalty being addressed in light of the overall amount arising from the primary penalty and the total quantum from the daily penalty. The primary penalty imposed was $150,000. This consideration of the appropriateness of the initially derived total of the primary penalty and the added daily penalty computation resulted in moderation of the total penalty to be imposed on that defendant of $250,000 in lieu of the combined penalty of $277,000.
4. As consequence, although a daily penalty was imposed (and determined to be necessary as an element of both specific and general deterrence), that daily penalty was struck at the more modest level earlier noted, and, for the purposes of his Honour's determination of the appropriate final total penalty, a further degree of moderation was undertaken to reflect derivation of an appropriate combined total penalty of the primary penalty and the additional daily penalty.
5. The other case, Environment Protection Authority v Unomedical Pty Limited (No 4) [2011] NSWLEC 131 decided by Pepper J, had similar potentiality to result in a combination of a primary penalty and a further daily penalty in the tens of millions of dollars - being an amount entirely disproportionate to the overall offending conduct. In that instance, her Honour decided not to impose a daily penalty but to have regard to the availability of a daily penalty in her assessing of the objective seriousness of that defendant's offending conduct for determining an appropriate primary penalty
6. The Prosecutor advanced no submission to me as to which of these alternatives was appropriate to be adopted by me, merely noting that they provided examples of the two different approaches potentially available.
7. Mr Young did not specifically address, in his submissions on behalf of the Company, which approach was preferable, submitting instead that, whatever total penalty I might choose to impose, it should be proportionate to the nature of the offending conduct - emphasising the primary position on behalf of the Company that I should not conclude that the Company should be regarded as having caused the contamination and thus falling within the category of offending conduct potentially liable to the maximum penalty of $1 million but, rather, fell within the offending conduct of the lesser time, conduct which attracted the lower maximum primary penalty of $137,500.

Consideration

1. The more difficult element in this sentencing process has arisen in my consideration of whether and, if so at what level, I should determine that it is appropriate to impose a daily penalty on the Company for the 352 days during which it continued to fail to implement Direction D(ii) of the Management Order. It is unnecessary to set out details of the various aspects of the false starts and dissembling conduct on the part of the Company during this period.
2. In considering the first step (whether to impose a daily penalty), I am satisfied that it is clear that the Company did not take seriously the mandatory nature of what was required of it, despite the various warnings given (written and oral) by the Prosecutor that the Company was required to carry out what had been mandated by Direction D(ii) of the Management Order.
3. Striking a daily penalty for the length of time of the Company's ongoing offending conduct at a level commensurate with my characterisation of the offending being toward the top of the low range of offending conduct and at the ratio of the starting penalty to the maximum penalty for the triggering offending conduct would lead to a starting daily penalty of over $19,000 per day, with a resultant accumulated daily penalty of nearly $7,000,000 for the 352 days of the Company's offending conduct.
4. It will also, later, be necessary to consider the extent of moderation of the overall penalty to reflect appropriate totality and accumulation. However, I am satisfied that the appropriate daily penalty should not be so high as to result in a total daily penalty that is inappropriately disproportionate to the penalty to be imposed on the Company for its primary offending conduct.
5. Although giving a mathematically precise result, such an additional total daily penalty would be one which would impose a disproportionately crushing burden on the Company and leave it with a genuine sense of grievance as to the overall outcome of the sentencing process for its offending conduct.
6. I am satisfied that the approach adopted by Cowdroy J in Australian Waste Recyclers is appropriate to be adopted in these proceedings. Although the imposition of a daily penalty on the Company will necessarily result in a requirement to consider, and moderate, the overall total penalty, adding a daily penalty to the appropriate primary penalty is, I am satisfied, essential for reasons of both specific and general deterrence.
7. For this reason, I have concluded that it would be appropriate (even before consideration of matters of totality and accumulation arising from the sentence for the Company's triggering offending conduct and the daily penalty during its ongoing offending) that I should temper the starting daily penalty and strike it at the rate of $500 per day. This, I have concluded, is appropriate even though, on one view of it, the Company's ongoing offending conduct could arguably be regarded as more egregious than the offending conduct which resulted in the triggering penalty for the failure to comply with Direction D(ii) of the Management Order by 18 September 2020.
8. However, it is also to be noted that, even striking the starting daily penalty at a level which could be regarded as less (indeed significantly less) than the offending conduct of the Company would otherwise warrant, because of the lengthy period of time during which the Company continued to fail to meet the obligations imposed on it by Direction D(ii) of the Management Order, in circumstances where no evidence has been provided in the SOAF as any justification for this failure, imposition of a substantial cumulative total daily penalty for the 352 days during which the Company's offending conduct continued is warranted - as to fail to do so would not adequately reflect the nature of the Company's total continuing offending conduct.
9. Calculated on the daily basis of $500, the additional total penalty to be imposed on the Company for its ongoing breach of s 14(6)(a) of the CLM Act is $176,000.
10. It is to be noted that, as with the starting penalty earlier set out, the total daily penalty is also to be subject to the same rate of discount pursuant to s 22 of the Sentencing Procedure Act as arises for the primary penalty to be imposed on the Company for its initial breach of s 14(6)(a) of the CLM Act.

Introduction

1. The maximum discount on the otherwise applicable starting penalty to be afforded to a defendant who has pleaded guilty is 25% (R v Thomson; R v Houlton (2000) 49 NSWLR 383; [2000] NSWCCA 383). The full measure of this conventionally maximum discount is only afforded to those defendants who enter a guilty plea at the earliest opportunity.
2. In these proceedings, there is a contest between the parties as to what discount the Company should be entitled to because the guilty plea was not entered at the earliest opportunity.

The Prosecutor's submissions

1. The Prosecutor's written submissions set out, at paragraph 54, the relevant chronology between the commencement of the proceedings and the Company eventually entering its guilty plea. The paragraph contains the relevant details of the intermediate procedural steps. The paragraph is in the following terms: These proceedings were commenced on 16 September 2021. The matter was listed for first mention on 18 October 2021 and was adjourned on that occasion, as well as the following occasion, to allow Zoya's solicitor to obtain instructions. At the third mention on 12 November 2021, Zoya entered a plea of not guilty and the matter was listed for a two-day hearing on liability. It was not until 21 June 2022, after the prosecutor had complied with its notice requirements pursuant s247E and 247J of the Criminal Procedure Act 1986, that Zoya entered a plea of guilty.
2. The Prosecutor's submission with respect to the timing of the entry of the Company's guilty plea was set out in paragraph 55 of the Prosecutor's sentencing submissions in the following terms: Zoya pleaded guilty to the Offence approximately 9 months after the proceedings were commenced. In those circumstances, Zoya's plea should be regarded as having limited utilitarian value.

The submissions for the Company

1. In his written submissions, Mr Young addressed the timing of the Company's guilty plea in the following terms: 20 It is conceded that Zoya's guilty plea was not entered at the earliest possible opportunity. However, substantial utilitarian value should be attributed to the plea in light of the complexity of the matter and the volume of evidence served by the prosecution. The affidavit of Donna Phelan included 4 volumes of annexures amounting to more than 800 pages, with a further 300 pages of evidence annexed to the affidavit of Simon Lemont. 21 The offence in s 14 of the CLM Act is subject to a defence of reasonable excuse (as to which the accused bears an onus of proof: s 99). Neither the offence nor the defence appear to have been the subject of previous judicial consideration. These are further matters which inform, to some extent, the delay between the filing of the notice of the prosecution case on 21 January 2022, and the entry of the plea of guilty on 1 July 2022.
2. In his oral submissions, Mr Young added on this point (Transcript 15 November 2022, page 29, line 50 to page 30, line 45): YOUNG: … the proposition which I am attempting to make good there is this is not a case where the offender commits the offence and immediately can be taken to have full awareness that they have committed an offence to which they ought to admit and plead guilty. This is a rather complex offence which is subject to a defence of reasonable excuse which the prosecution would bear the onus of proving beyond reasonable doubt when your Honour comes to consider the weight. HIS HONOUR: No The prosecution would have to rebut it beyond reasonable doubt. YOUNG: Yes, I may have said prove-- HIS HONOUR: Provided you had in the first instance established on balance of probabilities, possibilities, the potential availability of the defence. YOUNG: Yes. HIS HONOUR: Two step dance as it were. YOUNG: Yes. I accept that the defendant would bear and evidential burden of pointing to evidence. HIS HONOUR: First. YOUNG: Yes, your Honour. The relevance of this is not to suggest now that there was such a reasonable excuse, it is to explain why the defendant prior to having been prosecuted and obtaining the brief of evidence and obtaining legal advice in relation to that brief of evidence may not have accepted that an offence had obviously been committed. The excuse, and I hesitate to use the word because it is not advanced by way of defence to the charge is the matter that your Honour has been taken to about the defendant's intention to redevelop the site. As I said, your Honour, once the evidence was served and the many pages and volumes of annexures had then reviewed and the circumstances in which the development application was made and subsequently withdrawn as set out in the agreed statement of facts, once all of that material had been considered then the defendant determined to enter a plea of guilty. My submission to your Honour is that the plea of guilty was entered at, perhaps I'm reluctant to say, the earliest reasonable opportunity because there was a delay of some months between the service of the brief of evidence and the entry of the plea of guilty but it is my submission that it would not have been reasonable for the defendant to plead guilty to the offence at the first mention.

Consideration

1. Mohindra v R [2020] NSWCCA 340 (Mohindra) although dealing with an appeal against the decision of a sentencing judge in the District Court not to grant any discount on sentence for a late guilty plea in a child sexual assault case (in the context of s 22A of the Sentencing Procedure Act, a provision dealing with sentencing for offences charged on indictment) is, by analogy, equally applicable in these proceedings. In Mohindra, relevantly, Basten JA (Johnson and Davies JJ agreeing) said, at [42]: The section imposes an obligation to have regard to the fact of the pleas, the time at which it was proffered and the circumstances in which that occurred; however, the court has a discretionary power as to whether to impose a lesser penalty than it would otherwise have imposed and as to the extent of the reduction. That discretion is regulated, but not confined, by the guideline judgment in R v Thomson; R v Houlton. The purpose of the guidance given in Thomson was to ensure a degree of consistency and transparency in giving effect to s 22. The result of the guideline judgment was not to "constrain the exercise of the discretion" nor to prescribe a particular outcome. However, the Court expressed the opinion that "the appropriate range for a discount is from 10-25 per cent." Discounts outside this range are uncommon, although examples of 5% discounts are to be found.
2. These comments are equally applicable in the present case.
3. I am not satisfied that the timing of the Company's guilty plea renders it of as little utilitarian value as might otherwise be inferred from the relevant timing of its entry - the first mention being in October 2021 and the entry of the guilty plea being on 21 June 2022. Although a delay of some nine months, the entry of the guilty plea has avoided the necessity for a contested hearing on guilt, a contested hearing where it would have been necessary to consider potentially complex evidentiary issues relating to the extent and timing of contamination impacts arising out of the Company's activities not only on its own site, but also on the adjacent property.
4. Although it was a lengthy delay, I am satisfied that it would be appropriate to apply the ordinary conventional lower limit discount of 10% as noted in the above‑cited passage from Mohindra. I see no reason why I should go outside this conventional range and apply any lesser discount then 10% for the Company's guilty plea to each of the appropriate starting penalties.

Totality and accumulation

1. I must first fix the appropriate sentence for each aspect of the offending conduct to be punished and then consider the question of totality (Pearce v The Queen (1988) 194 CLR 610 at [45]).
2. When reviewing the resulting aggregate sentence, I must consider whether it is "just and appropriate" and reflects the Company's total criminality (Mill v Queen (1988) 166 CLR 59 at 62-63; Pearce v The Queen at [49]).
3. For reasons earlier explained, the Company is subject to two penalties (being for the breach of s 14(6)(a) of the CLM Act as at the trigger date and for an additional potential daily penalty of $66,000 for the 352 days after the trigger date).
4. Although, for reasons earlier explained, the second accumulated penalty, calculated at the daily rate of $500, arises out of the Company's failure of compliance as at the trigger date (the trigger date), this still does, in my assessment, give rise to the necessity for any penalty moderation in the conventional fashion which would arise out of an accumulation of penalties which would be imposed for a series of different offences arising out of the same incident when those multiple offences constituted a single course of conduct.
5. Although it could be considered that the structure of the penalty provisions in s 14(6)(a) of the CLM Act operate together and do not automatically give rise to any necessity to moderate the total penalties for reasons of totality and accumulation, I am satisfied that the approach taken by Cowdroy J in Australian Waste Recyclers, of moderating the daily penalty, is also here appropriate. For that reason, although the appropriate daily penalty for the Company (after a 10% discount for the guilty plea) was $158,400, I am satisfied that this should be moderated to $140,000 to reflect appropriate consideration of totality and accumulation of punishment of the Company's overall offending conduct.

A publication order

1. The Prosecutor proposed that an order should be made requiring the Company, at its expense, to cause a notice to be published in the online magazine and the online weekly newsletter, being the electronic publications of the Australasian Convenience and Petroleum Marketers Association, the representative industry organisation of those involved, inter alia, in petroleum retailing.
2. Mr Young indicated that the Company did not oppose an order requiring publication of the notice and did not seek any amendment to the terms of the notice proposed by the Prosecutor.
3. I am satisfied that it is appropriate to order the Company to effect such a publication.

Costs issues

1. As earlier noted, ss 257B and 257G of the Criminal Procedure Act potentially operate to permit me to make a costs order for these proceedings.
2. Whilst Environment Protection Authority v Barnes (2006) NSWCCA 246 is often advanced as providing a basis for taking the liability of a defendant to pay a prosecutor's costs into account when setting a penalty, a reading of that decision makes it clear that, there, the question arose in the context of consideration of that defendant's capacity to pay. However, I do not have any evidence whatsoever concerning the Company's financial position. There is, therefore, no relevant "downward pressure" to be applied to the appropriate penalties as a result of the Company being required to pay the Prosecutor's costs of these proceedings.
3. It is appropriate to order, pursuant to ss 257B and 257G(b) of the Criminal Procedure Act, that the Company pay the Prosecutor's costs as agreed or assessed.

Orders

1. The orders of the Court are 1. Zoya Investments Pty Ltd (the Defendant) is convicted of a breach of s 14(6)(a) of the Contaminated Land Management Act 1995 (the CLM Act) that it did fail, by 18 September 2020, to comply with a Management Order given by the Prosecutor with respect to pollution at the Defendant's service station at 68 Craigie Ave, Kanwal; 2. The Defendant is fined $180,000; 3. In addition to the fine in (2), Defendant is also fined a further $140,000 (being the appropriately adjusted daily penalty for the period between 19 September 2020 and 6 September 2021); 4. Pursuant to s 122 of the Fines Act 1996, the Defendant is ordered to pay to the Prosecutor a moiety (being 50%) of the total penalties imposed pursuant to orders (2) and (3); 5. Pursuant to s 95B(1)(a) of the Contaminated Land Management Act 1997, Zoya Investments Pty Ltd, at its expense, is to: 1. within 14 days of the date of this order, cause a notice to be published in the "Featured Articles" section of the online publication of the Australasian Convenience and Petroleum Marketers Association, titled ACAPMAg, with the text of such notice to be as set out in Annexure A to these orders; 2. within 14 days of the date of this order, cause a notice to be published in the online weekly newsletter to subscribers of the Australasian Convenience and Petroleum Marketers Association's online publication, titled ACAPMAg, with the text of such notice to be as set out in Annexure A to these orders; and 3. within 28 days of the date of this order, provide to the Environment Protection Authority, a copy of the entire webpage of the online publication and online weekly newsletter in which the notice was published in accordance with paragraph 5a and 5b above; and 1. Pursuant to ss 257B and 257G(b) of the Criminal Procedure Act 1986, the Defendant is ordered to pay the Prosecutor's costs of the proceedings as agreed or assessed.

Annexure A Annexure A (60947, pdf) Annexure A (60947, 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: 16 December 2022