Fairfield City Council v Quality Handling Systems Pty Ltd

Local Court of NSW|2013-02-08

Judgment 1 The defendant Quality Handling Systems Pty Ltd pleaded guilty to one charge of permit and/or cause pollution of waters pursuant to section 120 of the Protection of the Environment Operations Act 1997. The date of the offence was 26 April 2012. The prosecution was brought by Fairfield City Council. 2An offence under section 120 carries a maximum monetary penalty of $1,000,000 pursuant to section 123 of the Protection of the Environment Operations Act. The maximum monetary penalty that can be imposed in the Local Court is $110,000 pursuant to section 215. The principles stated by the Court of Criminal Appeal in R v Doan (2000) 50 NSWLR 115 apply in that the jurisdictional maximum is not a maximum penalty for any offence triable within that jurisdiction. 3Section 215 was most recently amended by the Protection of the Environment Legislation Amendment Act 2011, which was assented to on 16 November 2011. The relevant schedule (Sch 2 [14]) commenced on 6 February 2012. Prior to this amendment the maximum fine under section 215 was 200 penalty units ($22,000). 4The defendant pleaded guilty on 19 December 2012, which was the second time the matter was before the Local Court. I am satisfied that the plea was entered into at the earliest opportunity and there was utilitarian benefit in the plea. I allow a 25% discount for the entry of the plea of guilty: R v Thompson: R v Houlton (2000) 49 NSWLR 383.

Defendant's Explanation for the Offence and Subjective Circumstances 17Quality Handling Systems Pty Ltd specialises in the design and manufacture of Mechanical Sampling Systems. These systems are supplied for collecting representative samples from streams of bulk materials and slurries. Materials sampled include coal, mineral ores, processed minerals, aggregates, concentrates, fertiliser, mineral sands, process by-products, limestone, cement, grains and woodchips. The company has been operating for 20 years and at the time of the incident had 55 employees and operated at 4 sites. It has a gross turnover of $11.6 million, and a net turnover of $6.7 million. It has never been previously prosecuted for an offence of this type. 18Mr Salama, on behalf of the company, submitted that they offered no excuse. They co-operated with the investigation of the incident. He further asked the court to take into account the positive steps the company has taken to rectify the situation. The company has had the wash bay repaired, and applied to Sydney Water for a licence/permission to have a waste storage facility present which captures the water. They have spent:

$25,000 rectifying the wash bay
$10,000 on reports
$10,000 for retaining a business analyst
$4,000 (so far) paid to Sydney Water in relation to a waste/storage facility. 19Whilst the Court acknowledges the amount spent in rectifying the wash bay and on the other matters, it also notes that this work was only carried out after the Council discovered the offending behaviour, and the repair of the wash bay should have been carried out much earlier.

Matters of General Principle 20Section 241 of the Protection of the Environment Operations Act 1997, contains a number of matters to be considered on the question of imposing penalty. These matters include: the extent of the harm caused or likely to be caused to the environment; practical measures that may be taken to prevent, control, abate or mitigate that harm; the extent to which the person committing the offence could reasonably foresee harm caused or likely to be caused by the offence; the control that person has over the causes; whether the person was complying with orders from their employer; and any other matter considered relevant. 21The Prosecutor tendered 4 cases which it submitted were of relevance in determining the appropriate sentence in this case. The first case in date order is Wollondilly Shire Council v Brogan Box Pty Ltd, an unreported judgment of the Land and Environment Court of New South Wales dated 28 March 2002. Bignold J imposed a fine of $12,500 for paint from the Defendant's premises getting into the stormwater grate. At paragraph [15] Bignold J quotes Sheahan J in Environment Protection Authority v Transfield Pty Ltd [2001] NSWLEC 45 stating, "While this is indeed a relatively minor breach of the law it should attract a monetary penalty as industry must be vigilant to meet the community's expectations and aspirations for the environment." Bignold J went on to evaluate the objective gravity of the offence and the subjective culpability as at the very low end of the spectrum of overall gravity. 22In Environment Protection Authority v Straits (Hillgrove) Gold Pty Ltd [2010] NSWLEC 114, a fine of $50,000 was imposed for a gold antimony miner carelessly allowing slime containing high levels of antimony, arsenic and lead amongst other minerals to escape to a distance of 300 metres. The defendant cleaned up the slime and the offence was considered to be of low to medium gravity. In Environment Protection Authority v Moolarben Coal Operations Pty Ltd [2012] NSWLEC 65, discharge of sediment laden water into Bora Creek, was assessed as medium to mid range objective gravity and the Court imposed a fine of $105,000. In Environment Protection Authority v Moolarben Coal Operation Pty Ltd (No 2) [2012] NSWLEC 80, for discharge of sediment laden waters, a fine of $112,500 was imposed.

Remarks and Conclusion 23In the Court's view, general deterrence is extremely important in a case of this type. The Court was advised by the solicitor for the Council, that there are 3000 businesses in the area, and the Council regularly receives complaints of substances/smells/odours in Prospect Creek. These complaints are difficult to trace back to source. Therefore, when a large company is found to have committed what the Court considers a very serious breach of the Protection of the Environment Operations Act, the community would expect heavy penalties to be considered. The Court also notes that the maximum penalty which could be imposed in the Local Court for an offence such as this, was recently increased by a factor of 5. 24The Court is unable to precisely determine the extent of harm to the environment, but notes that there were admissions by persons from the company that the washing of the pickling paste into the stormwater drain had been occurring for either 18 months or 2 years. So there was considerable potential for harm to the environment. 25The Court finds that the defendant had taken no practical measures to prevent, control, abate or mitigate the potential harm to the environment from the washing of the pickling paste into the stormwater system. Although it accepts that after discovery of the offence by Fairfield City Council, Quality Handling Systems took action to prevent any further harm occurring. The Court gives credit to the defendant for the money spent to rectify the wash bay and obtain reports. 26The Court further finds that the defendant could have reasonably foreseen that harm was likely to be caused by the discharge of pickling paste into the stormwater drain. There was ample information available to the defendant as to the toxic and corrosive properties of the pickling paste and the clear directions not to discharge the pickling paste into drains. Notwithstanding this clear advice, the company simply washed the pickling paste into the stormwater drain for a period of either 18 months or 2 years. It was a flagrant breach of the environmental laws. 27After taking into account all the material submitted by Fairfield City Council, the submissions of the prosecution and the defendant, the early plea of guilty and all the other matters referred to earlier, the Court comes to the conclusion that a fine of $75,000 is the appropriate penalty in this case. 28The Court notes that there has already been agreement between the parties for the defendant to pay the costs of the prosecution in the sum of $5,000 payable within 7 days. The defendant is to pay court costs of $83.00. Magistrate van Zuylen Parramatta Local Court

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