Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Budvalt Pty Ltd; Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Harris

Solicitors: Crown Solicitors Office (Prosecutor) Horton Rhodes (Defendants) File Number(s): 231599, 231598, 231608 and 231621 of 2018 Publication restriction: No

TABLE OF CONTENTS Introduction The Amended Summons The Agreed Statement of Facts The Company's guilty plea The hearings The evidence Representation at the sentencing hearing The relevant statutory provisions Introduction The Water Management Act 2000 The Crimes (Sentencing Procedure) Act 1999 The Fines Act 1996 The maximum penalty for the offence Sentencing Procedure Act factors Introduction A factor of aggravation (s 21A(2)(o))? The Company's subjective factors Introduction Harm Prior offences The Company is a good corporate citizen Likelihood of reoffending The Company's prospects of rehabilitation Contrition and remorse The Company's guilty plea The extent of assistance given to the Prosecutor Characterisation of the Company's offending conduct Introduction Mr Jack Harris's misunderstanding of the legal position Introduction The Company's submissions concerning Mr Harris's knowledge The Prosecutor's written submissions The Prosecutor's oral submissions The Company's oral submissions Consideration General submissions concerning characterisation of the offending conduct Introduction The Prosecutor's submissions Mr Elliott's submissions Consideration The matters arising from s 364A of the Water Management Act Deterrence Introduction Specific deterrence General deterrence The appropriate starting sentence Introduction Prosecution was available in the Local Court The submissions for the Company Consideration Comparability in sentencing Introduction The Company's submissions The Prosecutor's submissions Consideration Conclusion on the appropriate starting sentence The Company's guilty plea Introduction The Prosecutor's position The defence position Consideration The proposed publication order Introduction The terms of the notice proposed by the Prosecutor The making of such a publication order The Prosecutor seeks a moiety of the penalty to be imposed Orders

Introduction

1. On 27 July 2018, Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator (the Prosecutor) commenced four criminal prosecutions alleging breaches of the Water Management Act 2000 (the Water Management Act) on a property known as Miralwyn Cotton (the site). The site is located to the south‑west of Walgett near the hamlet of Carinda.
2. Three of the charges were laid against Budvalt Pty Ltd (the Company), whilst the other was laid against Mr Jack Harris, the manager of the Company.
3. Two of the charges against the Company and the charge against Mr Jack Harris were set down for an eight-day contested hearing commencing on 27 July 2020 as a consequence of "not guilty" pleas having been entered to these charges. The remaining charge against the Company had also been set down for a separate contested hearing commencing on 24 August 2020 because of the Company having pleaded "not guilty" to this charge.
4. Shortly prior to the scheduled commencement day of the first trial, I was advised that the nature of the hearings was to change. As a consequence, on the scheduled first day of the three-charge hearing, all four of the charges were listed for mention. On that occasion, Mr Muston SC, for the Prosecutor, advised that the Prosecutor now wished to rely on a single Amended Summons containing a rolled-up charge against the Company, a charge to which the Company would plead "guilty". Leave was sought by, and granted to, the Prosecutor to rely on this Amended Summons.
5. Ms Lewer, counsel for the Company, entered a "guilty" plea on the Company's behalf to the single charge in the Amended Summons.
6. The Prosecutor had earlier indicated that, as the Company had foreshadowed its intention to enter that plea to the single charge, the Prosecutor no longer wished to proceed with the remaining charges against the Company or the charge laid against Mr Jack Harris. Those charges were to be adjourned until my decision following from this sentencing hearing on the rolled-up charge when, as part of the finalisation of the sentencing process for the charge to which the Company had pleaded guilty, the prosecutions for the remaining charges were to be dismissed.
7. This changed position caused to me vacate the remainder of the hearing dates allocated to the three-charge hearing and to set down a sentencing hearing only on the now amended charge on one of the days for which the second hearing (against the Company only) had been listed.

The Amended Summons

1. The Amended Summons, for which leave had been given and which contained the single charge to which the Company has pleaded guilty, is in the following terms: ... between about 29 July 2015 and 20 August 2015 inclusive at the property known as Miralwyn at 1503 Miralwyn Road, Carinda within the County of Clyde, the Parish of Wyabray in the State of New South Wales (Miralwyn), the Defendant committed an offence contrary to section 91B(1) of the Water Management Act 2000 (the Act) in that it constructed and then used a water supply work and did not hold a water supply work approval for that work.
2. The charge was particularised as set out below: Particulars (i) Miralwyn The Defendant was the landholder and occupier of Miralwyn at all relevant times (ii) Water supply work The channel at Miralwyn on or near Lot 12 of DP 43554 and Lot 21 of DP 42179 in the County of Clyde, the Parish of Wyabray, identified on the map attached to this summons and marked as Attachment 1, constructed for the purpose of conveying water to the point at which it was to be used at Miralwyn (the channel) (iii) Construction and use of water supply work The channel was constructed at Miralwyn for the Defendant at its direction between 29 July and 10 August 2015 by contractors known to the Defendant as "Clyde Cotton" Thereafter on 20 August 2015, the channel was used by the Defendant to convey water taken from the Macquarie River into storage for use for irrigation (iv) Absence of approval The Defendant did not hold a water supply work approval authorising the construction or use of the channel.

The Agreed Statement of Facts

1. On 27 July 2020, the Prosecutor filed in Court an Agreed Statement of Facts (ASOF) with respect to the rolled-up charge to which the Company had now pleaded guilty. That document also had appended to it: 1. A marked-up air photo dated 26 July 2018 showing the location of the water supply work (the channel) founding the charge (Annexure A). The marked-up air photograph is reproduced as Annexure 1 to this judgment; 2. Three photographs providing a contextual understanding of the channel constructed by the Company and which provided the foundation of the charge in the Amended Summons (Annexures B and C). One of the photographs of the channel (generally illustrative of the nature of the structure) is reproduced as Annexure 2; and 3. An extract from the 20 August 2015 directed interview with the manager of Budvalt, Mr Jack Harris, mentioned in [13] of the ASOF (relevant extracts are later reproduced).
2. The recital of the facts which have been agreed is comparatively brief. The terms of the ASOF are therefore reproduced below in full: 1 Budvalt Pty Limited (Budvalt) is to be sentenced for the following Tier 2 offence under the:Water Management Act 2000 (WMA): Offence Description Maximum penalty S 91B(1) of the WMA Between about 29 July 2015 and 20 August 2015 (the charge period) it did construct and then use a water supply work without approval 10,000 penalty units or $1,100,000 Is 363B, WMA)

2 Budvalt is a registered Australian Company with its principal place of business at "Miralwyn Cotton", 1503 Miralwyn Road, Carinda NSW 2831, being an irrigation farm located approximately 90 kilometres from Walgett used predominantly for growing cotton (Miralwyn). Both the Barwon and Macquarie Rivers run through Miralwyn. 3 During the charge period, Budvalt was the registered proprietor and occupier of 30 parcels of adjoining land known together as "Miralwyn" (the land). The land included Lot 12 of DP/43554 and Lot 21 of DP/42179 (Lots 12 and 21). 4 The land was subject to a number of water use approvals which permitted water to be pumped from the Macquarie River and used for irrigation on the land. 5 Before the charge period a number of irrigation channels and water storages were constructed on the land. Construction and use of a two kilometre channel at Miralwyn 6 At Budvalt's direction, the channel was constructed by third party contractors in the period 29 July 2015 to 10 August 2015. 7 The channel is about 2 kilometres in length and thirty metres wide from outside bank to outside bank, with a water carrying width of approximately 10 metres. 8 On 20 August 2015 Budvalt was using the channel for the purpose of holding or conveying water for use in irrigation. On that date, water was being pumped into the channel from a briary (a natural holding area) located adjacent to it, the water being sourced from the Macquarie River which was in proximity of the channel. 9 The location of the channel on Lots 12 and 21 is depicted in the map annexed as Annexure A to this statement of facts. Three photographs of the channel taken by investigators who visited the property on 20 August 2015 are found at Annexure B and C. The two photographs at Annexure B were taken at the northern end of the channel and the photograph at Annexure C was taken at the southern end of the channel. 10 The channel joined existing water conveyance and storage infrastructure on the property. No water supply work approval for the channel 11 At the time of the offence, Part 3 of Chapter 3 of the WMA (which includes s 91B) applied to the Lower Macquarie River Water Source in relation to all approvals, other than drainage work approvals, flood work approvals and aquifer interference approvals. 12 The channel was not the subject of any water supply work approval during the period from 29 July 2015 to 20 August 2015. Neither Budvalt, nor its directors or managers held any water supply work approval for the construction or use of the channel during the charge period. As was required to construct and use the channel. Admissions made by or on behalf of Budvalt 13 On 20 August 2015, the investigators undertook a directed interview with the manager of Budvalt, Jack Harris. During the course of the directed interview at the property, Jack Harris was asked questions and provided the answers which are recorded at Annexure D. 14 Following the interview, Mr Harris agreed to accompany the investigators to pumps located on the Macquarie River. One river pump was observed to be running and pumping water into the briary. 15 On 22 January 2018 WaterNSW issued a statutory notice under s 338A to Budvalt. In response to that statutory notice Budvalt made admissions that the channel was constructed between 29 July and 10 August 2015 for the purpose of channelling water. Approval sought 16 On 9 September 2015, Jack Harris, in his capacity as manager of Budvalt, submitted an application to the then regulator (the NSW Office of Water) for retrospective approval of the channel. The approval status remains pending.

The Company's guilty plea

1. The charge to which the Company has pleaded guilty is a strict liability one. Mens rea (intention) plays no part and guilt is established by proof of the objective ingredients of the offence (Caralis v Smyth (1988) 65 LGRA 303 at 308). The Company's plea of guilty constitutes admission of all the essential elements of the offence (R v O'Neill (1979) 2 NSWLR 582 at 588).
2. I have earlier set out the terms of the ASOF and the nature of the images attached to it. On my consideration of those facts, viewed through the lens of the relevant provisions of the Water Management Act (as later set out), I am satisfied that the necessary facts have been established beyond reasonable doubt for me to accept that the Company's plea of guilty has been entered appropriately and that I should convict the Company of the offence with which it has been charged.

The hearings

1. The initial mention on 27 July 2020 and the subsequent sentencing hearing on 26 August 2020 were held, as a consequence of the COVID-19 pandemic, using Microsoft Teams software without the necessity for any physical attendance in the courtroom. This hearing was conducted in accordance with the Court's COVID-19 Pandemic Arrangements Policy. The sentencing hearing was conducted efficiently by the parties - taking less than half a day.
2. Both the Prosecutor and counsel for the Company provided helpful written submissions on sentence and, at appropriate points throughout this decision, I will refer to those submissions and/or quote from them.
3. No oral evidence was given.

The evidence

1. The ASOF was tendered and became Exhibit A. The Prosecutor also read an affidavit of Ms Amanda Fuller, the Manager Customer Assessments and Approvals for WaterNSW. The relevant element of Ms Fuller's affidavit was at 11, where she commented with respect to the application that had been made to regularise the status of the channel giving rise to this charge. She said: (g) A decision on the application is likely to be made in the 2020 calendar year and the application is likely to be granted.
2. The Company's evidence was contained in a small tender bundle (Exhibit 1) which comprised the following four documents: 1. A letter of 14 August 2020 addressed to me from Mr Peter Harris, one of two directors of the Company (his wife, Ms Jane Harris, being the other director). The terms of this letter are set out in full below; 2. A list (dated 14 August 2020 and signed by Mr Peter Harris) setting out - without any quantification as to value - the organisations which had received contributions in cash and/or kind from Miralwyn Cotton or from him and his wife. A copy of this list is also set out below; 3. A letter from Mr James Quinn, Marketing & Extension Lead for Cotton Seed Distributors Ltd. The terms of this letter are also later reproduced; and 4. A marked-up air photograph from the Office of Water dated 25 August 2015 entitled "Miralwyn (Budvalt Pty Ltd) Investigation Map".
3. The terms of the letter addressed to me from Mr Peter Harris were: 14th August 2020 Your Honour, Grant Barnes v Budvalt Pty Limited (Budvalt) Budvalt currently has two directors, myself and my wife, Jane Harris and trades as Miralwyn Cotton. Budvalt has been an irrigator since approximately 1990. I became a director and shareholder of Budvalt in 2003. At this time Budvalt owned just one property called Miralwyn. Over the past 17 years Budvalt has purchased a further 6 properties that adjoin or are in the vicinity of Miralwyn. I also own land in partnership with my wife adjoining or in the vicinity of these properties, all but one joins each other with a total land area of approximately 76,000 hectares. To my knowledge Budvalt has never been convicted or fined for any wrongdoing by any of the various water authorities. The channel the subject of the offence was constructed after we acquired a property called Wombullion which adjoins Miralwyn. Thereafter, the properties were managed together as a larger "Miralwyn". I understand that the channel was constructed primarily to transfer tail water (recycled and potentially contaminated water) from Wombullion to the nearest available water storage which was situated on the adjoining property of Miralwyn. Without this channel in certain circumstances it would have been difficult to contain the tail water, therefore this water could have run onto neighbouring land and potentially back into the river system creating an offence under the Water Management Act. At the time of the offence, the staff managing Miralwyn were Coert Pretorious and Jack Harris. Since 2017 we have now employed a senior staff member, Mark Adams, dedicated to ensuring compliance with the Water Management Act and regulations. This is designed to prevent contraventions of the regulatory regime going forward. I understand now that an approval should have been sought and on behalf of Budvalt regret that the approval was not obtained before the construction of the channel. Budvalt has made substantial contributions to the local area, including donating to many charities and community groups within the local area. My wife and I have also personally donated to many more charities and community groups over the years, please see attached list. Peter Harris Director Budvalt Pty Ltd
4. The list referred to in 19 is as follows: 14 August 2020 To Whom It May Concern: Miralwyn Cotton has contributed cash donations, goods and provided a venue to various community organisations and events over the years. • Annual Carinda race day • Walgett Rams Rugby Union Club • Donated cattle to the Carinda campdraft • Donated cattle to the Walgett campdraft • Host venue for the dryland cotton field day • Cotton Seed Distributors variety crop trials for the benefit of the cotton industry • Cotton Seed Distributors pure seed production for the benefit of the cotton industry Peter and Jane Harris have also personally donated to the below organisations. • Royal Flying Doctor Service • The Variety Club bash • Gwydir Industries Inc (provides training and real work experience for people with a disability) • Mallawa Public School • Magic On Mehi (poetry and music festival) • Moree Rugby Club • Brewarrina Rugby Club • Louth Picnic Races • Brewarrina Picnic Races • Enngonia Picnic Races • Bourke Racing Club • Brewarrina Fishing Club

Representation at the sentencing hearing

1. The Prosecutor was represented by Mr E Muston SC and Ms G Wright, barrister. The Company was represented by Mr M Elliott SC and Ms G Lewer, barrister.

Introduction

1. Elements of four statutes require consideration in these proceedings. They are the Water Management Act; the Crimes (Sentencing Procedure) Act 1999 (the Sentencing Procedure Act); the Criminal Procedure Act 1986 (the Criminal Procedure Act); and the Fines Act 1996 (the Fines Act).

The Water Management Act 2000

1. The relevant statutory provisions concerning the charge laid against the Company are contained in ss 3, 91B, 353G, 363B and 364A of the Water Management Act. These provisions, as at the date of the offence, are set out below. The objects of the Act were in the following terms: 3 Objects The objects of this Act are to provide for the sustainable and integrated management of the water sources of the State for the benefit of both present and future generations and, in particular: (a) to apply the principles of ecologically sustainable development, and (b) to protect, enhance and restore water sources, their associated ecosystems, ecological processes and biological diversity and their water quality, and (c) to recognise and foster the significant social and economic benefits to the State that result from the sustainable and efficient use of water, including: (i) benefits to the environment, and (ii) benefits to urban communities, agriculture, fisheries, industry and recreation, and (iii) benefits to culture and heritage, and (iv) benefits to the Aboriginal people in relation to their spiritual, social, customary and economic use of land and water, (d) to recognise the role of the community, as a partner with government, in resolving issues relating to the management of water sources, (e) to provide for the orderly, efficient and equitable sharing of water from water sources, (f) to integrate the management of water sources with the management of other aspects of the environment, including the land, its soil, its native vegetation and its native fauna, (g) to encourage the sharing of responsibility for the sustainable and efficient use of water between the Government and water users, (h) to encourage best practice in the management and use of water.
2. The provision establishing the offence with which the Company is now charged is set out below: 91B Constructing or using water supply work without, or otherwise than as authorised by, a water supply work approval (1) A person: (a) who constructs or uses a water supply work, and (b) who does not hold a water supply work approval for that work, is guilty of an offence. Tier 2 penalty. (2) … (3) … (4) … (5) …
3. The Water Management Act also provides for the potential making of further orders; orders which are in addition to, and not in substitution for, the penalty to be imposed pursuant to s 91B of the Act. This power is established by s 353G of the Act.
4. Here, the power in s 353G(1)(a) to require the publication of a notice detailing the Company's offending conduct and the punishment imposed on it for this conduct is relevant. 353G Additional orders (1) The court may do any one or more of the following - (a) it may 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 offender, (b) …, (c) …. (2) …. (3) The court may, in an order under this section, fix a period for compliance and impose any other requirements the court considers necessary or expedient for enforcement of the order. (4) If the offender fails to comply with an order under subsection (1) (a), the prosecutor or a person authorised by the prosecutor may take action to carry out the order. (5) The reasonable cost of taking action referred to in subsection (4) is recoverable by the prosecutor or person taking the action, in a court of competent jurisdiction, as a debt from the offender.
5. The present offence is a Tier 2 offence - with the relevant maximum penalty set by s 363(b)(i), a provision in the following terms: 363B Penalties For the purposes of this Act: (a) … (b) a Tier 2 penalty corresponds to a maximum penalty of: (i) in the case of a corporation, 10,000 penalty units and, in the case of a continuing offence, a further penalty of 1,200 penalty units for each day the offence continues, or (ii) …, and (c) …
6. Finally, the Water Management Act sets out, in s 364A(1), matters which, for sentencing purposes, the Court must consider (if relevant) when imposing a penalty. The provision is in the following terms: 364A Matters to be considered in imposing penalty (1) In imposing a penalty on a person for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the impact of the offence on other persons' rights under this Act, (b) the market value of any water that has been lost, misused or unlawfully taken as a consequence of the commission of the offence, (c) the extent of the harm caused or likely to be caused to the environment (including, in particular, any water source or waterfront land) by the commission of the offence, (d) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (e) the extent to which the person could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (f) the extent to which the person had control over the causes that gave rise to the offence, (g) whether the offence was committed during a severe water shortage (that is, in contravention of an order in force under section 49A or 324), (h) the person's intentions in committing the offence, (i) whether, in committing the offence, the person was complying with orders from an employer or supervising employee, (j) in the case of an offence of taking water in contravention of this Act, whether the water so taken had been released for environmental purposes and, if so, whether the person was aware of that fact, (k) any civil penalty that has been imposed on the person under section 60G in relation to the conduct from which the offence arises. (2) The court may take into consideration other matters that it considers relevant.

The Crimes (Sentencing Procedure) Act 1999

1. A number of provisions of the Sentencing Procedure Act require consideration. The first of these is s 3A, the provision that sets out the objects of the Act explaining the purposes for which sentencing is 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 second elements of the Sentencing Procedure Act are those contained in s 21A of that Act which are relevant to this offending conduct or to the Company. The provision contains, in s 21A(2), those elements which can, if proved beyond reasonable doubt, give rise to a finding that the offending conduct was carried out in circumstances of aggravation. It also contains, in s 21A(3), a range of subjective factors potentially applicable to the Company that require to be considered where relevant.
3. The relevant elements of s 21A of the Sentencing Procedure Act, potentially or actually engaged for my sentencing assessment of this Company, will each require separate consideration. The relevant portions of the provision are set out below: 21A Aggravating, mitigating and other factors in sentencing (1) ... (2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows: ... (o) the offence was committed for financial gain, (p) ... (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) ..., (c) ..., (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) the offender has good prospects of rehabilitation, whether by reason of the offender's age or otherwise, (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 next element of the Sentencing Procedure Act engaged by these proceedings is s 22, a provision which mandates that I have positive regard to the entry by the Company of its guilty plea and the utilitarian value that the entry of that plea has had for the administration of justice. 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) A lesser penalty imposed under this section must not be unreasonably disproportionate to the nature and circumstances of the offence. (2) ... (3) ... (4) ... (5) ...
5. The final element of the Sentencing Procedure Act engaged by these proceedings is s 23 - a provision which permits me to reduce the penalty to be imposed on the Company after having regard to the matters set out in s 23(2). The provision is set out below: 23 Power to reduce penalties for assistance provided to law enforcement authorities (1) A court may impose a lesser penalty than it would otherwise impose on an offender, having regard to the degree to which the offender has assisted, or undertaken to assist, law enforcement authorities in the prevention, detection or investigation of, or in proceedings relating to, the offence concerned or any other offence. (2) In deciding whether to impose a lesser penalty for an offence and the nature and extent of the penalty it imposes, the court must consider the following matters - (a) (Repealed) (b) the significance and usefulness of the offender's assistance to the authority or authorities concerned, taking into consideration any evaluation by the authority or authorities of the assistance rendered or undertaken to be rendered, (c) the truthfulness, completeness and reliability of any information or evidence provided by the offender, (d) the nature and extent of the offender's assistance or promised assistance, (e) the timeliness of the assistance or undertaking to assist, (f) …, (g) …, (h) …, (i) whether the assistance or promised assistance concerns the offence for which the offender is being sentenced or an unrelated offence, (j) (Repealed) (3) A lesser penalty that is imposed under this section in relation to an offence must not be unreasonably disproportionate to the nature and circumstances of the offence. (4) … (5) … (6) …

The Criminal Procedure Act 1986

1. The costs-ordering provisions contained in ss 257B and 257G of the Criminal Procedure Act are engaged in order to permit me to order that the Company is to pay the Prosecutor's costs of these proceedings. It is not necessary to reproduce the terms of any provisions of this legislation; it is sufficient to note that they provide a proper statutory foundation for me making an appropriate costs order.

The Fines Act 1996

1. As later discussed, the Prosecutor seeks an order that a moiety (50%) of the fine to be imposed on the Company be paid to the Prosecutor. The relevant provision of the Fines Act providing the statutory basis for such an order is s 122, a provision in the following terms: 122 Payment of share of fine to prosecutor (1) This section applies where - (a) the Act imposing or authorising the imposition of a fine or other penalty does not make any provisions for its application when recovered, and (b) the prosecutor is not a police officer. (2) The court before which proceedings are taken to recover any such fine or other penalty may direct that such portion of it (not exceeding one-half) is to be paid to the prosecutor. (3) …

The maximum penalty for the offence

1. The maximum penalty for this offence is $1,100,000 - 10,000 penalty units (a penalty unit being $110) - as provided by s 363B of the Water Management Act (earlier set out as then applying).
2. 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.
3. 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).

Introduction

1. Before turning to the various matters arising pursuant to s 21A(2) and (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 the purposes of establishing any potential factor of aggravation, I must conclude that such factor is proved beyond reasonable doubt. On the other hand, for favourable subjective factors applicable to the Company (including those matters potentially arising from s 21A(3)), 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 (R v Olbrich) at 281).

A factor of aggravation (s 21A(2)(o))

1. The Prosecutor expressly submitted that I should conclude, to the necessary standard, that the Company's offending conduct was carried out for financial gain. If proved beyond reasonable doubt, this is a factor of aggravation.
2. The Prosecutor's written submissions addressed this point in the following terms (footnotes omitted): 38 …, there could be no reasonable doubt that Budvalt: - deliberately used the channel the subject of the offence knowing that approval had not been sought or granted; - was aware of the quantity of water being conveyed across the land from the Macquarie River and in to the channel. Mr Harris' statement to investigators that the channel was used to catch "rain runoff" does not detract in any way from this proposition; - did not commit the offence on the 'spur of the moment' and or in an unplanned manner; - committed the offence for financial reasons, rather than need. The conduct was part of a business involving irrigation of cotton. 39 The carrying out of an offence to make a profit, or to save incurring an expense, or to avoid the cost of obtaining and implementing a statutory permission, increases the seriousness of the offence. Committing an offence for financial gain is an aggravating factor under s 21A(2)(o) of the Crimes (Sentencing Procedure) Act 1999. 40 It is submitted that the offences were committed by the defendant for perceived financial gain. The construction of the channel enabled the defendant to detain and transport more water than would otherwise have been possible on the property. The additional water stored and channelled as a consequence of the offence would inevitably have allowed the offender to increase its earnings from crops grown on Miralwyn. The offender necessarily profited from the offences. The commission of the offences for financial gain increases the objective seriousness of the offences. 41 In WaterNSW v Barlow [2019] NSWLEC 30 at [82] the fact that water offences were committed as part of operating an agricultural business, and that the offender was storing the water taken for future commercial cropping use, did not establish that the relevant offender committed the offence for financial gain. However, that finding was made in circumstances where the offender called evidence establishing that the water taken was within his water allocation for which he paid a fee. It is not suggested in the present case that the defendant was not entitled to take the water it had pumped from the Macquarie River into the briary. However, the important difference in the present case is the extent to which the construction and use of the channel permitted the defendant to store and transport more water than would otherwise have been possible had the channel not been constructed.
3. I have earlier set out the terms of the letter sent to me by Mr Peter Harris, one of the directors of the Company. For present purposes, it is appropriate to repeat only one of the paragraphs of that letter. That paragraph was in the following terms: The channel the subject of the offence was constructed after we acquired a property called Wombullion which adjoins Miralwyn. Thereafter, the properties were managed together as a larger "Miralwyn". I understand that the channel was constructed primarily to transfer tail water (recycled and potentially contaminated water) from Wombullion to the nearest available water storage which was situated on the adjoining property of Miralwyn. Without this channel in certain circumstances it would have been difficult to contain the tail water, therefore this water could have run onto neighbouring land and potentially back into the river system creating an offence under the Water Management Act.
4. In this context, it is also appropriate to have regard to the answer given by Mr Jack Harris to Question (303) in his directed interview, the transcript of which formed part of the attachments to the ASOF. Mr Jack Harris's answer to that question was in the following terms: A: It's a, you know, its a new block of country and um, under the understanding that the previous works of their tail water storage which was half-built is, were rejected and they weren't able to finish it so at this point of time there is no place for tail water to go. Um, so you're talking you know all your rain runoff and everything is just going to keep building up, keeps building up, and you can't, you can't send it anywhere if you get a decent rainfall you're talking like 3 or 4 inches of rain, ah, and all of a sudden you've got a flood over there so that's the main reason we put this channel in. At least we can get the water from there off the fields and back into the system, into the water system. Yeah. That's where it comes in at the top of Geera and, and, it's virtually at the top of this farm here.
5. In this context, the Prosecutor's oral submissions concerning the benefit to be enjoyed by the Company as a consequence of the construction of the channel should be set out (Transcript 26 August 2020, page 6, line 37 to page 7, line 29): MUSTON … (not transcribable).. up until quite recently concerns the reasons for committing the offence, the prosecutor submits that there is some financial motive, which your Honour will see from our written submissions of the capacity for aggravating the offence. We say that's powerfully supported by the inference just alluded to which flows the evidence - from the answers given by Mr Harris in his record of interview, which if your Honour goes back to, annexure D in exhibit A and the answers given to questions 316 and 317 on p 37, we are say now enable your Honour to draw an almost irresistible inference that it was being used in that way because it was perceived by Mr Harris and the offender that they would derive some benefit. HIS HONOUR: All right. MUSTON: The defendant suggests a different motive and your Honour will see some indication of that possible motive in answer to question 303 on p 35. HIS HONOUR: Yes. MUSTON: But we say para 303 doesn't rise to quite the level of what's set out in the final paragraphs of the letter which appears at - it's the second page of the defendant's bundle. Does your Honour have the 14 August 2020 letter in the defendant's tender bundle which is a big one? HIS HONOUR: I do. MUSTON: Your Honour sees in the last paragraph there which runs over to the next page, is an explanation given as to at least Mr P Harris' understanding of why the channel was being built. HIS HONOUR: Yes I am there. MUSTON: We say that doesn't quite attest to the question of why it was being used on the date to which the charge applies, which we say is completely answered by the answers given by Mr J Harris, to which I have just drawn your Honour's attention. But we otherwise say in relation to the explanation provided in the first page of that letter, it is only expressed to be Mr Harris' understanding, it's not able to be tested in any meaningful way, and in those circumstances should be afforded limited weight. And whilst it is not inconsistent with the answer given at 303 in the record of interview, the answer that's given at 303 in the record of interview doesn't go quite as far as what is set out in the letter and in particular there's a portion of it, namely, the suggestion that the channel may have been constructed for the purpose of damaging the environment rather than benefitting the commercial operations.
6. The above oral submissions refer to Questions (316) and (317) (and their answers) from the directed interview with Mr Jack Harris. These were in the following terms - for completeness, I also include Question (318) and its answer: Q316 (ZB) And, how come it's filled with water at the moment? A. Ah, we're still pumping out of there and um…full storage. We are running the water back here. You know, you're talking big rain on the, on Monday, Sunday, Monday here, gives us a bit more room over there, to handle the water. Q317 (ZB) All Right, so the storage over there is full is that what you're saying so that's why you put it in the channel? A Yep. Q318 (ZB) Okay. How long is it going to stay in that channel for, are you just going to leave it in there or? A Whilever it's flowing.
7. As the Prosecutor observed, although the letter from Mr Peter Harris is in evidence without objection, it was not in a form able to be tested in any fashion as Mr Peter Harris did not give evidence. No adverse conclusion is to be drawn from this - merely it is appropriate to note that the contents of the letter are not tested, thus requiring an assessment of the weight to be accorded to its contents. As a consequence, I accept that the letter, overall (and, in the present context, the paragraph repeated above), is to be given limited weight in the Company's favour in my assessment of whether or not the Prosecutor has established that the offence was committed for financial gain.
8. Mr Elliott's oral submissions on this point were (Transcript 26 August 2020, page 13, line 45 to page 14, line 12): Topic 2 might loosely be described as why did we build the channel. The contention advanced by the prosecutor is that your Honour should infer that an intention to build and use the channel for the purpose of securing a financial outcome; that is, making more money, we contend that that is a submission not supported by any evidence. It is one thing to say, which we would accept, that the channel was constructed because we thought it was desirable in the operation of the farm. It is quite another thing to suggest, as the prosecution seeks to do without any evidentiary foundation, that the purpose of the construction of the channel was to make more money than we otherwise would, i.e. for profit, as the prosecutor contends. If the prosecutor wished to contend that, it needed to prove it, and it has not done so. It is perfectly capable of being envisaged that we would regard the channel, for example, as a more convenient course or a more efficient course of conducting business on the side, but it doesn't necessarily translate into making more money.
9. Despite the Prosecutor's submissions, I am unable to conclude that I can be satisfied, beyond reasonable doubt, that financial gain was the (or a) reason for the commission of the offence. It is sufficient, in these circumstances, that I cannot be satisfied that the storage of water in the channel (water acknowledged by the Prosecutor as having been obtained lawfully within the overall entitlement of the Company) would have inevitably allowed "the offender to increase its earnings from crops grown on" the site.
10. In circumstances where there is no evidence that the construction of the channel would have resulted in additional water being made available for the Company's commercial activities beyond its lawful entitlement or that the Company would not otherwise have been able to use water to the same extent without the construction of the channel, I cannot conclude that alterations to the method and timing of distribution and storage of water must result in financial gain to the Company or was expected to so result.
11. As a consequence, I cannot be satisfied, to the necessary high standard, that the construction of the channel was motivated by financial gain to the Company.
12. It therefore follows that this factor of aggravation has not been established by the Prosecutor.

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. For any mitigating factor to be engaged, the Company must establish a proper basis for it on the balance of probabilities (R v Olbrich).

Harm

1. The first relevant factor (s 21A(3)(a)) is whether the damage caused by the offence was not substantial.
2. Although the channel is a very substantial structure (as can be seen from Annexure 2 to this decision), there is no evidence that its construction or use has caused, or will cause, any harm to the environment. Indeed, as earlier noted, regulatory approval for the channel is likely by the end of 2020.
3. The only harm caused by the commission of the offence has been to the objectives and integrity of the regulatory system established by the Water Management Act.

Prior offences

1. The second relevant factor (s 21A(3)(e)) is whether the Company has "any record (or any significant record) of previous convictions".
2. The extent to which the Company may have been convicted in the past, for water, environmental or other offences, is a matter of relevance in my sentencing consideration. The Prosecutor acknowledges that the Company has no prior convictions.
3. It is therefore appropriate that I have regard to this absence of prior convictions as a matter in favour of the Company in undertaking my instinctive synthesis of all relevant factors in this sentencing process.

The Company is a good corporate citizen

1. The third relevant factor (s 21A(3)(f)) is whether the Company is "of good character". Several matters require consideration as to the extent that I might conclude that this factor of potential mitigation might be made out.
2. First, at 19, I noted that Mr Peter Harris had provided a list setting out - without any quantification as to value - the organisations which had received contributions in cash and/or kind from Miralwyn Cotton or from him and his wife.
3. Second, at 19, I also noted that the Company had tendered a letter from Mr James Quinn, Marketing & Extension Lead for Cotton Seed Distributors Ltd. The terms of this letter are set out below: 17 August 2020 To Whom It May Concern, Budvalt Pty Ltd trading as Myralwyn Cotton has had a long term relationship with Cotton Seed Distributors Ltd, as a trial site for our seed production, variety and agronomic research programs. These are industry specific programs which produce volumes of potential varieties of cotton planting seed and assess the suitability of these varieties under commercial growing conditions. The data collected from trial co-operators also contributes to the prioritisation of future research, and the development of tools to help growers with decision making and understanding their crop. As long term trial co-operators, the Harris family, and their employees and contractors have also contributed to these programs on a number of additional properties since 2005. Regards, James Quinn Marketing & Extension Lead Cotton Seed Distributors Ltd
4. The submissions on behalf of the Company proposed, in this regard, that: 22 There is evidence before the Court in Mr Peter Harris's letter regarding the contributions the defendant has made to the community in the area, further demonstrating the good character of the defendant. There is also a letter from Cotton Seed Distributors about their ongoing contribution that is relevant in this regard.
5. During the course of the hearing, I had the following exchange with Mr Elliott concerning the letter from Mr Quinn (Transcript 26 August 2020, page 16, line 50 to page 17, line 14): HIS HONOUR: Could I take you, please, to the second sentence of para 22 and the letter that is attached to exhibit 1 from Mr Quinn. Now, to the extent that that is relied on as a character reference for your client why should I have regard to it given that there does not appear to have been any disclosure to Mr Quinn of the facts of the charge and that your client intended to plead guilty to it and that otherwise the inference would appear to be from the letter that it is a reference given in vacuo relevantly? ELLIOTT: Your Honour, we don't put it forward as a character reference, we put it forward as evidence of the facts asserted in the letter but which your Honour would then take into account in forming a view as to the character of the defendant. In other words, it's evidence of what has occurred in the community insofar as it concerns the defendant and its activities which your Honour could then as matters of fact take into account in forming a view as to the character of the defendant.
6. Although Mr Peter Harris refers to the community activities of himself and his wife, it is to be noted that the community activities of Mr Peter Harris and his wife are personal and not corporate ones. Those activities are not relevant in my sentencing consideration of the Company's corporate "good character". The only matters that are relevant for this purpose are the activities of the Company itself (as set out earlier at [21]). I take those matters into account in the Company's favour.
7. Second, the letter from Mr Quinn provides testimony of the activities undertaken by the Company, which make some contribution to the broader cotton‑growing industry in which it is engaged, but, also, provides to some extent the inference that there is some element of corporate self-interest in seeking the outcomes discussed by Mr Quinn (as these would be of commercial benefit to the Company). In addition, the final paragraph of Mr Quinn's letter does not relate to activities of the Company itself and, therefore, is to be ignored in its entirety.
8. Taken overall, I am satisfied it is appropriate that I conclude that the Company is of "good character", but that the factors establishing this are of only modest weight in my consideration of the Company's subjective factors.

Likelihood of reoffending

1. The fourth relevant factor (s 21A(3)(g)) is whether the Company "is unlikely to re-offend". This is relevant, for the future, to prevention and, thus, avoidance of the potential for future incidents of this type.
2. The letter written by Mr Peter Harris included the following: At the time of the offence, the staff managing Miralwyn were Coert Pretorious and Jack Harris. Since 2017 we have now employed a senior staff member, Mark Adams, dedicated to ensuring compliance with the Water Management Act and regulations. This is designed to prevent contraventions of the regulatory regime going forward.
3. Mr Elliott's written submissions on this point said: Prospects of rehabilitation and measures to prevent reoffending 24 In addition to the absence of prior record, there is also evidence of measures implemented by the defendant to prevent offending in the future. The defendant has engaged a staff member, Mr Adams, since 2017 to work to ensure compliance with the regulatory regime. 25 This is an additional factor to demonstrate that the offender is unlikely to reoffend and has good prospects of rehabilitation: ss. 21A(3)(g) and (h) of the Sentencing Act. 26 This is also relevant in assessing the extent to which the sentence is required to give weight to specific deterrence.
4. The Prosecutor's reply submissions on this point were in the following terms: 14 The offence having been in committed in July/August 2015, the defendant hired Mr Adams in 2017 to ensure compliance with the statutory scheme, although it is not clear from the letter whether his functions relate to Miralwyn only or embrace seven properties covering 76,000 hectares to which Mr Harris refers. The prosecutor has no ability to test that information.
5. I am satisfied that it is appropriate to give some positive regard to the employment of Mr Adams. However, in circumstances where this information is provided solely on the basis of the letter from Mr Peter Harris, and where there has been no opportunity for the Prosecutor to test the geographic extent of Mr Adams' activities and the nature of his functions, the positive conclusion to be drawn in favour of the Company for this factor is limited.

The Company's prospects of rehabilitation

1. The fifth relevant factor (s 21A(3)(h)) is whether the Company "has good prospects of rehabilitation".
2. As can be seen from consideration of the fourth factor discussed immediately above, the Company's submissions dealt with these factors in tandem.
3. The comments above at [72] are equally applicable in my consideration of this factor.

Contrition and remorse

1. The sixth relevant factor (s 21A(3)(i)) is whether the Company "has shown remorse for the offence". This engages consideration of two elements contained in the provision that are both required to be satisfied. These, relevantly adapted, are: 1. Whether the Company has provided evidence that it has accepted responsibility for its actions, and 2. Whether the Company has acknowledged any loss caused by its actions and has made reparation for such loss.
2. Pepper J set out, in Chief Executive, Office of Environment and Heritage v Ausgrid (2013) 199 LGERA 1; [2013] NSWLEC 51 at [80] - an approach endorsed in Environment Protection Authority v Terrace Earthmoving Pty Ltd [2016] NSWLEC 158 by Robson J, the four types of action 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.
3. Of those matters set out above, the first to third are not presently relevant. As to the fourth, although electronic attendees were not able to be observed as we were not in a physical courtroom as a consequence of COVID-19, I had no evidence of either director of the Company attending electronically and there was no submission from Mr Elliott that this was the case. Certainly, no sworn evidence of contrition and remorse was provided on behalf of the Company.
4. Mr Peter Harris's letter (see [19]) said, inter alia: I understand now that an approval should have been sought and on behalf of Budvalt regret that the approval was not obtained before the construction of the channel.
5. Mr Elliott addressed on this point twice during his oral submissions. First, he said (Transcript 26 August 2020, page 11, lines 32 to 40): In respect of undermining of the regulatory scheme as my client has indicated in the correspondence that has been tendered and which I now confirm in these submissions orally that my client feels remorse and regrets the contravention. I submit the conduct which had the effect of undermining the regulatory scheme, when coupled with a range of mitigating factors that are set out in our submission, ought lead to a result of a conviction which will be penalty in itself for my client who will, as your Honour would apprehend, feel a sense of embarrassment at that outcome. That sense of embarrassment would operate as a natural and strong deterrent factor.
6. Later - directly addressing the above extracted paragraph of Mr Harris's letter, he said (Transcript 26 August 2020, page 16, lines 45 to 48) Your Honour has the point of remorse in para 22. Your Honour will see and I think will have read the letter from my client which is in the tender bundle of exhibit 1 and your Honour will find in the penultimate paragraph of that letter of 14 August 2020 the remorse referred to.
7. The "para 22" referred to is that quoted from the Company's written submissions and earlier reproduced at [63].
8. In Chief Executive, Office of Environment and Heritage v Boyle [2019] NSWLEC 54, at [101] and [102], I observed: 101 Although it should be self-evident, one of the ways of demonstrating contrition and remorse for the offending conduct which brings a defendant before a court is to, in plain words, express sorrow or remorse for the offending conduct and the consequences that have flowed from it. Doing so is a method by which a defendant can demonstrate an insight into why the offending conduct has been criminalised by legislative enactment; why that conduct is not accepted as a societal norm; and what are the punitive consequences or potential consequences of such rejected offending conduct. 102 Contrition and remorse are not demonstrated by some sense of shame or impact on an offender and/or (as is here the case) on the offender's family. Feeling ashamed of one's offending conduct or regretting the shame and humiliation that that conduct brings on the perpetrator or those near and dear to the perpetrator demonstrates no insight whatsoever into why the offending conduct is set outside the barriers of societal acceptability.
9. In this instance, there is no representative of the Company coming before the Court to express sorrow or remorse for the breach of the legislation. Mr Peter Harris's letter and sentiments in it were unable to be tested and carry little weight as a consequence.
10. To submit, as Mr Elliott did, that matters of embarrassment to the Company or its directors are matters to be taken into account in understanding whether the Company or its directors were remorseful for, or genuinely regretful of, the breach of the regulatory regime caused by the construction and use of this substantial water supply work is entirely contrary to what would represent a proper acknowledgement of, and remorse for, the Company's unlawful construction and use of the channel.
11. I do not accept that the Company has demonstrated any genuine contrition and remorse whatsoever for its unlawful conduct.

The Company's guilty plea

1. The seventh relevant factor (s 21A(3)(k)) to be considered is the fact of the Company's guilty plea. This provision requires that I have regard to the fact that the Company has pleaded guilty to the single rolled-up charge for which it is now being 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. This factor in the Company's favour is later discussed in more detail.

The extent of assistance given to the Prosecutor

1. The final relevant factor (s 21A(3)(m)) is the extent to which the Company is to be regarded as having provided assistance to the Prosecutor.
2. The submission was made for the Company that Mr Jack Harris's participation in an interview with the Prosecutor should be regarded, in the circumstances of this offending conduct, as assistance to the Prosecutor for the purposes of s 21A(2)(m). I now turn to consider this proposition.
3. It was advanced, on behalf of the Company, as being reflective of providing assistance to the Prosecutor concerning the Company's offending conduct the fact that Mr Jack Harris had taken part in an interview with the Prosecutor. Portion of the transcript of that interview was, as earlier noted, appended to the ASOF. The element of the transcript of the interview in evidence comprised Questions (302) to (340), with these noted as being on pages 35 to 39 of the 46-page transcript of that interview.
4. When I raised with the Prosecutor the question of the extent of the length of the interview for the purposes of this aspect of my sentencing consideration, the Prosecutor demurred from me having regard to the fact that that which was in evidence was merely a short extract from the transcript of a much longer process.
5. To the extent that Mr Jack Harris may have been candid in his responses to the questions as shown in the transcript extract in evidence from the directed interview, there is nothing to be read in that extract which would lead to the conclusion that his frankness and candour was of such extraordinary assistance to warrant special consideration in the Company's favour.
6. However, to the extent that Mr Jack Harris did take part in the directed interview and thus provided some assistance to the Prosecutor, and that the Company did cooperate with the Prosecutor in the preparation of the ASOF, this cooperation is to be taken into account for these sentencing purposes, and I do so.

Characterisation of the Company's offending conduct

Introduction

1. In these proceedings, both the Prosecutor and Mr Elliott made submissions proposing how I should characterise the Company's offending conduct. These submissions were contained in each of the written submissions. The Prosecutor and Mr Elliott expanded on these during the course of their oral submissions.
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.
5. It is necessary to address, first, the submissions based on what was advanced on behalf of the Company concerning the state of Mr Jack Harris's knowledge (or, more correctly, what was asserted to be his lack of knowledge) of the approval requirements under the Water Management Act prior to turning to the more broad question of characterisation of the Company's offending conduct.

Mr Jack Harris's misunderstanding of the legal position

Introduction

1. As a specific preliminary matter in my consideration of how the Company's offending conduct is to be characterised, it is appropriate to consider the submissions that were made on behalf of the Company that the construction of the channel arose as a consequence of a genuine misunderstanding by Mr Jack Harris as to whether or not the construction was able to be undertaken as part of an earlier development approval given for the site or whether Mr Jack Harris was under a genuine misunderstanding as to the application of the regulatory regime established by the Water Management Act as it then would have applied to the construction of the channel.
2. In his record of interview, Mr Jack Harris said, at Questions (329) and (330): Q329 (ZB) Yep. A. Like I was unaware you needed permission, you know, to build a below ground channel. Q330. (ZB) Ok. A. It's not, as far as I was aware the only time you needed permission for building a, a channel is if it was above ground and was across a floodway, um, if it's going to interrupt, you know, floodwaters, which I've got good proof that it doesn't.

The Company's submissions concerning Mr Harris's knowledge

1. In the Company's written submissions, the following propositions were advanced concerning the state of Mr Jack Harris's knowledge and belief concerning construction of the channel: Mistake of law 16 In his interview, Jack Harris states that he did not believe that he was required to obtain an approval for the construction of the channel. He believed that the works were permissible work in accordance with pre-existing approvals the defendant held. Such approvals permitted the use of the water that was in the channel to be pumped from the river, then used and stored for the purposes of irrigation. This belief held by Mr Jack Harris was erroneous, but perhaps someone explicable given the regime as to when approvals are and are not required under the Act and the Water Management Regulation 2011 (then in force) are somewhat complicated. 17 Mr Harris's belief (acting on behalf of the defendant), was a mistake of law which is not exculpatory such that the defendants avoid liability, but is a mitigatory factor that can be taken into account in the defendant's favour on sentence: Ostrowski v Palmer [2004] HCA 30 at [2] per Gleeson CJ and Kirby J. The defendant's moral culpability for the offending is in stark contrast to other offenders who knowingly and contumeliously disregard the law or orders that have been made under the WMA. As much is conceded by the prosecutor: PWS at [37].

The Prosecutor's written submissions

1. As can be seen at the conclusion of the above extract from the Company's written submissions, a concession made by the Prosecutor, at [37] of the Prosecutor's written submissions, is referenced. That concession is in the following terms: 37 No submission is made by the prosecutor that the offender knew at the time of the offence that approval was required and deliberately sought to flout that requirement (which would require proof to the criminal standard). However, Budvalt, through its manager, was at least careless in relying on an erroneous assumption that approval for the channel was not required.

The Prosecutor's oral submissions

1. The Prosecutor's oral submissions addressed this topic in the following terms (Transcript 26 August 2020, page 9, lines 20 to 42): MUSTON … if I could take your Honour to the defendant's written submissions the first issue relates to what's set out in paras 16 and 17 under the heading of "Mistake of Law". Just pausing there, at para 17 your Honour will recall that I alluded to that earlier, para 16 is what I should have referred to earlier insofar as I know that the offender's sought to make a virtue of the complexity of the regime that your Honour's has had to deal with in this case but can I take your Honour in respect of what's said in para 16 to the record of interview which is exhibit A and in particular the answers given to questions 319 to 330 on pp 37, 38 and 46. Now what's said in paras 16 and 17 is presumably said to spring from the answers given in particular at questions 329 and 330. Now, while the prosecutor accepts and certainly does not suggest that the offence was deliberately committed in disregard of the requirement for approval it's said in its written submissions that Mr Harris appears to have been labouring under some level of misapprehension about the requirements for approval but that is as high as it goes and we say that the answers that are given at 329 and 330 don't rise to the level of the submissions made at para 16 of the defendant's written submissions. In fact, contrary to the suggestion that Mr Harris believed that a pre-existing approval in some way permitted the works to be carried out that's we say not what he says in answer to questions 329 and 330. If your Honour goes all the way back to question 303 your Honour sees that to the extent that there is mention made of previous approvals it's seen to be a previous approval which was rejected.

The Company's oral submissions

1. During the course of his oral submissions, Mr Elliott responded to that which had been put by the Prosecutor. He walked back from portion of that which I have earlier set out from the Company's written submissions. Relevantly, Mr Elliott said (Transcript 26 August 2020, page 16, lines 13 to 38): Then in our submissions we deal with a range of other considerations which we say mitigate against the consideration in para 10 that is adverse to us. The mitigating factors include those in paras 16 and 17. There we deal with the question of what might be described as moral culpability. Plainly the defendant was not acting consciously aware that it was breaching the legislation. I think my learned friend makes a valid point in relation to the language we use in the second sentence of para 16 and I don't wish to give your Honour a matter to resolve that in fact is not a matter in dispute. I accept that that sentence, "He believed that the works were permissible in accordance with the pre-existing approval the defendant held" could be better expressed and do not best reflect the evidence in question and the evidence in respect of which we rely. So I think that would be off your Honour's list of issues to deal with. The point that we were seeking to make and the evidence upon which we rely is back in annexure D to the agreed statement of facts on p 38 of 46. Your Honour will see question 329, "I was unaware that you needed permission, you know, to build a below ground channel." Then question 330, "Okay." Answer, "It's not, as far as I was aware the only time you needed permission for building a channel is if it was above ground and was across a floodway if it's going to interrupt floodwaters" et cetera. So that is the contention that we make as to the finding your Honour should make as to the state of mind of Jack Harris and the defendant in proceeding as they did. It was they proceeded not on the basis that approval was required and they were going to avoid it but instead on the mistaken basis that it was not required.

Consideration

1. As can be seen above, Mr Elliott's written submissions expressly referenced the joint reasons of Gleeson CJ and Kirby J in Ostrowski v Palmer (Ostrowski v Palmer) [2004] HCA 30; (2004) 218 CLR 493. In the context of this submission proposing, by inference, that some lesser characterisation of the Company's offending conduct was appropriate, as a consequence of Mr Jack Harris's misunderstanding of the correct regulatory position, warrants some consideration of precisely what is to be drawn from the High Court's decision in Ostrowski v Palmer.
2. Relevant to this submission for the Company, the joint reasons of Gleeson CJ and Kirby J said, at 500: Ignorance of the legal consequences that flow from the existence of the facts that constitute an offence is ordinarily not a matter of exculpation, although it may be a matter of mitigation, and in some circumstances it may enliven a discretion not to prosecute.
3. There is nothing in any of the evidence before me - let alone the untested assertions - that would indicate any valid reason why Mr Jack Harris's state of knowledge, he being a person managing a substantial cotton‑growing enterprise using (from the scale of the constructed channel and the water works shown on the final element of Exhibit 1) significant water infrastructure, might engage any need for the type of penalty mitigation postulated in the above passage from Ostrowski v Palmer.

General submissions concerning characterisation of the offending conduct

Introduction

1. Having dealt with the fact that no special consideration arises in these circumstances to mitigate characterisation of the Company's offending conduct as a consequence of what Mr Jack Harris had said was his state of ignorance of the law, it is now necessary to turn to consider the broader proposition as to how, taken overall, the Company's offending conduct is to be characterised.

The Prosecutor's submissions

1. It is to be observed, at this point, that the Prosecutor's written submissions on sentence said, at [20]: 20 There is no evidence before the Court (and thus no allegation) that the water collected, stored and channelled as a result of the channel's construction and use was not lawfully extracted from the Macquarie River. However, having regard to its obvious capacity to detain and convey water, the construction and use of the channel without approval necessarily had some impact on the fair and equitable sharing of water and the sustainable and integrated management of the water sources of New South Wales as envisaged by the WMA in so far as it increased the defendant's capacity to hold and transport water on the property during periods in which it was permitted to pump or detain water.
2. The Prosecutor also submitted, at [32] and [33]: 32 The approval process is in place in order to ensure that the significant social and economic benefits to the State that result from sustainable use of water endure for the environment, agriculture, and other aspects of the community surrounding the Barwon Darling and Lower Macquarie river systems. The approval process also ensures that there is integrated management of water sources with the management of land, soil, native vegetation and native fauna, while also accommodating the needs of irrigators to receive an equitable share of water. 33 Budvalt's actions in constructing a large channel without approval avoided this regulatory scheme and its beneficial protection of water sources. The significant degree to which the conduct offended against the objects of the WMA and the statutory provisions creating the offence increases the objective seriousness of the offences.
3. Given that the Prosecutor has conceded as set out above, that any water extracted and stored in the channel was lawfully taken by the Company pursuant to its extraction licence entitlements, there is no basis upon which I could conclude that there was some disturbance to the equitable sharing of the overall water resource. Whilst the use of the channel for water storage might have altered the timing of extraction pursuant to the Company's licence, there is no evidence upon which I could conclude that there was any adverse impact arising on any other individual or entity that also held entitlements for lawful extraction of water from the same river system.
4. The Prosecutor's written submissions also approached the question of characterisation of the Company's offending conduct in two places - the first addressing it directly and the second doing so in a more elliptical fashion by proposing that the penalty to be imposed should be "significant". The Prosecutor's position can be seen from [42] and [59] of the Prosecutor's written submissions. These paragraphs are in the following terms: 42 In the present case, while the conduct was not within or approaching "the worst category" for offences of this kind, the offending should not be regarded as technical or insignificant; the objects of the WMA, the size of the channel and the substantial volume of water which the channel was used to store and convey exclude this conclusion and instead compel a conclusion that the offending conduct was of moderate objective seriousness. … 59 Having regard to the general principles outlined above, in particular the need for general deterrence and the maximum penalty, the prosecutor submits that the monetary penalty to be imposed should be significant.

Mr Elliott's submissions

1. The written submissions for the Company responded to the first of the above extracts from the Prosecutor's written submissions in the following terms: 12 The prosecutor submits at [20] of its written submissions (PWS) that the "construction and use of the channel without approval necessarily has some impact on the fair and equitable sharing of water…in so far as it increased the defendant's capacity to hold and transport water…" (see also PWS at [41]). Such submission needs to be made good by evidence from the prosecutor to prove it beyond a reasonable doubt. There is no such evidence. The evidence is that the land on which the works were constructed was subject to approvals to use water to irrigate. The water in the channel was lawfully taken and the channel merely joined existing water reticulation infrastructure on the land. The evidence of the prosecutor's investigator (the Blackwood map) shows the capacity to store water on the land and that the storage was well below what was permitted at the time of the offence. The evidence is incapable of proving that the WMA objects were undermined, let alone to undermined to a "significant degree": PWS at [33].
2. Mr Elliott's oral submissions commenced with an acknowledgement of the undermining effect of the Company's unlawful conduct. He said (Transcript 26 August 2020, page 11, lines 21 to 30): ELLIOTT: Your Honour, can I commence by stating on the record something that has been put in our written submissions and which we accept, namely that the conduct in respect of which we have pleaded guilty we accept had the potential to undermine the integrity of the regulatory scheme in that the regulatory scheme required an application for approval to be made and we did not act in accordance with that scheme and in our submission we candidly accept that and say for reasons that I'll develop before your Honour that that is the relevant factor which will in combination with a range of mitigating circumstances result in the administering of a penalty that your Honour considers appropriate.
3. On the broader position of how the Company's offending conduct might be described as fitting with the potential range of breaches of the Water Management Act falling within s 91B, the Company's written submissions proposed: 13 The defendant submits that when regard is had to the nature of the conduct (constructing a channel to join up existing water infrastructure which was constructed over an approximate two-week period in 2015 and the use thereafter on one day), as well as the absence of any environmental harm or undermining of the statutory regime, the offending is at the bottom of the range in terms of objective seriousness.

Consideration

1. To the extent that the first of the above extracts from the Prosecutor's written submissions could be regarded as reflecting adversely on the Company, I decline to accept such an inference. That the channel might have increased the capacity of the Company to store water extracted from the Macquarie River, such water would be extracted, as the Prosecutor concedes is here the case, pursuant to a lawful entitlement for the Company to do so.
2. The "sustainable and integrated management of the water sources of New South Wales" is regulated by the licensing scheme under the Water Management Act. There is no suggestion, in these proceedings, that the Company has breached any licence held by it or that it has been involved in "water theft" of any type. I am satisfied that any proposition adverse to the Company that might be inferred from the above extract from the Prosecutor's written submissions on sentence is to be rejected.
3. However, failure to comply with the requirements of a regulatory regime established by statute tends to undermine the objects of that statutory regime. This is a truth of broad application whether to the scheme of planning and development control established pursuant to the Environmental Planning and Assessment Act 1979; the regulatory licensing regime under the Protection of the Environment Operations Act 1997 or, as here, the regulatory regime established by the Water Management Act.
4. The necessary intention of the Parliament, in establishing any regulatory regime of the types cited above, is clearly to ensure regularity, consistency of standards and public supervision of the activities encompassed. Compliance is mandatory and not discretionary for those whose activities are so regulated.
5. Failure to comply with such a regulatory regime undermines public confidence in the integrity of that scheme.
6. The unlawfully constructed channel is described in the ASOF as follows: 7 The channel is about 2 kilometres in length and thirty metres wide from outside bank to outside bank, with a water carrying width of approximately 10 metres.
7. No evidence is available as to its depth.
8. Nonetheless, it is appropriate to assume from the dimensions that are available that many, many thousands of cubic metres of earth have been excavated for the purposes of constructing this water supply work. Although this is a rolled‑up charge of "construct and use" the channel, the "use" element was for only a short period and is, therefore, only of minor importance. On the other hand, the scale of the construction work undertaken to create the channel proper demonstrates that the activities undertaken without having lawful consent were not a matter of insignificance - quite to the contrary.
9. The Company's construction of the channel - a very substantial water supply work constructed without the mandated approval being sought and obtained, does have the tendency to erode or undermine the objects established for the regulatory regime of the Water Management Act as set out in s 3 earlier quoted at [23]. The proposition put for the Company that there was an absence of undermining of the statutory regime is rejected.
10. A proper appreciation of the nature of the structure which has been constructed without consent, when viewed in the context of the regulatory regime established by the Water Management Act, causes me to conclude that the Company's offending conduct should be regarded as being above the middle of the low range of such offending conduct.
11. The fundamental impact of the Company's construction and use of the channel without consent is the undermining that this effects to the overall regulatory scheme for the management of water resources pursuant to the Water Management Act. This undermining of that regulatory scheme, by the construction of such a significant structure as well as its subsequent use, inevitably gives rise to the necessity to consider, as later discussed, matters of general deterrence as well as the need to denounce and punish the Company for its unlawful breaching of the regulatory regime.

The matters arising from s 364A of the Water Management Act

1. The Water Management Act mandates consideration of 11 different factors (to the extent that they might be relevant) as elements in the setting of any penalty to be imposed for a breach of the Act. These are set out in the provision below: 364A Matters to be considered in imposing penalty (1) In imposing a penalty on a person for an offence against this Act or the regulations, the court is to take into consideration the following (so far as they are relevant): (a) the impact of the offence on other persons' rights under this Act, (b) the market value of any water that has been lost, misused or unlawfully taken as a consequence of the commission of the offence, (c) the extent of the harm caused or likely to be caused to the environment (including, in particular, any water source or waterfront land) by the commission of the offence, (d) the practical measures that may be taken to prevent, control, abate or mitigate that harm, (e) the extent to which the person could reasonably have foreseen the harm caused or likely to be caused to the environment by the commission of the offence, (f) the extent to which the person had control over the causes that gave rise to the offence, (g) whether the offence was committed during a severe water shortage (that is, in contravention of an order in force under section 49A or 324), (h) the person's intentions in committing the offence, (i) whether, in committing the offence, the person was complying with orders from an employer or supervising employee, (j) in the case of an offence of taking water in contravention of this Act, whether the water so taken had been released for environmental purposes and, if so, whether the person was aware of that fact, (k) any civil penalty that has been imposed on the person under section 60G in relation to the conduct from which the offence arises.
2. Mr Elliott summarised what the Company put concerning these factors during the course of his oral submissions - doing so in the following terms (Transcript 26 August 2020, page 14, line 47 to page 15, line 7): Can I then direct your Honour's attention to para 14 where we deal specifically with the various factors that the statute requires your Honour to take into account for the purposes of penalty in s 364A of the Act. Your Honour will have read and we wish to emphasise the matters that are set out in the various paragraphs: No evidence of impact on a person's right, no evidence of water being lost, misused or unlawfully taken and (c) no evidence of environmental harm, (d) practical measures to prevent or control that harm doesn't arise because there's no evidence of any, the same with (e). We candidly accept the point in (f), we have control over the construction of the works and are responsible for them and (g) is inapplicable concerning severe water shortage and (h) is the person's intentions in committing the offence.
3. The Company's written submissions also noted (and I accept) that (i) to (k) of s 364A were not applicable.
4. The Company has candidly conceded (as it inevitably needed to do) that, for the purposes of s 364A(f), it had complete control over the construction and use of the channel.
5. With respect to s 364A(h), the Company's written submissions relevantly said, at [14]: - the reason for the construction of the channel is provided in Mr Harris's interview; it was to join pre-existing water infrastructure at the property to catch "rain runoff". As Mr Peter Harris makes clear in his letter, this would in fact prevent other possible environmental harm. Such explanation is unchallenged by the prosecutor. There is no evidence of any financial motive for the commission of the offence, other than the fact that the defendant was involved in a commercial enterprise (cf. PWS at [38]-[41]; [57]). The explanation provided by Mr Jack Harris does not provide any basis for the assertion that the offending was motivated by profit. If the prosecutor asserts otherwise it must prove that beyond a reasonable doubt.
6. I have earlier dealt, in the context of s 21A(2)(o) of the Sentencing Procedure Act, with the issue of whether the offending conduct was carried out for financial gain. It is not necessary to revisit the point here.
7. Although I have earlier explained why I give little weight to matters set out in Mr Peter Harris's letter, that is but a minor aspect of matters potentially arising pursuant to s 364A(h).
8. It is also to be noted that the ASOF contains nothing of relevance, in my view, that would explain the intention of the Company behind the construction of the channel. To the extent that the explanation given by Mr Jack Harris in his record of interview differs from that provided by Mr Peter Harris in his letter, I have no contestable evidence that would enable me to resolve that dichotomy. I am, therefore, satisfied that there is no proper basis upon which I can reach a conclusion for the purposes of s 364A(h), save the negative conclusion that I am not satisfied that the offence was committed for the purpose of seeking a financial gain.

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).

Specific deterrence

1. I have earlier set out, in my consideration of the Company's mitigating factors, the written submissions made by Mr Elliott, at [24] to [26], concerning the retention of Mr Adams, since 2017, to work to ensure compliance with relevant regulatory regimes. That, as there noted, was a proposition not able to be tested and, indeed, as the Prosecutor submitted, there was no evidence as to the scope and extent of Mr Adams' responsibilities. This is equally applicable as to not merely the geographic extent of his responsibilities, but also as to precisely what, in a functional sense, those responsibilities might entail.
2. As also noted, Mr Jack Harris had demonstrated, by virtue of his answers to Questions (229) and (230) of his directed interview with the Prosecutor, he did not have, as he said it, appropriate understanding of the regulatory requirements mandated when the statutory regime of the Water Management Act potentially triggered the requirement for regulatory approval for construction activities. Under these circumstances, I am satisfied that a degree of specific deterrence is required to ensure that the Company pays appropriate attention, in the future, to the requirements of the regulatory regime under the Water Management Act in the carrying out of the Company's agricultural activities.

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 like 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 a deterrent educational outcome in circumstances such as these, where a substantial cotton‑growing enterprise using irrigated water and water supply works has carried out a significantly sized unlawfully constructed water supply works as part of its business activities, must be met by sending a deterrent message of particularity to those others who are similarly commercially engaged.
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.

Introduction

1. In determining the appropriate starting penalty for this Defendant, I must undertake the mandated process of instinctive synthesis (Markarian v R (2005) 229 CLR 357; [2005] HCA 25) having regard to all the objective factors of the offending conduct (as earlier discussed) and the subjective factors peculiar to the Defendant 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 (No 2)).
3. This process permits me to arrive at a starting sentence for the offence to which the appropriate discount to be applied for the entry of the Company's guilty plea.

The submissions for the Company

1. The Company's written submissions proposed that I should have regard to the possibility of having the Company's offending conduct dealt with in the Local Court acting as a mitigating feature. This element of those submissions was in the following terms: Possibility of summary disposal 18 Given the objective seriousness of the offence, it is submitted that the possibility of summary disposal operates as a mitigating feature in this case in accordance with the principles set out in Zreika v R [2012] NSWCCA 44. Has the matter been dealt with in the Local Court, the maximum penalty was 200 penalty units ($22,000).
2. In his oral submissions, Mr Elliott accepted that if my determination as to whether or not the Company's offending conduct fell within that which was appropriate to be dealt with within the jurisdictional limit of the Local Court then the above submission was relevant. He acknowledged that if I did not so consider, the proposition would cease to have relevance (Transcript 26 August 2020, page 14, line 14 to, line 20).
3. Given my conclusion which is set out in the following section of this decision, it is unnecessary to address, in any detail, the submissions on this point made in response by the Prosecutor. It is sufficient to note that the Prosecutor rejected the proposition that the Company's offending conduct was potentially appropriate to be dealt with summarily in the Local Court, a proposition with which I agree for the reasons which follow.

Consideration

1. Earlier this year, in Chief Executive, Office of Environment and Heritage v Parrish & Son Pty Ltd [2020] NSWLEC 47, I needed to address a defence submission to the same effect. I did so at [128] to [133].
2. In those proceedings, counsel for that defendant submitted that I should have regard to the fact that the prosecutor had had the option of having this matter dealt with summarily in the Local Court and that, as a consequence, I should have regard to the far lower jurisdictional limit of the Local Court as to the extent of penalty able to be imposed on the Company. In support of this proposition, counsel for that defendant cited what had been said in Harris v Harrison [2014] NSWCCA 84, by Simpson J (as her Honour then was), at [92] and [93]: 92 A matter that was not drawn to her Honour's attention, and a significant matter, is that the offence could have been prosecuted in the Local Court, where the maximum applicable monetary penalty was $22,000. It is well established that that may be a relevant sentencing consideration: R v Crombie [1999] NSWCCA 297; R v Doan [2000] NSWCCA 317; 50 NSWLR 115. 93 In Doan, Grove J, with whom Spigelman CJ and Kirby J agreed, observed that the fact that an offence could have been dealt with in a court with a lower jurisdictional limit is an available circumstances to be taken into account; the significance of the circumstance varies from case to case (at [42]).
3. As I then observed, to the extent potentially relevant, it is clear that I am to do so. I continued, at [128] to [130]: 128 However, for a better understanding of the proposition which her Honour had derived from the decision in R v Doan [2000] NSWCCA 317; (2000) 50 NSWLR 115 (Doan), it is appropriate to turn to the relevant portion of that decision to obtain a more fine-grained understanding of the proposition providing the foundation for her Honour's observation. In Doan, Grove J (Spigelman CJ and Kirby J agreeing) said, at [42]: 42 It was submitted by the Crown that these cases do not expose any reasoning underlying a principle that the availability of summary jurisdiction and lower ceiling of penalty should be a matter of mitigation. The cases reveal that the circumstance can, rather than should, be a matter of mitigation. All offenders in the relevant situation would have lost the chance of being dealt with within the restrictions applicable in the summary court and for that reason that chance should not be ignored. The significance of the loss of that chance would undoubtedly vary from case to case and in some cases it would contribute to mitigation, in others, not. I see no reason to depart from the approach taken in those cases but they are authority for the proposition that it is a matter to be taken into account and not a universal factor for reduction of sentence. [emphasis added] 129 First, it is to be observed that all prosecutions for a breach of the statutory provision here engaged could be dealt with summarily in the Local Court. It is therefore self-evident that that position cannot be accepted as providing some universal factor of mitigation on the penalty that would otherwise be appropriate to be imposed. That is also clearly reflected in the above passage from Doan. 130 What is required is an examination of whether there is some basis to conclude that the particular circumstances of this prosecution are such that it might have been appropriate for the Prosecutor to contemplate commencing proceedings in the Local Court rather than in this Court.
4. Mr Elliott advanced no specific submission pointing to any particular circumstances which could lead me to such a conclusion.
5. My own examination of all of the matters set out in the ASOF lead me to the conclusion that there are no obvious circumstances warranting such a conclusion. The Company has been in business under its present ownership, as disclosed by the letter from Mr Peter Harris, for some 17 years and as an irrigator for about three decades.
6. The appropriateness of prosecution in this Court for the purposes of sending a general deterrence message to others engaged in this industry is dealt with elsewhere in this decision and it is unnecessary to repeat it here.
7. However, I am satisfied that there are no circumstances concerning the Company and its offending conduct that would warrant me mitigating the penalty which I otherwise consider appropriate to impose because of the jurisdictional limit which would have applied had the Prosecutor considered it appropriate to have this offending conduct dealt with summarily in the Local Court. I therefore reject the Company's submission in this regard.

Introduction

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). This is to ensure the sentence imposed is not inconsistent with the general pattern of sentencing for offences of the kind here being considered where such comparable sentencing information is available.

The Company's submissions

1. The Company's written submissions address the question of potentially comparable sentencing decisions in the following terms: 36 The Judicial Commission holds no statistics for the offence. Counsel have been unable to locate any comparators other than the decision of Hongzhi Sun v Grant Barnes v Department of Industry [2018] NSWLEC 196. The circumstances of that offending are not able to be entirely discerned from the judgment. 37 In that case, the defendant was sentenced for a number of different offences. The offending was found to be "at the upper end of the low range": at [38]. There were late pleas. For the s. 91B(1) offence, the appeal from the Local Court was upheld and a penalty of $6,400 was imposed.

The Prosecutor's submissions

1. The Prosecutor made no primary submissions concerning comparable sentencing outcomes. However, in the Prosecutor's reply submissions, what had been put on behalf of the Company was responded to succinctly in the following terms: 15 In the prosecutor's submission, the decision in Hongzhi Sun v Grant Barnes [2018] NSWLEC 196 does not provide a meaningful comparator. The maximum penalty applicable in that case was $22,000 and the factual scenario was substantially different.

Consideration

1. I am satisfied that my decision in Hongzhi Sun v Grant Barnes [2018] NSWLEC 196 (Sun) provides no assistance in the sentencing analysis here required to be undertaken. There are several reasons for this.
2. First, those proceedings were by way of appeal in Class 6 from the decision of a Magistrate in the Local Court. As the Prosecutor correctly points out, the jurisdictional limit before the Magistrate was $22,000, whilst the limit in these Class 5 proceedings is a maximum fine of $1,100,000. The relevance (or irrelevance, in these proceedings) of the possibility of prosecution of the Company in the Local Court was earlier discussed. For the reasons there outlined, I am satisfied that the jurisdictional limit in the Local Court has no relevance for my consideration in these proceedings.
3. Second, the nature of the charge in Sun giving rise to the penalty referred in submissions for the Company was set out at [9] at the second dot-point in the following terms: Court Attendance Notice 6 - using a water supply work without holding a water supply work approval being an offence against s 91B(1) of the Water Management Act
4. As can be seen, the charge related to the use only of a water supply work and was not a rolled-up charge of "construct and use" as is here the case.
5. Finally, it is clear that what Mr Sun had done was used the unapproved water supply work for the purposes of irrigating his market garden, a far cry from the scale of that which had been constructed by the Company giving rise to this charge.
6. However, it is also to be observed that, for the purposes of inferring where I had held that the seriousness of Mr Sun's offending conduct fell, the visible inference is that it was of such significance as to warrant a penalty (being a penalty reduced on appeal from that originally imposed by the Magistrate) of but a shade under 30% of the maximum penalty there available to be imposed.
7. Such an analogy, if applied in these proceedings, would infer a maximum penalty for the Company of over $300,000. Although I have concluded that a substantial starting penalty is appropriate in these proceedings (after undertaking the mandated process of instinctive synthesis), my analysis through that process does not cause me to reach a parallel conclusion as to the appropriate starting penalty amount by analogy.

Conclusion on the appropriate starting sentence

1. Having regard to the objective factors of the Company's offending conduct, as well as those subjective factors in the Company's favour, and having undertaken the process of instinctive synthesis of aggregating and weighing all those factors, I am satisfied that the appropriate starting penalty should be $280,000.

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. In these proceedings, there is a contest between the parties as to what discount the Company should be entitled as a consequence of the timing of its indication of its intention to plead guilty, followed by the subsequent entry of that plea.

The Prosecutor's position

1. The written submissions for the Prosecutor dealt with the discount to be afforded to the Company for its guilty plea, at [44] to [46], proposing (footnotes omitted): 44 Budvalt has pleaded guilty and is thus entitled to a discount for the utilitarian value of its plea. In assessing the utilitarian value of the plea, the timing of the plea is a critical factor. Section 22(1)(b) of the Crimes (Sentencing Procedure) Act 1999 requires the sentencing court to take into account not only the fact that the offender has pleaded guilty but also "when the offender pleaded guilty or indicated an intention to plead guilty." 45 The plea was entered late, having been entered on the first day of trial, after all preparations had been made for the hearing, including the prosecution preparing and filing supplementary evidence to address very extensive objections filed by the offender during the course of the proceedings. Budvalt also maintained, until the week before the trial, that the prosecutor was to be put to proof on every fact and that all evidence would have to be given by prosecution witnesses viva voce (and in person notwithstanding COVID-related restrictions), despite affidavits having been prepared as directed. The offender's approach prolonged the preparation for trial and should reduce the utilitarian benefit of the plea. 46 In all the circumstances, it is submitted that the discount should fall towards the bottom of the range.

The defence position

1. On the other hand, the written submissions for the Company proposed that I should regard the Company's plea as having had more than minor utilitarian value and thus it should be entitled to a discount of "about 10%". This was put in the Company's written submissions, at [27] and [28], as follows: 27 The offender pleaded guilty on the first day fixed for trial, however this plea was indicated to the prosecutor in advance of the hearing. It also was the result of negotiations, which saw the withdrawal of other sequences. Because of this agreement, no witnesses were required to attend for trial and there was a significant utilitarian benefit for the plea: ss. 21A(3)(k) and 22 of the Sentencing Act. 28 In accordance with the principles in Thomson v Houlten [2000] NSWCCA 309; (2000) 49 NSWLR 383, the defendant is entitled to a discount of about 10% for the utilitarian benefit of the plea.

Consideration

1. On Friday, 24 July 2020 at 3.31 pm, the legal representative of the Company and Mr Harris sent an e-mail to my Associate in the following terms: Dear Associate, We confirm that the parties have reached an agreement in relation to the above proceedings together with the proceeding Barnes v Budvalt Pty Ltd Case number 2018/231621 (which is listed for hearing on 10 August 2020). We would be obliged if you could let his honour know that the proceedings listed for hearing on Monday will now be a short matter and also have Barnes v Budvalt Pty Ltd Case number 2018/231621 re-listed for Monday.
2. What became the outcome of the Monday listing of all the matters was set out by me at [3] to [5].
3. It is to be observed that the sentencing hearing itself, being conducted for the Prosecutor entirely on the basis of the ASOF, meant that the processes for the Court were confined to a sentencing hearing (one conducted efficiently in half a day), rather than what would have necessarily been two separate, far longer trials had the question of the Defendants' guilt been contested for any or all of the charges. Although there would necessarily have been a deal of pre-trial preparation undertaken by the Prosecutor, I cannot accept that the value to the system of justice of the guilty plea to the single rolled-up charge (and the resulting necessity for only one hearing of confined length and limited complexity) is as insignificant as the Prosecutor's submission would appear to imply.
4. My assessment of the utilitarian value of the Company's guilty plea causes me to be satisfied that the appropriate discount that should be afforded in these circumstances is that proposed by Mr Elliott of 10%.
5. As a consequence, the appropriate penalty to be imposed on the Company is a fine of $252,000.

Introduction

1. The Water Management Act contains, in s 353G, the power for the Court to make a range of additional orders, orders that are clearly ones that are in addition to, and not in substitution for, any penalty to be imposed for offending conduct pursuant to s 91B and the following penalty for such conduct derived by the application of s 363B.
2. In these proceedings, the Prosecutor seeks that I require the Company to publish a notice to publicise its offending conduct and the punishment imposed on it for that conduct as authorised by s 353G(1)(a). This provision was earlier set out at [26].
3. Although the Company does not oppose the making of such an order, nor does it oppose the terms proposed by the Prosecutor for the notice, the Company does oppose the requirement that the notice be published in the Moree Champion newspaper. I address this dispute later.

The terms of the notice proposed by the Prosecutor

1. The terms of the public notice proposed by the Prosecutor were attached to the Prosecutor's written submissions in reply. As noted above, there is no dispute as to the appropriateness of the terms proposed by the Prosecutor. The terms of the proposed notice were: Public Notice On [XX XXXX] 2020, the Land and Environment Court of NSW found Budvalt Pty Ltd guilty of an offence under the Water Management Act 2000 (NSW) relating to the unauthorised construction and use of a water supply work, being an irrigation channel, on its property called "Miralwyn" at Carinda NSW. The irrigation channel was approximately two kilometres long and thirty metres wide. Budvalt Pty Ltd entered a plea of guilty to the charge. Budvalt Pty Ltd was sentenced by way of [insert whether conviction recorded and, if fined, state amount of fine] and ordered, at its expense, to publish this notice. All property owners and water users should be aware of the serious consequences of committing offences against the Water Management Act 2000, including by constructing and using unauthorised works.

The making of such a publication order

1. The use of publication orders has two deterrent effects, effects that are in addition to the specific and general deterrent outcomes sought to be achieved by the imposition of the penalty on an offender.
2. The first of those effects is the "name and shame" impact on the reputation of an offender within the relevant local community and, where also relevant, within the industry within which the offender operates. The second effect is that it puts other operators in that same industry on notice that, if they too offend, similar "name and shame" consequences are likely to follow for them.
3. For these purposes, for the Company arising from these proceedings, the first of those effects will be achieved by requiring the publication of the notice in the Moree Champion, the local paper circulating within the region where the Company's site is located and where the Company carries out its cotton‑farming activities.
4. During the course of his oral submissions, Mr Elliott indicated that the Company did not oppose the requirement to publish the notice in The Land newspaper but did oppose the requirement that it be published in the Moree Champion. His submission and my response are recorded in the transcript (Transcript 26 August 2020, page 12, lines 4 to 20) in the following terms: ELLIOTT: … The two publications that were proposed, The Land we do not oppose and accept that that would be something that would be open to your Honour to conclude was appropriate and the submission we make is that the significant embarrassment that comes with the conviction of guilty coupled with the publication in The Land of the kind the prosecutor has suggested would be an appropriate combination of penalties in the circumstances. HIS HONOUR: Isn't it the position that publication notices in addition to being an element of the embarrassing nature to which you refer also perform and have utility as matters of general deterrence and that given that this property is a cotton growing property and Moree is a significant cotton growing area in the State of New South Wales that publication in the Moree Champion might well be justified not on the basis of punishment and specific deterrence but also on the basis of general deterrence? ELLIOTT: I couldn't say to your Honour that that was not so.
5. As there are also other cotton-farming individuals or entities in that region, an element of the second of these deterrent effects will also be achieved by publication of the notice in the Moree Champion.
6. In order to spread the word to a wider audience of those actually or potentially involved in undertaking activities regulated by the Water Management Act (a significant element of the second effect), publication in The Land newspaper is directed to achieving this outcome.
7. As a consequence, although Mr Elliott submitted on behalf of the Company that publication in the Moree Champion was not appropriate, I am satisfied, for the desirability of the local effect outcomes discussed above, that ordering the notice to be published in the Moree Champion in addition to its publication in The Land newspaper is entirely appropriate (and, indeed, necessary).
8. In order to ensure that an appropriate degree of prominence in each publication is achieved, thus increasing the likelihood of the two effects being achieved (including, particularly, the warning effect), the orders in these proceedings will incorporate specifications not only of the size of the notice for each publication, but as to whereabouts in that publication the notice is to be placed.
9. Finally, to provide a check that the notice has been placed as directed in each publication, the orders will provide that the Company is to lodge a copy of the page of each publication containing the notice with the Prosecutor within 28 days of its publication in each instance.
10. Such provision of proof of publication enables the Prosecutor to be satisfied that that which I have ordered has occurred in each instance. Equally, if such proof is not provided to the Prosecutor, the options of fulfilment by the Prosecutor of the obligation and the recovery of the cost from the Company (as provided by s 353G(4) and (5) of the Water Management Act would be available to the Prosecutor.
11. Mr Elliott also submitted that the costs of publication should, in some fashion, mitigate the quantum of the fine that would otherwise be appropriate (Transcript 26 August 2020, page 12, lines 24 to 36): ELLIOTT: What I do say is that if your Honour were minded to proceed on that basis, that that would have an impact on what other form of penalty your Honour might think appropriate to administer. HIS HONOUR: They are described as additional orders, not substitutory orders, are they not, in the conventional jurisprudence on the range of matters of this type normally arising under the POE Act, but this is by analogy the publication order is similar. They are in addition to any other penalty and not in amelioration of any other penalty. Is that not the position? ELLIOTT: They are certainly in addition to, but the fact that they are ordered would be a matter your Honour would take into account in determining the amount of any fine.
12. The relevant provision (s 353G of the Water Management Act) is one which gives the Court the power to make additional orders. In this respect, it is consistent with similar powers in other environmentally protective statutory regimes. Mr Elliott cited no authority for the submission and I am unaware of any. I reject the proposition.

The Prosecutor seeks a moiety of the penalty to be imposed

1. In its written submissions, the Prosecutor seeks that a moiety (50%) of the fine to be imposed on the Company be paid to the Prosecutor, submitting: 60 The prosecutor will seek a moiety under s. 122 of the Fines Act 1996 that the defendant pay 50% of any monetary penalty imposed to the Natural Resources Access Regulator.
2. The power to award a moiety of a fine to a prosecutor is to be found in s 122 of the Fines Act, a provision earlier set out.
3. In Chief Executive, Office of Environment and Heritage v Brummell [2019] NSWLEC 114, Preston CJ discussed, between [102] and [111], the origins of, and broad operative scope for, orders awarding a moiety to a prosecutor pursuant to s 122 of the Fines Act. It is not necessary to set this out in full.
4. It is sufficient to note that the discretion to make such an order is broad and has frequently been exercised in this Court. In this instance, the making of such an order is not opposed by the Company and I can see no reason why I should not exercise the discretion to order that a moiety be paid to the Prosecutor. I will therefore so order.

Orders

1. The orders of the Court are that: In Matter No 231599 of 2018: 1. Budvalt Pty Ltd (the Defendant) is convicted of a breach of s 91B(1) of the Water Management Act 2000, in that it constructed and used a water supply work on the property known as "Miralwyn Cotton" near Carinda without having a lawful authority to cause that structure to be constructed and used; 2. The Defendant is fined the sum of $252,000; 3. The Defendant is to pay a moiety ($126,000) of the fine to Mr Grant Barnes in his capacity as Chief Regulatory Officer, Natural Resources Access Regulator; 4. The Defendant, pursuant to s 353G(1)(a) of the Water Management Act 2000, must cause a notice in the form of Annexure 3, at its expense: 1. to be placed within 28 days of the date of this order in The Land Newspaper within the first 13 pages on an odd-numbered page at a minimum size of 9 cm x 12 cm; 2. to be placed within 28 days of the date of this order in the Moree Champion, within the first 13 pages on an odd-numbered page at a minimum size of 9 cm x 12 cm; and 3. Within seven (7) days of the date of publication of each notice referred to in (a) and (b) above, the Defendant must provide to the Prosecutor, and file with the Court, a complete copy of the pages of the publications in which the notice appears; and 1. There is to be no order for costs.
2. The orders of the Court are that: In Matter No 231621 of 2018: 1. The charge is dismissed.
3. The orders of the Court are that: In Matter No 231598 of 2018: 1. The charge is dismissed.
4. The orders of the Court are that: In Matter No 231608 of 2018: 1. The charge is dismissed.

Annexure 3 Public Notice On 28 September 2020, the Land and Environment Court of NSW found Budvalt Pty Ltd (Budvalt) guilty of an offence under the Water Management Act 2000 (NSW) relating to the unauthorised construction and use of a water supply work, being an irrigation channel, on its property called "Miralwyn" at Carinda, NSW. The irrigation channel was approximately two kilometres long and thirty metres wide. Budvalt entered a plea of guilty to the charge. Budvalt was convicted of the offence charged; sentenced to pay a fine of $252,000; and ordered, at Budvalt's expense, to publish this notice. All property owners and water users should be aware of the potential serious consequences of committing offences against the Water Management Act 2000, including by constructing and using unauthorised works.

Amendments 02 October 2020 - Amendment - 2 October 2020

Reference to having costs ordered against the Defendant is deleted, as no order as to costs was made. 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: 02 October 2020