(2006) 145 LGERA 234
Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280
(2012) 192 LGERA 314
Chief Executive, Office of Environment & Heritage v Orica Pty Ltd
(2019) 242 LGERA 241
Darter v Diden [2006] SASC 152
(2006) 94 SASR 505
De Silva v The Queen [2019] HCA 48
Source
Original judgment source is linked above.
Catchwords
(2006) 145 LGERA 234
Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280(2012) 192 LGERA 314
Chief Executive, Office of Environment & Heritage v Orica Pty Ltd(2019) 242 LGERA 241
Darter v Diden [2006] SASC 152(2006) 94 SASR 505
De Silva v The Queen [2019] HCA 48(2019) 268 CLR 57
Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194(2010) 79 NSWLR 1
Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137(2006) 145 LGERA 189
Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Budvalt Pty LtdGrant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Harris [2020] NSWLEC 113
Harris v Harrison [2014] NSWCCA 84(1989) 167 CLR 348
Johnson v The Queen [2004] HCA 15(2004) 78 ALJR 616
Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170
Markarian v The Queen [2005] HCA 25(2005) 228 CLR 357
Mill v The Queen [1988] HCA 70(1988) 166 CLR 59
Muldrock v The Queen [2011] HCA 39(1998) 194 CLR 610
Plath v Rawson [2009] NSWLEC 178(2009) 170 LGERA 253
Plath v Vaccount Pty Ltd t/as Tableland Timbers [2011] NSWLEC 202
R v AB [2011] NSWCCA 229
(2011) 59 MVR 356
R v Doan [2000] NSWCCA 317
(2000) 50 NSWLR 115
R v Dodd (1991) 57 A Crim R 349
R v Gent [2005] NSWCCA 370
(2005) 162 A Crim R 29
R v Harris [2007] NSWCCA 130
(2007) 171 A Crim R 267
R v Martin [2021] NSWCCA 316
R v Nichols (1991) 57 A Crim R 391
R v Olbrich [1999] HCA 54
(1999) 199 CLR 270
R v Oliver (1980) 7 A Crim R 174
R v Tadrosse [2005] NSWCCA 145
(2005) 65 NSWLR 740
R v Thomson
R v Houlton [2000] NSWCCA 309
(2012) 188 LGERA 273
Veen v The Queen [1979] HCA 7
(1979) 143 CLR 458
Veen v The Queen (No 2) [1988] HCA 14
(1988) 164 CLR 465
Walden v Hensler [1987] HCA 54
(1987) 163 CLR 561
Weininger v The Queen [2003] HCA 14
Judgment (67 paragraphs)
[1]
tracting Pty Ltd [2018] NSWLEC 90
Environment Protection Authority v Dyno Nobel Asia Pacific Pty Ltd [2017] NSWLEC 64
Environment Protection Authority v Hanna [2018] NSWLEC 80; (2018) 235 LGERA 114
Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29
Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299
Environmental Protection Authority v Bartter Enterprises Pty Ltd (No 4) [2021] NSWLEC 45
Fahs v R (2007) NSWCCA 26
Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189
Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Budvalt Pty Ltd; Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Harris [2020] NSWLEC 113
Harris v Harrison [2014] NSWCCA 84; (2014) 86 NSWLR 422
Harrison v Harris [2013] NSWLEC 105
Harrison v Perdikaris [2015] NSWLEC 99
Hewitt v R (2007) 180 A Crim R 306
Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348
Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616
Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170
Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357
Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59
Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120
Natural Resources Access Regulator v Bao Lin Pty Ltd [2022] NSWLEC 42
Natural Resources Access Regulator v Maules Creek Coal Pty Ltd [2021] NSWLEC 135
Natural Resources Access Regulator v Tony Thompson [2022] NSWLEC 48
NCR Australia v Credit Connection [2005] NSWSC 1118
Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610
Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253
Plath v Vaccount Pty Ltd t/as Tableland Timbers [2011] NSWLEC 202
R v AB [2011] NSWCCA 229; (2011) 59 MVR 356
R v Doan [2000] NSWCCA 317; (2000) 50 NSWLR 115
R v Dodd (1991) 57 A Crim R 349
R v Gent [2005] NSWCCA 370; (2005) 162 A Crim R 29
R v Harris [2007] NSWCCA 130; (2007) 171 A Crim R 267
R v Martin [2021] NSWCCA 316
R v Nichols (1991) 57 A Crim R 391
R v Olbrich [1999] HCA 54; (1999) 199 CLR 270
R v Oliver (1980) 7 A Crim R 174
R v Tadrosse [2005] NSWCCA 145; (2005) 65 NSWLR 740
R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383
R v Todd [1982] 2 NSWLR 517
R v Visconti [1982] 2 NSWLR 104
R v Wheeler [2000] NSWCCA 34
R v Yildez [2006] NSWCCA 97; (2006) 160 A Crim R 218
R v Zeilaa [2009] NSWSC 532
RL v R [2015] NSWCCA 106
Secretary, Department of Planning and Environment v Sell & Parker Pty Ltd [2022] NSWLEC 60
Smith v The Queen (1991) 25 NSWLR 1
Tazelear v R [2009] NSWCCA 119
The Hills Shire Council v Kinnamey Civil & Earthworks Pty Ltd [2012] NSWLEC 45; (2012) 188 LGERA 273
Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458
Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465
Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561
Weininger v The Queen [2003] HCA 14; (2003) 212 CLR 629
Williams v R [2010] NSWCCA 15
Category: Sentence
Parties: Grant Barnes, Chief Regulatory Officer Natural Resources Access Regulator (Prosecutor)
Henry Payson Pty Ltd (Defendant)
Representation: Counsel:
T Howard SC with M McAuliffe (Prosecutor)
C O'Neill (Defendant)
TOPIC PARAGRAPH
Henry Payson Pty Ltd Pleads Guilty to Four Water Offences 1
The Legislative Regime Creating the Offences 7
The Commission of the Meter Offences and Dam Use and Construction Offences by Payson at Binneguy Station 10
Payson's Water Access Licence and Approvals 16
The Water Infrastructure at Binneguy Station 21
The Commission of the First Meter Offence During the 2016/2017 Cotton Season 37
The Commission of the Second Meter Offence During the 2017/2018 Cotton Season 45
The Natural Resources Access Regulator Inspects Binneguy Station 50
The Parties Dispute Three Factual Matters 51
Prosecutor's Evidence 53
Payson's Evidence 57
Sentencing Principles 60
The Purposes of Sentencing 60
Statutory Matters Required to be Taken into Account in Sentencing 61
Objective Seriousness of the Offences 66
Nature of the Offences 69
Payson's State of Mind During the Commission of the Offences 81
Payson's State of Mind During the Commission of the Meter Offences 81
Wheildon's Evidence as to the Under-recording 84
The Evidence of Barne as to the Under-recording 115
Findings on Payson's State of Mind at the Time of the Commission of the Meter Offences 123
Payson's State of Mind During the Commission of the Dam Use and the Dam Construction Offences 135
Payson's State of Mind During the Commission of the Dam Use and Construction Offences 139
The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offences 145
The Harm Occasioned by the Commission of the Dam Use and Construction Offences 149
The Harm Occasioned by the Commission of the Meter Offences 150
The Evidence of Dr Meyer 153
The Evidence of Wheildon on Environmental Harm 169
Findings on the Environmental Harm Occasioned by the Commission of the Meter Offences 171
Maximum Penalty 175
Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offences 179
Control Over the Causes of the Commission of the Offences 181
Practical Measures Which Could Have Been Taken to Prevent or Mitigate the Environmental Harm 189
Whether the Commission of the Offences Occurred During a Severe Water Shortage or Extreme Heat Event 190
Payson's Reasons for Committing the Offences 191
The Impact of the Commission of the Offences on Other Persons' Rights Under the WMA 201
The Market Value of Any Water That Has Been Lost, Misused or Unlawfully Taken as a Consequence of the Commission of the Offences 202
Payson Was Not Complying With the Orders of an Employer or Supervisor 207
The Water Taken Was Not for Environmental Purposes 208
No Other Civil Penalty for the Offending Conduct Has Been Imposed 209
The Meter Offences Involved a Series of Criminal Acts 210
The Meter Offences Did Not Form Part of a Planned Criminal Activity 215
Conclusion on the Objective Seriousness of the Offences 227
Subjective Circumstances of Payson 227
Early Pleas of Guilty 234
Assistance to the Prosecutor 245
Antecedents 248
Contrition and Remorse 249
The Good Character of Payson 259
The Likelihood of Payson Reoffending and Prospects of Rehabilitation 264
The Offences Could Have Been Prosecuted in the Local Court 265
Deterrence, Denunciation and Retribution 266
The Totality Principle 277
Consistency in Sentencing 282
Capacity to Pay a Fine 286
Costs 298
Appropriate Sentence 304
Moiety 309
Publication Order 310
Meter Compliance Checks 316
Orders 319
[4]
Henry Payson Pty Ltd Pleads Guilty to Four Water Offences
Henry Payson Pty Ltd (ACN 608 721 919) ("Payson") has pleaded guilty to four offences against ss 91I(1)(b) and 91B(1) of the Water Management Act 2000 ("WMA"), committed at 17036 Gwydir Highway, Biniguy, New South Wales ("NSW") (known as "Binneguy Station"). Payson has been charged with:
1. one count of knowingly taking water from a water source regulated by the WMA while metering equipment was not operating properly between 3 September 2016 and 21 March 2017 contrary to s 91I(1)(b) of the WMA (matter 2021/117758) ("the first meter offence");
2. one count of knowingly taking water from a water source regulated by the WMA while metering equipment was not operating properly between 7 December 2017 and 20 February 2018 contrary to s 91I(1)(b) of the WMA (matter 2021/117770) ("the second meter offence");
3. one count of using a water supply work without a water supply work approval contrary to s 91B(1) of the WMA (matter 2021/117797) ("the dam use offence"); and
4. one count of constructing a water supply work without a water supply work approval between 8 February and 9 March 2016 contrary to s 91B(1) of the WMA (matter 2021/117798) ("the dam construction offence").
The amended summons for the first meter offence relevantly states:
The prosecutor claims:
1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant), having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charges set out in the following counts:
COUNT 1
That, between about 6.00pm on 3 September 2016 and about 6.45am on 21 March 2017, at the property known as Binneguy Station, comprised of Lot 41 of Deposited Plan 751750 and 23 other lots located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91I(1)(b) of the Water Management Act 2000 (NSW) (the Act), in that, the Defendant took water from a water source to which Part 3 of Chapter 3 of the Act applied by means of a metered work while its metering equipment was not operating properly and knew by its director George Barne that the metering equipment was not operating properly.
Particulars
(a) The subject property
At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.
(b) The relevant times
The relevant times were approximately:
6.00pm on 3 September 2016 to 2.00am on 7 September 2016;
11.00pm on 14 September 2016 to 7.30am on 15 September 2016;
12.30pm on 15 September 2016 to 7.00am on 16 September 2016;
7.45am on 16 September 2016 to 11.00am on 16 September 2016;
11.45am on 16 September 2016 to 7.00am on 18 September 2016;
10.45am on 22 September 2016 to 7.45am on 23 September 2016;
5.15am on 27 January 2017 to 7.45am on 29 January 2017;
5.00am on 10 February 2017 to 5.15am on 11 February 2017;
4.30am on 17 February 2017 to 4.30am on 19 February 2017;
5.15am on 24 February 2017 to 6.30pm on 24 February 2017; and
1.45pm on 20 March 2017 to 6.45am on 21 March 2017.
(c) A person who takes water
The Defendant took water by pump extraction.
(d) From a water source to which Part 3 of Chapter 3 of the Act applies
The Gwydir Regulated River Water Source, as proclaimed in the Proclamation under the Water Management Act 2000 published in Gazette No. 110 of 1 July 2004, p 5004.
(e) By means of a metered work
Water was taken using a metered Batescrew pump located at GPS Coordinates at around Latitude -29.529040025, Longitude 150.208328485 within Lot 41 of Deposited Plan 751750, being the pump authorised for use at Binneguy Station by Combined Water Supply Work and Water Use Approval 90CA800277.
(f) Metering equipment
The pump was fitted with, or connected to, a Mace Agriflow Series 3 meter with Serial Number 26203.
(g) Metering equipment was not operating properly
The Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly in that it was not correctly measuring the volume of water extracted by means of the pump from the water source.
(h) Knew metering equipment was not operating properly.
The Defendant knew by its director George Barne that the Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly by not correctly measuring the volume of water being extracted by the pump from the water source.
(i) Evidence of the offence first came to the attention of the authorised officer on 30 July 2018
Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals - Regional Water Regulation West, on 30 July 2018.
[5]
The Legislative Regime Creating the Offences
Section 91I(1)(b) of the WMA creates an offence of taking water without a properly operating water meter:
91I Taking water when metering equipment not working
(1) A person who takes water from a water source to which this Part applies by means of a metered work while its metering equipment is not operating properly or is not operating and -
…
(b) who knows or has reasonable cause to believe that the metering equipment is not operating properly or is not operating,
is guilty of an offence.
Tier 1 penalty.
Section 91B(1) of the WMA creates an offence of constructing and using a water supply work without a water supply work approval:
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.
Section 363B of the WMA establishes the following relevant Tier 1 and 2 penalties for corporations:
363B Penalties
For the purposes of this Act:
(a) a Tier 1 penalty corresponds to a maximum penalty of:
(i) in the case of a corporation, 20,000 penalty units and, in the case of a continuing offence, a further penalty of 2,400 penalty units for each day the offence continues, or
(ii) in any other case, imprisonment for 2 years or 10,000 penalty units, or both, and, in the case of a continuing offence, a further penalty of 1,200 penalty units for each day the offence continues, and
(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) in any other case, 2,250 penalty units and, in the case of a continuing offence, a further penalty of 600 penalty units for each day the offence continues…
[6]
The Commission of the Meter Offences and Dam Use and Construction Offences by Payson at Binneguy Station
Many of the basal facts giving rise to the commission of the offences were agreed between the parties. Payson is an Australian proprietary company limited by shares and was registered on 13 October 2015. Barne was appointed (and remains) as Payson's sole director and secretary on that date.
During the offending periods Payson operated a farming business that involved, among other things, the irrigation of cotton crops at Binneguy Station. Barne is the registered owner of Binneguy Station after he acquired the property by transfer on 23 September 2015.
Binneguy Station is located within the Moree Plain Shire local government area, approximately 39 km east of Moree. A section of the Gwydir River, a major perennial river within the Barwon catchment, runs adjacent to a north-eastern area of Binneguy Station.
Binneguy Station is over 1,500 ha and comprises 24 lots across Deposited Plans ("DP") 596939, 610624, 657698, 665701, 721690, 751750, 954967, 955066, 1036697, 1079760 and 1100126.
An arial photograph map of Binneguy Station is below:
At all relevant times, there was a dam at Binneguy Station located on Lot 137 of DP 751750 ("dam 1"). Between 8 February and 9 March 2016, Payson constructed a second dam adjacent to dam 1 ("dam 2"). The construction and use of dam 2 is the subject of the dam construction and the dam use offences.
[7]
Payson's Water Access Licence and Approvals
From 1 July 2016 the Water Sharing Plan for the Gwydir Regulated River Water Source 2016 ("2016 WSP") applied to the Gwydir Regulated River Water Source ("the water source"). At all material times, the section of the Gwydir River adjacent to Binneguy Station was part of the water source.
By reason of the proclamation made by the Governor under ss 55A and 88A of the WMA and published in Government Gazette No 110 on 1 July 2004, Pt 2 and Pt 3 of Ch 3 of the WMA applied to the water source.
Barne held the following approval and water access licences granted under the WMA:
1. a regulated river (general security) access licence, reference number 90AL800275 ("WAL 367") for 780 units of water from the water source;
2. a supplementary access licence, reference 90AL800276 ("WAL 368"), for 270.1 units of water from the water source; and
3. a combined water supply works and water use approval 90CA800277 for the construction and use of Binneguy Station's river pump to obtain water from the water source for the purpose of irrigation ("combined approval 90CA800277").
WAL 367 and WAL 368 each nominated combined approval 90CA800277 as the only authorised extraction point.
No person or entity, including, relevantly, Payson or Barne, has ever held an approval under the WMA or the Water Act 1912 that authorised the construction or use of dam 2.
[8]
The Water Infrastructure at Binneguy Station
At all material times, Payson extracted water from the water source by a Batescrew Axial Flow pump ("the river pump") for the purposes of irrigation.
The river pump was driven by an engine that was fixed to an Amarillo right-angled gear drive unit. In the period between 1 July 2016 and July 2017, this engine was a caterpillar 3208T. From August 2017, the river pump was powered by a Volvo Penta TAD540-542VE engine.
The river pump was connected to a pipe ("the pipe") which, at one end, was positioned in the Gwydir River and, at the other end, was positioned at or near the entrance to the main channel that carried water from the water source to Binneguy Station ("the main channel").
By operation of the river pump water was pumped from the water source through the pipe and into the main channel. The water then flowed by gravity along the main channel for approximately 1 km into another pipe that conveyed the water under the Gwydir Highway. Water flowing through that pipe discharged into the main channel and flowed for approximately 2 km before it was directed into dam 1.
The image below shows the approximate route taken by water extracted by the river pump from the water source:
A pump was installed in a sump forming part of the infrastructure of dams 1 and 2 and was used to pump water from the sump, hydraulically connected to the dams, into the head ditch for supply to the irrigated crop fields by three-inch siphon pipes ("the dam pump"). The siphon pipes were typically distributed every 2 m to irrigate every second row of crop.
A MACE brand AgriFlo Series 3 meter ("the meter") was installed at Binneguy Station during the charge periods. It was an ultrasonic meter which comprised of, among other things, a display panel and a sensor probe connected to a shaft, namely, a MACE Doppler ultrasonic sensor ("the Doppler sensor"). The display panel was attached to a metal pole about 5-7 m from the river pump. The Doppler sensor was installed into the pipe and was connected to a display panel by an electrical power cable. The meter measured the rate of the flow of water extracted by the river pump as it travelled through the pipe where the Doppler sensor was located. The rate was expressed in ML per day and was recorded at 15 min intervals between September 2016 and February 2018.
[9]
The Commission of the First Meter Offence During the 2016/2017 Cotton Season
Between October 2015 and March 2018, James Wheildon was employed by Payson as a farm manager at Binneguy Station. Wheildon was responsible for the day-to-day farming operations at Binneguy Station, including budgeting, purchasing machinery, planning for the planting of crops, and irrigation.
Following the construction of dam 2, and prior to the 2016/2017 cotton season, Barne provided Wheildon with a document drafted by Wilde Civil showing the cumulative capacities of the dams at different heights.
A cotton season, or year, runs from September of the first year to March or April of the second year.
The 2016/2017 cotton season began in October 2016 and ended in April 2017. From time to time throughout that season water was pumped from the water source by Wheildon on behalf of Payson.
The following information was recorded by the meter during the 2016/2017 cotton season after each pumping event initiated by Wheildon:
No Period Meter Read Average flowrate Water extracted
6.00pm 3/9/2016 to 2.00am 7/9/2016 Start: 2795.39 32.23 ML/day 107.42 ML
End: 2902.81
11.00pm 14/9/2016 to 7.30am 15/9/2016 Start: 2903.02 28.18 ML/day 10.06 ML
End: 2913.08
12.30pm 15/9/2016 to 7.00am 16/9/2016 Start: 2914 36.29 ML/day 27.73 ML
End: 2941.73
7.45am 16/9/2016 to 11.00am 16/9/2016 Start: 2942.65 28.48 ML/day 3.85 ML
End: 2946.5
11.45am 16/9/2016 to 7.00am 18/9/2016 Start: 2947.07 30.50 ML/day 50.00 ML
End: 3002.07
11.00am 18/9/2016 to 7.15am 21/9/2016 Start: 3002.36 31.23 ML/day 88.85 ML
End: 3091.21
[10]
On each occasion that Payson pumped water from the water source in the 2016/2017 cotton season, the meter was not operating properly because it under-recorded the volume of water taken.
The cause of the under-recording was the incorrect positioning of the Doppler sensor within the pipe. The Doppler sensor had been positioned to measure a reduced area of water, and therefore, it recorded a lower volumetric flow rate of water passing through the pipe than the flow that was actually occurring. As the evidence demonstrates, Payson, through its director Barne, knew that the meter was under-recording these volumes of water.
In the 2016/2017 cotton season, there was approximately 152 ha of flood irrigated cotton crops at Binneguy Station. The crop was irrigated and fertilised and there was no evidence of any major agronomic problems. Payson produced 1,652.79 bales of cotton (at 227 kg each) from that irrigated crop.
[11]
The Commission of the Second Meter Offence During the 2017/2018 Cotton Season
The 2017/2018 cotton season began in October 2017 and ended in April 2018. Throughout the season water was pumped from the water source by Wheildon on behalf of Payson as required.
The following information was recorded by the meter during the 2017/2018 cotton season after each pumping event initiated by Wheildon:
No Period Meter Read Average flowrate Water extracted
5.15am 7/12/2017 to 11.45pm 9/12/2017 Start: 3291.03 25.22 ML/day 69.88 ML
End: 3360.91
1.30am 10/12/2017 to 9.00am 10/12/2017 Start: 3361.16 23.14 ML/day 7.22 ML
End: 3368.38
1.45pm 15/12/2017 to 5.15am 16/12/2017 Start: 3368.63 23.82 ML/day 15.39 ML
End: 3384.02
5.30pm 16/12/2017 to 5.30am 17/12/2017 Start: 3384.23 20.36 ML/day 10.18 ML
End: 3394.41
7.15am 17/12/2017 to 8.15am 17/12/2017 Start: 3394.66 24.48 ML/day 1.03 ML
End: 3395.69
9.15am 17/12/2017 to 4.30am 19/12/2017 Start: 3395.93 24.61 ML/day 44.36 ML
End: 3440.29
4.15am 21/12/2017 to 9.00am 23/12/2017 Start: 3440.63 22.58 ML/day 49.64 ML
End: 3490.27
4.30am 26/12/2017 to 2.45pm 26/12/2017 Start: 3490.52 23.81 ML/day 10.16 ML
End: 3500.68
3.15pm 26/12/2017 to 6.00pm 26/12/2017 Start: 3500.93 21.75 ML/day 2.47 ML
End: 3503.40
7.15pm 26/12/2017 to 8.45am 28/12/2017 Start: 3503.64 23.50 ML/day 36.72 ML
End: 3540.36
[12]
As was the case with the 2016/2017 cotton season, the meter was not operating properly during the 2017/2018 cotton season as a result of the incorrect positioning of the Doppler sensor in the pipe which under-recorded the volume of water taken.
Likewise, on each occasion that Payson pumped water from the water source, Payson, through Barne, knew that the meter was under-recording the volume of water being taken.
During the 2017/2018 cotton season there were approximately 245 ha of flood irrigated cotton crops at Binneguy Station. The crops were irrigated and fertilised, and there was no evidence of any major agronomic problems. Payson produced 2,883 bales of cotton (at 227 kg each) from the irrigated crops.
[13]
The Natural Resources Access Regulator Inspects Binneguy Station
On 30 October 2018 Senior Investigators Simon Taylor and Andrew Mannall of the Natural Resources Access Regulator ("NRAR"), attended Binneguy Station where they inspected the Doppler sensor and removed it from the pipe. They observed that the sensor face of the Doppler sensor was turned approximately 45 degrees away from upstream, that is, it was angled towards the side of the pipe. Because the Doppler sensor was not compliant with the manufacturer's installation guidelines, it reduced the measurement area thereby decreasing the flowrate value recorded by the meter.
[14]
The Parties Dispute Three Factual Matters
The majority of the evidential dispute in the proceedings concerned three factual controversies between the parties, namely:
1. first, the degree to which the meter under-recorded the volume of water taken;
2. second, the extent of Barne's knowledge about the degree to which the meter was under-recording; and
3. third, the level of Barne's involvement in the running of the business during the offending period.
These matters were relevant to the state of mind of Payson at the time of the commission of the offences, the degree of control that Payson had over the causes of the offending conduct, and Payson's objective culpability for the commission of the offences.
[15]
Prosecutor's Evidence
In addition to the statement of agreed facts, the prosecutor relied upon a series of text and email communications between Barne, Wheildon and others; three meter data extract sequences during the offending period; water account statements for WAL 367 and WAL 368; a letter from SMK Consultants to the NRAR dated 26 February 2019; the expert evidence of Adjunct Professor Dr Wayne Meyer, an agronomist, dated 21 April 2021 ("the Meyer report"); and affidavits from the following witnesses:
1. Wheildon, affirmed on 19 March 2020 ("the Wheildon affidavit"), annexing a statement made by Wheildon to the NRAR during its investigation on 12 September 2018 ("the Wheildon statement");
2. Kathleen Collingridge, affirmed on 20 April 2021 ("the Collingridge affidavit"); and
3. Rowan Murray, affirmed on 3 May 2022 ("the Murray affidavit").
Wheildon deposed that at all material times he was the farm manager at Binneguy Station, employed by Payson from October 2015 to early 2018. In his affidavit, he described his work history and duties at Binneguy Station, the water management and irrigation system at the station, and the circumstances of the commission of the meter and dam use and construction offences. His evidence is, where relevant to the sentencing considerations that the Court must take into account, discussed in detail below.
Collingridge is a Customer Systems Analyst at WaterNSW and has held this role from 2007 onwards. He provided evidence with respect to WaterNSW's Water Accounting System ("WAS"), its functionality, and the water account statements for WAL 367 and WAL 368.
Murray has been a Trade Analyst Coordinator at the Department of Planning and Environment ("the Department") since December 2021. Prior to this role, he was a Water Resource Analyst at the Department. He deposed to the weighted average price of water from the water source during the period of the commission of the offences.
[16]
Payson's Evidence
In addition to the statement of agreed facts, Payson relied upon: various text and email communications between Barne and Wheildon; a map of Binneguy Station which Wheildon marked with the location of the station's rain gauges; an email to the NRAR service desk from Belynda Wheildon (Wheildon's wife) on 30 July 2018, reporting the commission of the offences; Long Paddock data in relation to Pallamallawa from 1 September 2016 to 1 April 2017; information from Payson's dropbox relating to rainfall gauges on the Station; and affidavits from the following witnesses:
1. Barne, sworn 17 May 2022 ("the first Barne affidavit");
2. Barne, sworn 18 May 2022 ("the second Barne affidavit"); and
3. Ryan Hunt, sworn 18 May 2022 ("the Hunt affidavit").
In his affidavits Barne provided evidence of his personal circumstances and the events leading up to the commission of the meter and dam use and construction offences. Again, where relevant, his evidence is dealt with in greater detail below.
Hunt is the Principal of AgriFlo Solutions Pty Ltd. He was approved by the Department to validate and install water meters. He deposed that he attended Binneguy Station on 7 January 2021, to install and validate a NSW non-urban water meter in accordance with the manufacturer's specifications as required by WaterNSW.
[17]
The Purposes of Sentencing
The purposes of sentencing are set out in s 3A of the Crimes (Sentencing Procedure) Act 1999 ("CSPA") as follows:
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.
[18]
Statutory Matters Required to be Taken into Account in Sentencing
Subsections 21A(2) and (3) of the CSPA set out aggravating and mitigating factors that the Court must consider. Factors relevant to the facts of this case are:
21A Aggravating, mitigating and other factors in sentencing
…
(2) Aggravating factors The aggravating factors to be taken into account in determining the appropriate sentence for an offence are as follows-
…
(m) the offence involved multiple victims or a series of criminal act,
(n) the offence was part of a planned or organised criminal activity,
(o) the offence was committed for financial gain…
The court is not to have additional regard to any such aggravating factor in sentencing if it is an element of the offence.
(3) Mitigating factors The mitigating factors to be taken into account in determining the appropriate sentence for an offence are as follows-
…
(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),
…
(k) a plea of guilty by the offender (as provided by section 22),
…
(m) assistance by the offender to law enforcement authorities (as provided by section 23)…
For offences created under the WMA, the Court must also consider the matters set out in s 364A of that Act:
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 or an extreme event (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.
[19]
Objective Seriousness of the Offences
The objective gravity of the offences fixes both the upper and lower limits of proportionate punishment. It fixes the upper limit insofar as the sentence must not exceed that which can be justified as appropriate or proportionate to the gravity of the crime considered in light of its objective circumstances (Veen v The Queen (No 2) and Hoare v The Queen [1989] HCA 33; (1989) 167 CLR 348 at 354). It fixes the lower limit because allowance for the subjective factors of the case ought not produce a sentence which fails to reflect the objective gravity or seriousness of the offence (R v Dodd (1991) 57 A Crim R 349 at 354 and R v Nichols (1991) 57 A Crim R 391 at 395).
The objective seriousness is to be determined by reference to the nature of the offences and not by reference to matters that are personal to a particular offender (Muldrock v The Queen [2011] HCA 39; (2011) 244 CLR 120 at [27]).
In determining the objective seriousness or gravity of the offences the relevant objective circumstances include: the nature of the offences; the maximum penalty under the Act creating the offences; the reasons for committing the offences; the environmental harm caused by the commission of the offences; the foreseeability of the risk of environmental harm caused by the commission of the offences; the practical measures that could have been taken to prevent environmental harm; Payson's control over the causes giving rise to the offences; and Payson's state of mind at the time of committing the offences.
[20]
Nature of the Offences
The nature and purpose of the provision that has been contravened, and its place in the statutory scheme, speak to the objective seriousness of an environmental offence (Bentley v BGP Properties Pty Ltd [2006] NSWLEC 34; (2006) 145 LGERA 234 at [168]-[172]; Plath v Rawson [2009] NSWLEC 178; (2009) 170 LGERA 253 at [49] and Chief Executive, Office of Environment & Heritage v Orica Pty Ltd; Environment Protection Authority v Orica Pty Ltd [2015] NSWLEC 109 at [59]).
The relevant objects contained in s 3 of the WMA identify the purpose of creating the offences with which Payson has been charged:
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.
In relation to these objects, in Harrison v Perdikaris [2015] NSWLEC 99 the Court observed that (at [46]-[47]):
46 There is a need for the upholding of the regulatory system under the WM Act. The system depends on persons, first, taking steps to ascertain when approval is required to carry out activities, including controlled activities on waterfront land, secondly, making application in the appropriate form and manner (including environmental impact assessment of the activity) and obtaining any approval so required before carrying out the activity and, thirdly, complying with the terms and conditions of any approval granted in carrying out the activity.
47 Offences which undermine the integrity of the regulatory system are objectively serious. Use of the criminal law ensures the credibility of the regulatory system.
[21]
Payson's State of Mind During the Commission of the Offences
[22]
Payson's State of Mind During the Commission of the Meter Offences
It is relevant in determining the seriousness of the commission of the meter offences to consider the state of mind of Payson at the time of their commission. Section 91I(1) of the WMA is not a strict liability offence. By pleading guilty to these offences, Payson has accepted that it knew, or had reasonable cause to believe, that the meter was not operating properly or at all.
The prosecutor submitted that Payson had actual knowledge that the meter was recording approximately half of the water taken during the offending period. Knowledge of the significant extent of the under-recording increases the objective seriousness of the meter offences and elevates the culpability of Payson's conduct.
Payson argued that its knowledge of the under-recording was acquired through representations made to Barne by Wheildon. That is, Barne did not otherwise form an independent view as to the extent of the under-recording. Furthermore, Payson stridently rejected that the under-recording was by a factor of half, and moreover, that it knew that the under-recording was of this magnitude.
[23]
Wheildon's Evidence as to the Under-recording
Wheildon deposed that Payson planted 147-150 ha of irrigated cotton crop in the 2016/2017 cotton season. The crop was planted on three fields commencing sometime between 20 October to 22 October 2016, and each field required approximately three days to be planted.
Wheildon stated that he learnt of a potential high flow event, that is, a flood event from the water source that allowed additional water to be taken under WAL 368, in August or September 2016 from other farmers ("the September 2016 high flow event"). Accordingly, he applied for an allocation of additional water through the WAS.
It was during the September 2016 high flow event that Wheildon initially had a "feeling" that the "meter may not have been working properly" because the meter read that 28 ML per day had been taken from the water source but dam 1 on Binneguy Station had already reached capacity, indicating that a greater volume of water had been taken than had been recorded (T71:35-39).
Consistent with his written evidence, Wheildon gave the following oral evidence (T96:07-16):
Q. So you could see when you turned the pump on that there was more water than you would expect coming out of the sump?
A. At this stage I already knew that there was more thing and it wasn't from this stage, it was from the very first pumping, when we put water in the dam and the dam we pumped 300 odd megs, that's where the initial, oh yeah, okay, well we've taken a lot more water. I mean, it was a known fact by this stage, as you can see by the texts.
Q. But you didn't know by how much, did you?
A. No.
Prior to the end of September 2016, dam 1 (which had a capacity of 900 ML) was full and flowing over the spillway into dam 2 (see emails sent between Barne and Wheildon during that period). Dam 2 had been empty prior to the September 2016 high flow event and only 313 ML of water had been recorded as having been pumped from the water source during that event. There was, therefore, more than double the amount of water in dams 1 and 2 than that recorded by the meter.
On 21 September 2016 Wheildon emailed Barne notifying him that water had spilled into dam 2 and that he estimated that they had access to approximately 900 ML of water from both dams. Wheildon also attached photographs of dam 1 to the email.
Wheildon also observed in his statement that:
31. There were local rainfall events around the time of the high flow, but these were not significant as I remember there was little to no run off and would have not accounted for the amounts in the dams which was in excess of what the meter on the pump had recorded.
[24]
Wheildon explained that the statement "my feeling in 60 is 32" meant that he had estimated that the meter was recording 32 ML per day when 60 ML per day was being pumped, but he acknowledged that such calculations were not easy to make (T94:30-95:15).
About halfway through the 2016/2017 cotton season, Wheildon recalled irrigating the crop by simultaneously pumping water from the dam and river pumps into the head ditch ("the simultaneous pumping event"). Wheildon knew from experience that the dam pump pumped at a rate of 50 ML a day and that it would run about 100-110 of the three-inch syphon pumps used at Binneguy Station to transfer water from the head ditch to the cotton crop. When he pumped the dam and river pumps simultaneously, Wheildon observed that he was able to run an additional 140 of the three-inch syphon pipes. This indicated that the river pump was operating at a greater rate than the dam pump, despite the meter-reading for the river pump showing a much lower rate.
Wheildon testified that because of the simultaneous pumping event he raised with Barne his concern that more water was being taken than was recorded by the meter and that it needed to be fixed.
According to Wheildon, Barne responded by threatening Wheildon:
38. As a result of this I confronted George again about my concerns of taking more water than was recorded. I do not remember the conversation word for word, but he threatened me with my job and said something to the effect of, "You won't work in this industry (or area) again, because you won't get anything but fired and no reference by me, if you push this issue. You'll be in as much trouble as me as you're the one who ordered the water and pumped it. I don't want to hear anything about it." I also remember he said something like "If we fix the meter it will all of a sudden show that we are ordering twice as much water compared to the past couple of years and put us at risk of getting busted." He went off on a few tangents. During this conversation he was yelling at me in a one way conversation and was very aggressive, being inches away from my face. I did not feel physically threatened, but felt that my career in the industry was under threat.
Furthermore, Barne made it clear not to email, text or talk to other people about the pump. He told Wheildon that there was to be "no paper trail, and that we'd both be in trouble".
[25]
The Evidence of Barne as to the Under-recording
As Payson submitted, whose version of events to accept was not a question of whether Barne's evidence was the preferable version of events, but whether it might be true so as to give rise to reasonable doubt (citing Liberato at 515 and De Silva v The Queen [2019] HCA 48; (2019) 268 CLR 57 at [12]).
Payson agreed that it knew that the meter was under-recording. However, it did not accept that the prosecutor had proven beyond reasonable doubt that:
1. Wheildon had raised the issue of the meter under-recording in the manner described by him (T74:05-07);
2. Barne was disgruntled about the meter re-calibration because it risked exposing that the meter was under-recording. Rather, as Wheildon accepted, Barne could have been upset about the visit from Waterquip because it was an unbudgeted expenditure (T72:05-07);
3. a confrontation between Barne and Wheildon occurred as described by Wheildon. According to Payson, the text and email communications between Barne and Wheildon during this period were inconsistent with an argument having taken place;
4. Wheildon was not the architect of any fabricated water budget given that he had created the document and was responsible for entering the details into it (T103:30-40); and
5. after the flapper valve was installed at the end of 2017, Barne told Wheildon to move the Doppler sensor and to reinstate it to its original position.
Payson also emphasised that Wheildon had acknowledged that he had motive to lie at least in relation to his own responsibility for the offending conduct because of the risk of reputational damage to Wheildon and that he, therefore, had a "strategy" to shift blame to Barne to protect his own reputation (T123:03-10).
In the first Barne affidavit, Barne deposed that he knew by 28 January 2017 (when the text message exchange extracted above took place) that the meter was under-recording:
52. I accept that by this stage, I knew that the meter may be under-recording the amount of water being pumped from the river. I formed this belief based on what Mr Wheildon had told me. He thought that the meter was recording about half of the total amount of water that was being pumped from the river. I do not recall if we discussed this before 28 January 2017, but on a couple of occasions after January 2017, Mr Wheildon said to me that he thought we were getting "two for the price of one". I did not understand how Mr Wheildon had come to that conclusion and I did not know how accurate his estimate was.
[26]
Findings on Payson's State of Mind at the Time of the Commission of the Meter Offences
The prosecutor submitted that the Court should accept Wheildon's evidence of Payson's knowledge of the meter under-recording and find that:
1. upon his return from overseas and upon learning that Waterquip had checked the meter, Barne was upset about Waterquip attending Binneguy Station because he knew that the meter was under-recording and he did not want it exposed;
2. a confrontation between Barne and Wheildon took place in January 2017 as described by Wheildon;
3. a confrontation occurred between Barne and Wheildon after the simultaneous pumping event;
4. Barne knew that the meter was under-recording by a factor of 1.8 at the very least, but more likely by half;
5. Barne had instructed Wheildon to move the Doppler sensor back to its incorrect position after Wheildon installed the flapper valve;
6. Barne directed Wheildon to fabricate a water budget for the 2017/2018 cotton season for the purpose of Payson dealing with its cotton broker and agronomist; and
7. the regulator was deceived insofar as the Water Account Statement for Barne's general security water access licence WAL 367 incorrectly recorded the amount of water taken due to the under-recording by the pump meter. The incorrect balance was carried over to the 2017/2018 water year as an opening balance. The deception was two-fold: first, Payson took more water than it recorded having been taken and more water than it was entitled to take under Barne's supplementary (high flow) water access licence WAL 368 during the 2016/2017 water year. And second, because of this Payson did not take more water under its general security licence WAL 367.
In response, Payson denied that the Court could be satisfied to the requisite standard that any of the findings outlined above could be made. In particular, it submitted that the Court could not be satisfied beyond reasonable doubt that Payson knew the meter was under-recording by half, or that Barne had directed Wheildon to falsify the water budget, contending that the budget was created by Wheildon alone.
In respect of the former allegation, Payson contended that while Wheildon was an experienced cotton farmer, the absence of a working meter meant that he was unable to accurately measure the amount of water actually extracted from the river. For the purpose of calculating how much water was available for the 2017/2018 cotton season, Wheildon had proceeded on an estimate that 1.8 ML of water was extracted for each megalitre that was recorded by the meter while recognising that there was a 10-15% margin of error. It was therefore possible that between 1.53 ML (1.8 x 0.85) and 2.07 ML (1.8 x 1.15) of water was extracted for each megalitre that was recorded by the meter. This range was inaccurate and overstated the degree to which the meter was under-recording.
[27]
Payson's State of Mind During the Commission of the Dam Use and the Dam Construction Offences
With respect to the dam construction and the dam use offences, these are crimes of strict liability which means that mens rea is not an element of the offences. However, the state of mind of Payson at the time of their commission is a relevant consideration in the determination of an appropriate sentence. A strict liability offence that is committed intentionally, negligently, or recklessly, will be objectively more serious than one committed accidentally (Camilleri's Stock Feeds at 700A-700E; Gittany Constructions Pty Ltd v Sutherland Shire Council [2006] NSWLEC 242; (2006) 145 LGERA 189 at [123]; Director-General of the Department of Environment and Climate Change v Rae [2009] NSWLEC 137; (2009) 168 LGERA 121 at [42] and Rawson at [98]).
The prosecutor contended that Payson committed the dam use and the dam construction offences recklessly because Barne had been put on notice that an approval may be required but did not seek an approval or make further inquiries. The prosecutor submitted that:
1. in the first Barne affidavit, he deposed that he met with SMK Consultants in late 2015 who told Barne that "it was a grey area in terms of the need for any approvals, because of the existence of harvestable rights which permitted the construction of dams, with, in the case of Binneguy Station, a capacity of just over 100 megalitres". During cross-examination it was evident that Barne correctly understood that a "grey area" referred to an area of uncertainty (T254:29-46):
Q. You knew, when you prepared your affidavit, that a grey area, the expression, "A grey area" describes and area of uncertainty?
A. Yes.
Q. The position is, is it, that Mr Taylor told you that it was an uncertain matter as to whether you needed approval?
A. He didn't say it was an uncertain matter.
Q. Did he use the words, "grey area"?
A. Yes.
Q. You understood that expression at the time when he used those words to mean an area of uncertainty?
A. I understood it to mean that the law didn't expressly say that we couldn't do what we were doing and therefore it was okay to do it. That, that was my interpretation when he said, "grey area". Because if he'd thought, said, thought anything else, he would have suggested that I go and talk to my solicitor.
Barne sought to minimise his responsibility for failing to obtain the requisite approval by suggesting that he held a belief based on what SMK Consultants had told him that no approval was required, not because of any harvestable rights, but because of an obligation to prevent pollution of waters by tailwater from the farm;
1. in light of dam 2 adding a storage capacity of 610 ML, Barne offered no rational explanation for his belief that a legal obligation to prevent tailwater polluting the river would obviate the need to obtain approval for the building of a 610 ML dam;
2. Barne could not give a satisfactory explanation as to why he did not seek legal advice about whether or not the dam construction works, which cost around $150,000, required approval. In oral evidence he stated that he did not want to expend funds on paying for advice from his solicitor (T255:01-02); and
3. Barne had studied law for three years at Bond University.
[28]
Payson's State of Mind During the Commission of the Dam Use and Construction Offences
In Plath v Vaccount Pty Ltd t/as Tableland Timbers [2011] NSWLEC 202 the Court considered the test for recklessness (at [98], quoted recently in Environment Protection Authority v Albiston [2020] NSWLEC 80 at [98]):
98 The term recklessness describes the state of mind of an offender who, while performing or failing to perform an act, is aware of the risk that a particular consequence is likely, in the sense of probable or possible, to result from that act or omission (Pemble v R (1971) 124 CLR 107, La Fontaine v R (1976) 136 CLR 62 and R v Crabbe (1985) 156 CLR 464). Recently in Blackwell v R [2011] NSWCCA 93, the Court of Criminal Appeal described the mental element of "reckless" as (at [76]):
76 The effect of this line of authority is that where the mental element of an offence is recklessness, the Crown must establish foresight of the possibility of the relevant consequence.
An offender's conduct will be found to be reckless if he, she or they are put on notice, in the sense that he, she or they believes or suspects that an act or omission may be unlawful but nevertheless proceeds to engage in it without making further enquiries (Director-General, Department of Environment and Climate Change v Hudson (No 2) [2015] NSWLEC 110 at [136], citing Chief Executive Office of Environment and Heritage v Rummery [2012] NSWLEC 271; (2012) 192 LGERA 314 at [126] and Chief Executive of the Office of Environment and Heritage, Department of Premier and Cabinet v Turnbull [2014] NSWLEC 150 at [141]).
The test for recklessness is subjective (Chief Executive, Office of Environment and Heritage v Brummell [2019] NSWLEC 114; (2019) 242 LGERA 241 at [51]).
Although Barne's evidence was to the effect that he did not believe that he needed an approval to construct and use the dam, in light of the evidence outlined above, I do not accept his evidence in this regard.
I am satisfied to the requisite criminal standard that Payson committed these offences recklessly notwithstanding his denial to the contrary. I accept the prosecutor's submissions in this regard. In particular, I am persuaded by the fact that:
1. as Barne acknowledged, SMK Consultants had advised him that the need for approval was a "grey area". He was therefore put on notice that an approval might be required but did not ascertain if an approval was necessary;
2. SMK Consultants were not lawyers;
3. Barne was not as unsophisticated as he asserted. He had a legal education and at all times had access to a solicitor;
4. Barne's explanation of why he did not seek legal advice as to whether the works required approval (of which Payson paid $50,000 and his father's company incurred the remaining $100,000) was unconvincing, namely, that he believed that there was no legal impediment to going ahead with the dam "and therefore, seeing my solicitor, at cost, was unnecessary" (T255:45).
[29]
The Environmental Harm Occasioned or Likely to be Occasioned by the Commission of the Offences
The extent of the harm caused, or likely to be caused, to the environment by the commission of the meter and dam use and construction offences is relevant to the objective seriousness of the offences (s 364A(1)(c) of the WMA).
In Environment Protection Authority v Waste Recycling and Processing Corp [2006] NSWLEC 419; (2006) 148 LGERA 299, Preston J stated that environmental harm includes both actual and potential harm (at [145]-[149]). His Honour identified the following principles in establishing environmental harm, namely, that:
1. harm is not limited to measurable harm, such as actual harm to human health, and can include a broader notion of quality of life;
2. harm can include harm to the environment and its ecology resulting from adverse impacts to a particular animal or plant;
3. harm can be direct or indirect, individual or cumulative;
4. the culpability of the defendant depends in part on the seriousness of the environmental harm; and
5. the fact that the environment that is harmed by the defendant's conduct was already disturbed or modified is not a mitigating factor.
Contrary to the submissions of the prosecutor (T349:30-35 and 41-46), harm can result from conduct that undermines a regulatory scheme which seeks to prevent environmental damage (Environment Protection Authority v M A Roche Group Pty Ltd [2015] NSWLEC 29 at [23] and Thompson at [114] and [117]-[118]).
As Moore J remarked in Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Budvalt Pty Ltd; Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator v Harris [2020] NSWLEC 113 (at [119]-[121]):
119 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.
120 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.
121 Failure to comply with such a regulatory regime undermines public confidence in the integrity of that scheme.
[30]
The Harm Occasioned by the Commission of the Dam Use and Construction Offences
The parties agreed that the commission of the dam offences only occasioned minor harm to the regulatory scheme in that the offending conduct had a low impact on the consistent administration of the water supply works approval scheme under the WMA. I accept this submission.
[31]
The Harm Occasioned by the Commission of the Meter Offences
However, this is not the case in relation to the extent of harm caused by the commission of the meter offences.
The prosecutor submitted that the meter recorded approximately half of the actual volume of water taken from the water source during the commission of both meter offences, and therefore, occasioned substantial harm to the integrity of the WMA and the consistent administration of that regulatory scheme.
As stated above, Payson submitted that the Court would not be satisfied beyond reasonable doubt that the meter recorded half the actual volume of water taken during the offending periods. Rather, the Court would sentence Payson on the basis that the under-recording was less than that asserted by the prosecutor and was otherwise unknown (citing Weininger v The Queen [2003] HCA 14; (2003) 212 CLR 629 at [19]-[22]). This submission is difficult to understand in light of Payson's concessions that the meter was under-recording by a factor of 1.8 and that the commission of the meter offences occasioned harm to the regulatory scheme. It is rejected.
[32]
The Evidence of Dr Meyer
In relation to the harm caused by the commission of the meter offences, the prosecutor relied upon the expert evidence of Dr Meyer, who provided his opinion of the growth, possible water use, and yield of cotton grown on Binneguy Station during the 2016/2017 and 2017/2018 cotton seasons. Dr Meyer is an Adjunct Professor of Natural Resource Science at the University of Adelaide and the School of Biological Science, a fellow of the Australian Institute of Agricultural Science and Technology and holds a doctorate in Water Uptake of Plant Root Systems.
In the Meyer report, Dr Meyer explained that he had calculated the water required for the crop at Binneguy Station based on a comparison of weekly satellite images known as "NDVI" of Binneguy Station in order to ascertain:
1. the sowing date of the crop;
2. the hectare size of the crop; and
3. the crop coefficient.
Dr Meyer also relied upon records of rainfall and the daily evapotranspiration from weather stations at Moree airport and Moree post office.
During the hearing, Dr Meyer was asked by the prosecutor to provide updated estimates of the water required to sustain the 2016/2017 and 2017/2018 cotton crop at Binneguy Station based on:
1. a revised sowing date of 23 October 2016 with respect to the 2016/2017 cotton crop; and
2. a revised total rainfall of 277.5 ML for the 2016/2017 cotton crop and 343 ML for the 2017/2018 cotton crop.
He concluded that Binneguy Station required 1,268 ML during the 2016/2017 cotton season to sustain the cotton crop (T150:36) and 2,012 ML to sustain the 2017/2018 cotton crop (T191:20).
Dr Meyer acknowledged in his oral evidence that his opinions in the Meyer report were based on several incorrect assumptions including:
1. that the size of the field for the cotton crop was 151 ha and not 147 ha (T161:03-06). However, he opined that this difference would only make a "slight difference" to his calculations (T183:03-05); and
2. that water use productivity was 70%. That is, only 70% of the water on a farm flowed to the crop due to losses from evaporation, surface drainage and seepage. This figure was obtained from a study reviewing water use productivity of Australian cotton growers published in 2013 (T165:07-166:49).
Furthermore, in response to questions about the climatic and weather conditions at Moree airport and post office, he stated (T153:08-44):
Q. But you also used the general weather data from those two locations, is that correct?
A. That's correct.
Q. You agree that those two locations are built up areas?
A. The airport is, is, is a very exposed site. The post office would be a more built up area, yes.
Q. But the airport also includes large areas of tarmac, do you agree with that?
A. It'll, it'll have a proportion of tarmac area, yes.
Q. There's significantly less vegetation in those two areas than there is at Binneguy Station, do you agree?
A. That's correct.
Q. There are more roads that are covered in tarmac, do you agree?
A. There will be, yes.
Q. Unlike Binneguy Station, those two locations are not on a major watercourse, do you agree?
A. That's true.
Q. They are further west than Binneguy Station, do you agree?
A. That's correct.
Q. These factors, location, building density, roads, and vegetation, and I think the fifth one was the presence or the absence of a watercourse might cause differences in climate between Binneguy Station and Moree, do you agree with that?
A. There will be almost certainly - there'll be some difference..(not transcribable)..which is true no matter where you go across the landscape, those differences. But the - it needs to be borne in mind that the - those values of meteorological values are generated by a very large atmospheric - a very large atmosphere, effectively. And so the small differences that'll occur just from immediate site to immediate site are relatively small compared to the big drivers of evaporation which are common across relatively large distances across the landscape.
[33]
The Evidence of Wheildon on Environmental Harm
Wheildon attested to the fact that he had over a decade of experience as an irrigated cotton farmer prior to his employment by Payson (T48:24-26). He deposed to the operation of the water management system on Binneguy Station as follows:
25. Every time I pump from the river, I would take the meter reading before pumping. I would calculate how long I had to leave the pump going to get the water I ordered three days earlier. I would then return to the pump at the calculated time and turn it off. At this time I would also take the meter reading again in order to calculate the amount of water taken. I would then enter this information into the online was recording system which is run by Water NSW. They then use this information to charge the licence holder for the water taken and to monitor the orders and pumping.
26. The motor on the river pump did not have an hour meter or a tacho that worked. However, I would run the motor at approximately 1,700 to 1,800 revs whilst operating it. Although there was no tacho on it to display the revs whilst operating, I knew from experience that this particular motor peaked out approximately 2,100 revs. I would rev it up till it hit the limiter and then back it off to an estimated 1,700 revs.
It was Wheildon's evidence that the water management system at Binneguy Station was an efficient one. The dams were located in close proximity to the irrigated fields and that the channels conveying water were deep and narrow to minimise evaporation and water loss (T50:22-50). This led Wheildon to conclude that (T51:47-49):
Q. So you think you might be losing less than 20% to seepage and evaporation?
A. Yeah, maybe.
[34]
Findings on the Environmental Harm Occasioned by the Commission of the Meter Offences
Having regard to the evidence, I find that the commission of the meter offences occasioned substantial harm to the integrity and consistent administration of the water management scheme in NSW. This is because I find beyond reasonable doubt that Payson took at least 1.8 times the water that was metered during the offending period:
1. both Wheildon and Barne were consistent in their evidence that the meter was under-recording by a factor of approximately 1.8 during the offence periods;
2. the decision to plant 250 ha of irrigated cotton crop in the 2017/2018 cotton season was based upon this knowledge and Payson harvested a successful crop in that year; and
3. the Meyer report indicates that about double the water than that recorded by the meter was needed to sustain the crops during the 2016/2017 and 2017/2018 cotton seasons. Although Payson's submission that Dr Meyer relied upon a number of incorrect parameters and did not account for several water sources is not without force, as the evidence demonstrates, these factors are not sufficient to undermine Dr Myer's conclusion that the meter was under-recording by almost half. Whether Dr Meyer's figures are accurate to the exact megalitre does not derogate from his ultimate opinion that the crop at Binneguy Station required an excess of 1,000 ML and 1,750 ML in the 2016/2017 and 2017/2018 cotton seasons, respectively. These amounts are at least 1.8 times than what was recorded by Payson's meter during those periods.
The statutory requirement for water users to accurately meter their water is to preserve the integrity and sustainability of the water sharing scheme enshrined by the WMA and 2016 WSP. Accurate metering information ensures that the regulator is able to set appropriate limits on the amount of water able to be extracted and to properly charge water users for that extraction. Payson's commission of the meter offences undermined the objects of the statutory scheme to a significant extent.
I therefore find that Payson knowingly took water while the meter was under-recording by a factor of at least 1.8.
This erosion of efficient administration significantly elevates the harm to the regulatory regime.
[35]
Maximum Penalty
The maximum penalty provided for an offence indicates the seriousness with which Parliament views its commission (Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698E and Rawson at [57]). It also provides a sentencing yardstick for the case before the Court (Markarian at [31] and Elias v The Queen [2013] HCA 31; (2013) 248 CLR 483 at [27]).
The meter offences are categorised as Tier 1 offences and carry a maximum penalty of $2,200,000 for corporations for each offence.
The dam construction and use offences are Tier 2 offences and carry a maximum penalty of $1,100,000 for corporations for each offence.
In both instances the maximum penalties reflect the opprobrium with which Parliament views offenses of this nature.
[36]
Reasonable Foreseeability of the Harm Caused or Likely to be Caused to the Environment by the Commission of the Offences
In light of my findings that Payson knowingly took water while the meter was under-recording by at least a factor of 1.8, there can be no doubt whatsoever that it was reasonably foreseeable that by deliberately taking water without a properly operating meter Payson would undermine the water management regime established under the WMA (s 364A(1)(e) of the WMA).
With respect to the dam use and construction offences, it was also reasonably foreseeable that constructing a water supply work without obtaining the necessary approval would likewise occasion harm to the regulatory scheme that governs how users access and store water in the State (s 364A(1)(e) of the WMA).
[37]
Control Over the Causes of the Commission of the Offences
The prosecutor contended that at all material times Payson was in control of the causes that gave rise to the commission of the four offences. Barne was involved in the operations at Binneguy Station. Upon becoming aware that the meter was under-recording, Barne elected not to correct the under-recording. On the contrary, he instructed Wheildon to continue using the meter knowing that it was not operating properly.
The prosecutor submitted that although Wheildon knew more about cotton farming than Barne, this did not derogate from the fact that Payson was Wheildon's employer (T121:20-24). Barne's explanation that his inexperience meant that he was "working for Mr Wheildon, if you will, as an employee" was unconvincing (T240:22-24). As Barne ultimately accepted, he would instruct Wheildon when he felt it necessary to do so (T240:26-47).
Payson therefore conceded that it had control over the causes that gave rise to the commission of the offences (s 364A(1)(f) of the WMA). Nonetheless, Payson submitted that its culpability was reduced by Barne's inexperience and reliance on others, namely, Wheildon.
According to Barne, although Payson was Wheildon's employer, the relationship between Wheildon and Barne was unconventional (T121:20-27, T240:20-47 and T352:36) and his inexperience contributed to his decision to "do nothing" (T304:31) when faced with the issue of the meter under-recording. He was heavily reliant on Wheildon for advice and to perform materially important tasks including water management of the irrigated crops. He was also reliant on others for guidance, including his father, Dick Eston, and Taunton, especially in 2016 when he was new at Binneguy Station (T361:15-22). This was consistent with the fact that the working relationship between Barne and Wheildon was generally amicable throughout Wheildon's tenure at Binneguy Station and as the email and text communications between the two demonstrated.
I am nevertheless satisfied beyond reasonable doubt that Barne was materially involved in the management of Binneguy Station and had complete control over the causes of the commission of all four offences because:
1. both Barne and Wheildon's evidence disclosed that Barne made key business decisions in the running of Binneguy Station. For example, the decision to construct dam 2 and to plant 250 ha of irrigated cotton crop in the 2017/2018 cotton season;
2. Barne was solely in control of the financial aspects of Payson, including loan arrangements with the National Australia Bank and the brokerage of the sale of Payson's cotton crop. Barne understood the operation of Binneguy Station sufficiently to conduct these financial affairs;
3. specific incidents during the offending period were also consistent with Barne being involved in the management of the farming business. For example, as found above, Barne directed Wheildon to fabricate a water budget;
4. Barne admitted that ultimately it was he who directed Wheildon's work flow and had control over Wheildon's scope and conditions of employment;
5. although Wheildon was mentoring him in respect of farming operations, Barne ultimately told Wheildon what to do (T240:26-40); and
6. Barne instructed Wheildon to reinstate the Doppler sensor in the incorrect position.
[38]
Practical Measures Which Could Have Been Taken to Prevent or Mitigate the Environmental Harm
There were practical measures that Payson could have taken to prevent, control, abate or mitigate the environmental harm (s 364A(1)(d) of the WMA and Barlow at [45]). For example:
1. not taking water while it knew that the meter was not operating properly;
2. correcting the position of the Doppler sensor, especially once Payson acquired knowledge that the positioning of the sensor was the likely cause of the meter under-recording;
3. not instructing Wheildon to put the Doppler sensor back in its original incorrect position;
4. not fabricating a false water budget to hide the under-recording; and
5. checking whether approval was needed to construct and use dam 2.
[39]
Whether the Commission of the Offences Occurred During a Severe Water Shortage or Extreme Heat Event
There was no evidence that the commission of the offences occurred during a severe water shortage or extreme heat event (s 364A(1)(g) of the WMA).
[40]
Payson's Reasons for Committing the Offences
Section 364A(1)(h) of the WMA requires the Court to consider Payson's reasons for committing the offences. The criminality involved in the commission of the offences by a defendant is measured not only by the seriousness of what actually occurred but also by reference to the reasons for its occurrence (Axer Pty Ltd v Environment Protection Authority (1993) 113 LGERA 357 at 366 and Bentley at [237]).
The prosecutor submitted that the meter offences were committed by Payson for financial gain, which is an aggravating factor pursuant to s 21A(2)(o) of the CSPA. That is, Payson knowingly took unmetered water and in doing so made a financial gain by the savings it accrued for paying a lower price for the water taken during the offending period and by producing a larger cotton crop. There was no other rational motive for the offending conduct other than pecuniary.
Payson conceded that the metering offences were only in part financially motivated. Payson argued that the meter offences were primarily committed because of Barne's anxiety and poor judgment.
Payson tendered evidence of Barne's mental state, namely, a psychological report prepared by Dr Emma Collins, dated 17 May 2022 ("the Collins report"). The Collins report opined that:
37. Mr. Barne experienced a difficult upbringing that was characterised by a lack of emotional support and critical and overbearing parenting styles. He was sent to boarding school from a young age, which further destabilised the bond with his parents, and particularly his father. Mr. Barne described ongoing control and criticism throughout his schooling that appears to have led to irritability often associated with childhood depression. He has experienced episodes of both depression and anxiety thereafter in response to a range of stressors, triggered by incidents where he feels he will be negatively judged, criticised or rejected by others. The constellation of that symptomology vacillated between adjustment mixed mood and major depressive episodes.
38. Mr. Barne took over Binneguy Station in 2015 when asked by his father at a time of significant psychological fragility for him. Although his mental health improved briefly, the discordance in his relationship with his farm manager from 2016 negatively affected his mood at that time. His mood persistently worsened, with his symptoms in 2018 consistent with a major, recurring depressive episode with suicidal ideation. It is my opinion that there is a link between Mr. Barne's vacillating mental state and failure to make decisions that ultimately led to the current offences.
[41]
The Impact of the Commission of the Offences on Other Persons' Rights Under the WMA
There was no evidence before the Court regarding the impact of the commission of the offences on other persons' rights under the WMA (pursuant to s 364A(1)(a) of that Act).
[42]
The Market Value of Any Water That Has Been Lost, Misused or Unlawfully Taken as a Consequence of the Commission of the Offences
The market value of any water lost, misused or unlawfully taken as a consequence of the commission of the offences is a relevant consideration (s 364A(1)(b) of the WMA). The prosecutor relied upon the evidence of Murray, who deposed to the fact that the weighted average price of water from the water source during the offending period was $238 per ML in the 2016/2017 cotton season and $368 per ML in the 2017/2018 cotton season.
Payson submitted that the market value of the water unlawfully taken was unknown because the quantity of the additional water extracted from the river was unknown.
While the Court has found beyond reasonable doubt that Payson unlawfully took 1.8 times the amount of water it was allocated under its licence during the commission of the meter offences, this is not sufficiently precise to determine the market value of any water unlawfully taken beyond reasonable doubt. The prosecutor did not, for example, tender evidence of the trading price of water during each of the periods that Payson took water without a properly functioning meter.
By contrast, the Court was able to determine the market value of the water taken during the commission of the offence in Harrison v Harris [2013] NSWLEC 105 because it was provided with the temporary trading prices of water at the time of the offending conduct (at [132].
For these reasons, the Court does not have regard to this factor.
[43]
Payson Was Not Complying With the Orders of an Employer or Supervisor
Neither Payson nor its controlling mind, Barne, were complying with the orders of an employer or supervisor (s 364A(1)(i) of the WMA).
[44]
The Water Taken Was Not for Environmental Purposes
The water taken as a result of the commission of the meter offence was not for environmental purposes (s 364A(1)(j) of the WMA).
[45]
No Other Civil Penalty for the Offending Conduct Has Been Imposed
No civil penalty for its offending conduct the subject of this proceedings has been imposed (s 364A(1)(k) of the WMA).
[46]
The Meter Offences Involved a Series of Criminal Acts
The prosecutor submitted that an aggravating circumstance of each of the meter offences was that they involved a series of criminal acts (comprising several pumping events) during the offending periods pursuant to s 21A(2)(m) of the CSPA.
In R v Tadrosse [2005] NSWCCA 145; (2005) 65 NSWLR 740 Howie J explained the application of s 21A(2)(m) of the CSPA as follows (at [29], cited with approval in Environment Protection Authority v Hanna [2018] NSWLEC 80; (2018) 235 LGERA 114 at [150]):
29 Clearly the aggravating factor in s 21A(2)(m) is concerned with the situation where a single offence contains a number of allegations of criminal acts that are part and parcel of a single course of criminal conduct. A charge of this nature will be frequently found in cases of fraud or dishonesty perpetrated against a single victim such as a charge of embezzlement or larceny as a servant. It is also common to charge multiple instances of supplying drugs over a lengthy period of time as one offence under s 25 of the Drug Misuse and Trafficking Act 1985. Of course there are offences that have, as an element of the offence, multiple acts of criminality, such as an offence of ongoing drug supply under s 25A of the Drug Misuse and Trafficking Act or an offence of persistent sexual abuse of a child under s 66EA of the Crimes Act. When sentencing for such an offence, the court must bear in mind the prohibition against taking into account as a matter of aggravation that which is an element of the offence charged.
By contrast, in Hanna Preston J found that s 21A(2)(m) of the CSPA was not engaged with respect to an offender charged with five counts against s 144AB(2) of the Protection of the Environment Operations Act 1997 because (at [150]):
150 I do not consider that the aggravating factor in s 21A(2)(m) is engaged. The factor in s 21A(2)(m) "is concerned with the situation where a single offence contains a number of allegations of criminal acts that are part and parcel of a single course of criminal conduct": R v Tadrosse at [29]. In Mr Hanna's case, he is charged with multiple offences (eight charges but he has pleaded guilty to five charges) and they indicate that there are multiple victims (including the owners and occupiers of the four properties at which Mr Hanna deposited waste) and a series of criminal acts (the multiple acts of transporting and depositing waste at the four properties). However, Mr Hanna is to be sentenced for each of the offences to which he has pleaded guilty and the fact that there are multiple victims and multiple acts of criminality will be addressed by the sentences to be imposed for each of those offences, in accordance with the principle of totality. In these circumstances, "it is illogical to take into account, where there are multiple offences charged, that it is an aggravating factor relevant to each offence that there is a series of criminal acts disclosed by the offences before the court": R v Tadrosse at [28].
[47]
The Meter Offences Did Not Form Part of a Planned Criminal Activity
The prosecutor further contended that each of the meter offences formed part of a planned criminal activity (s 21A(2)(n) of the CSPA).
An offence against s 91I(1) of the WMA may be committed without any preparation or organisation, and therefore, a degree of planning is not an inherent characteristic of the offence and may be taken into account as an aggravating factor (R v Yildez [2006] NSWCCA 97; (2006) 160 A Crim R 218 at [37]). The prosecutor submitted that the meter offences were carried out over a long period of time, involved systems of operation and planning, and were repeated thereby making it appropriate to characterise those offences as organised criminal activity (citing Yildez at [37] and NCR Australia v Credit Connection [2005] NSWSC 1118 at [76]).
In particular, Payson knew prior to the start of the 2016/2017 cotton season that the meter was under-recording. This gave Payson time to reflect on its offending conduct (citing Environment Protection Authority v McMullen [2020] NSWLEC 87 at [121]). In relation to the commission of the first meter offence, the prosecutor relied upon Barne's comment to Wheildon that "if we fix the meter it will all of a sudden show that we are ordering twice as much water compared to the past couple of years and put us at risk of being busted".
With respect to the commission of the second meter offence, the prosecutor submitted that Payson was aware that the meter was under-recording prior to the 2017/2018 cotton season and planted a 250 ha irrigated crop on the basis that at least 1.8 times more water would be extracted from the river than that recorded by the meter. A large portion of that crop was sold shortly after planting, with Payson using a fabricated water budget in its dealings with its agronomist and cotton broker.
That the offending conduct was carried out by one person, Barne, does not prevent Payson's conduct being characterised as organised criminal activity (citing Hewitt v R (2007) 180 A Crim R 306 at [25]).
In response, Payson submitted that it was not enough that an offence was simply planned (citing Fahs v R (2007) NSWCCA 26 at [21]) to fall within the ambit of s 21A(2)(n) of the CSPA. The offending conduct must be an extensive criminal undertaking (Williams v R [2010] NSWCCA 15 at [19]-[20]). The fact that the meter offences were charged as rolled-up offences, involving a number of occasions when water was pumped while the meter was under-recording, does not necessarily mean that there was the necessary degree of planning (RL v R [2015] NSWCCA 106 at [37]).
[48]
Conclusion on the Objective Seriousness of the Offences
The prosecutor contended that each of the meter offences were objectively very serious for the following reasons:
1. the conduct offended against the objectives of the WMA and harmed the regulatory scheme in a fundamental respect;
2. the actual knowledge of Payson that the metering equipment was not working properly tended towards a higher degree of culpability;
3. each of the meter offences involved a series of planned criminal acts comprising of several pumping events and forming part of an organised criminal enterprise;
4. the meter offences resulted in a deception on the regulator; and
5. the meter offences were motivated by financial gain.
Payson replied as follows:
1. in respect of the first meter offence:
1. the offence occurred over a period of six months;
2. during that period water was pumped and metered on 12 separate occasions;
3. although more than the recorded extraction of 485.28 ML of water was pumped, the volume of additional water could not be established beyond reasonable doubt;
4. the offence was not the product of meter tampering by Payson; and
5. the offence was opportunistic rather than planned;
1. in relation to the second meter offence:
1. the offending conduct occurred over less than three months;
2. during that time water was pumped on 27 separate occasions;
3. the meter recorded an extraction of 847.35 ML of water, and although more water was extracted than that recorded, the amount of additional water taken was unknown; and
4. the offence was not the product of meter tampering.
Payson submitted that the dam construction and use offences were less serious and emphasised that:
1. dam 2 was only used on one occasion to store water extracted from the water source and only following a high flow event, otherwise it stored rainfall and runoff from the irrigated fields; and
2. dam 2 has a capacity of approximately 610 ML.
The prosecutor did not cavil with this submission.
Taking into account all of the objective circumstances of the commission of the meter offences, I consider that the commission of both meter offences to be towards the upper end of objective seriousness for offences of this kind. Moreover, I find that the second meter offence to be more objectively serious than the commission of the first meter offence.
I find that the dam use and the dam construction offences are at the lower end of objective seriousness.
[49]
Subjective Circumstances of Payson
A proportionate sentence requires the Court to take into account any mitigating factors that are personal to Payson (s 21A(3) of the CSPA). Relevant subjective circumstances in these proceedings include:
1. whether Payson has demonstrated remorse for the commission of the offences (s 21A(3)(i) of the CSPA and see the remarks by Preston J in Waste Recycling at [203]-[215]);
2. whether, and when, Payson entered a guilty plea (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152]-[155]);
3. whether Payson provided assistance to the regulatory authorities in the investigation and prosecution of the offences (ss 21A(3)(m) and 23 of the CSPA);
4. whether Payson is of good corporate character (s 21A(3)(f) of the CSPA);
5. whether Payson has a prior criminal record (s 21A(3)(e) of the CSPA); and
6. whether Payson is likely to reoffend and its prospects of rehabilitation (s 21A(3)(g) and (h) of the CSPA).
[50]
Early Pleas of Guilty
A guilty plea entered at the earliest available opportunity entitles a defendant to the full 25% discount for the utilitarian value of that early plea (ss 21A(3)(k) and 22 of the CSPA and R v Thomson; R v Houlton at [160]). What is regarded as an early plea will vary in the circumstances of the case (R v Thomson; R v Houlton at [160(iii)]).
Payson first instructed its legal representatives to contact the prosecutor regarding a plea deal in March 2022 and a letter was sent to the prosecutor with Payson offering to plead guilty to some of the charges against it. The prosecutor responded in writing on 31 March 2022 and negotiations continued until 14 April 2022.
Payson communicated its intention to plead guilty to the four offences on 14 April 2022, the last working day before the hearing on liability commenced. Payson submitted that nonetheless it was entitled to a discount of at least 10-15% for the utilitarian value of those guilty pleas because:
1. negotiations in respect of the plea for its offending conduct were initiated by Payson in August 2021, but it did not receive any response from the prosecutor until sometime later;
2. the pleas of guilty spared the community and the Court the time and expense of a three week trial that would have involved the disposition of 82 charges; and
3. a lengthy trial was avoided during a period when the Court remained impacted by the Covid-19 pandemic.
Payson submitted that, although delay in entering a guilty plea will usually detract from its utilitarian value, the discount to be awarded is nonetheless discretionary and circumstances may exist impacting upon the determination of the appropriate discount to be applied (relying upon Tazelear v R [2009] NSWCCA 119 at [23]-[25] and R v Zeilaa [2009] NSWSC 532 at [18]). Barne's impaired mental state and location in the United States were such circumstances and the Court should exercise its discretion to only slightly decrease the available discount.
There was some evidence before the Court that discussions took place between the parties prior to the pleas being entered. However, that evidence is inconclusive, even on the balance of probabilities, and in any event, there was nothing preventing Payson from entering earlier pleas of guilty irrespective of any plea bargain process. The negotiation does not derogate from the fact that Payson entered its pleas of guilty at a very late stage in the criminal proceedings thereby reducing their utilitarian value.
[51]
Assistance to the Prosecutor
Payson provided assistance to the prosecutor in the investigation and prosecution of the offences (ss 21A(3)(m) and 23 of the CSPA) by participating in the preparation of an agreed statement of facts for the hearing thereby reducing the duration of the sentence hearing.
However, at the sentence hearing Payson put the prosecutor to proof on a number of factual issues requiring considerable evidence to be tendered and witnesses to be cross-examined.
Therefore, while Payson has provided some assistance to the prosecutor in its investigation of the offences, this factor in mitigation cannot be afforded full weight.
[52]
Antecedents
Payson has no prior convictions (s 21A(3)(e) of the CSPA).
[53]
Contrition and Remorse
Pursuant to s 21A(3)(i) of the CSPA, remorse will only be a mitigating factor 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),
In Waste Recycling Preston J remarked that "contrition and remorse will be more readily shown by the offender taking actions, rather than offering smooth apologies through their legal representatives" (at [203]). His Honour went on to summarise four ways by which an offender may demonstrate genuine contrition and remorse:
1. the efficiency of action rectifying the harm caused or likely to be caused by the commission of the offences (at [204]);
2. the voluntary reporting of the commission of the offences and any consequential environmental harm to the authorities (at [210]);
3. the measures taken to address the causes of the commission of the offences to prevent their occurrence in the future (at [212]); and
4. the personal appearance of corporate executives in court to give evidence of the defendant's regret and a plan of action to avoid the repetition of the offences (at [214]).
In an affidavit affirmed on 17 May 2022, Barne deposed to Payson's remorse in the following way:
38. With the benefit of legal advice, I accept that I should have caused Henry Payson to obtain an approval before Dam 2 was constructed or used. I regret not doing this and I apologise to the Court for not doing so.
…
58. After Mr Wheildon told me that he believed the meter was under-recording, I did not take steps to have it checked and neither did Mr Wheildon. He did not explain to me the gravity of the situation in respect of a meter that was under-recording, nor did he suggest a course of action to rectify the problem. I sincerely regret not getting the meter checked for accuracy at the time. I accept that was the wrong judgment call to make. I humbly apologise to the Court for not doing something about the meter when the issue was first brought to my attention.
He further expressed regret and contrition on behalf of Payson by stating:
116. I appreciate that the purpose of the management of water from Copeton Dam is to ensure there is enough water to go around for everyone, including for stock and domestic use during droughts. These proceedings have highlighted for me the need to be a responsible custodian of this natural resource. A critical part of being a responsible custodian is that we all follow the rules and respect the pumping allocation and pumping limits imposed on us by NSW Water. I now fully realise and accept that the water resource cannot be managed if there is non-compliance.
…
118. Binneguy Station has now been held in my family for about 40 years. In accordance with my family's strong farming tradition, I see myself as a custodian of the land, honouring past generations, and preserving the land for future generations. That I have sullied this ideal by not addressing the water meter problem and constructing the new surge without proper approval is abhorrent to me, and something for which I am embarrassed, ashamed and very sorry.
[54]
The Good Character of Payson
Payson filed seven character references attesting to Barne's good character from:
1. Matthew Durack, dated 16 May 2022;
2. Richard Estens AO, dated 16 May 2022, who has also known Barne since he was a child;
3. Mark Greer, dated 16 May 2022;
4. Alexandra Makim, filed on 18 May 2022;
5. Peter Johnson, dated 22 April 2022;
6. Hugh Livingston, dated 17 May 2022; and
7. Peter Birch, dated 16 May 2022.
The character references described Barne as a responsible, decent and trustworthy individual. They reiterated his contrition for Payson's actions and his commitment to preventing future offending conduct.
The prosecutor contended that because Payson was incorporated in late 2015, for the duration of its corporate life it was engaged in criminal conduct, and therefore, was not of good character.
That Payson committed the offences shortly after its incorporation is, without more, not sufficient to deny its good character. There is no evidence before the Court that Payson has repeatedly offended over a long period of time, or that its offending conduct is of the kind that is frequently committed by persons of good character (cf R v Gent [2005] NSWCCA 370; (2005) 162 A Crim R 29 at [51]-[61]).
I find that but for the commission of the offences, Payson to be of good corporate character (s 21A(3)(f) of the CSPA).
[55]
The Likelihood of Payson Reoffending and Prospects of Rehabilitation
Because Payson is of good character, has demonstrated a degree of contrition and remorse, has complied with subsequent stop work orders by the prosecutor, and has put measures in place to prevent similar future offending, including the installation of a new meter, I find the likelihood that Payson will reoffend to be very low and that its prospects of rehabilitation are very good (s 21A(3)(g) and (h) of the CSPA).
[56]
The Offences Could Have Been Prosecuted in the Local Court
I have taken into account the fact that the offences could have been prosecuted in the Local Court (s 364 of the WMA and Harris v Harrison [2014] NSWCCA 84; (2014) 86 NSWLR 422 at [92]-[93] and R v Doan [2000] NSWCCA 317; (2000) 50 NSWLR 115).
[57]
Deterrence, Denunciation and Retribution
The Court is required to take into account both specific and general deterrence in the determination of an appropriate sentence (Walden v Hensler [1987] HCA 54; (1987) 163 CLR 561 at 569-570 per Brennan J).
The penalty imposed by the Court must serve as a general deterrent (Axer at 359; Camilleri's Stock Feeds at 701 and Bentley at [139] and see s 3A(b) of the CSPA). In Environment Protection Authority v Ballina Shire Council [2006] NSWLEC 289; (2006) 148 LGERA 278, Preston J discussed general deterrence in the context of sentencing for environmental crime (at [66]-[68]). Those principles are applied here without repetition.
The Court accepts that embedded in the determination of the appropriate sentence to be imposed on Payson is an element of general deterrence to ensure that cotton farmers and WAL holders comply with the requirements of the WMA, and their associated licences and approvals, when taking water and constructing water supply works.
In relation to specific deterrence (s 3A(b) of the CSPA), the prosecutor submitted that the sentence to be imposed in respect of the meter offences should serve as a significant specific deterrent to Payson. This is because the offences could be characterised as crimes of dishonesty. In addition, Payson remained in the agricultural business at Binneguy Station and continued to extract water from the water source. Even after the regulator had commenced its investigation into Payson, and had issued a direction to it to install and maintain metering equipment, Payson sold water on 25 January 2019, which was a carried over allocation it obtained by its deception during the 2017/18 cotton season.
The prosecutor further contended that the need for specific deterrence in relation to the meter offences was demonstrated by Payson's refusal to accept responsibility for the degree to which it understated the volume of water it was taking and its knowledge of the extent of that under-recording.
In response, Payson submitted that in light of its good character, its remorse and its low likelihood of reoffending, specific deterrence should be given limited weight. Furthermore, Barne's mental state during the commission of the offences means that less weight should be afforded to deterrence, retribution and denunciation (citing Director of Public Prosecutions (Cth) v De La Rosa [2010] NSWCCA 194; (2010) 79 NSWLR 1 at [177]).
[58]
The Totality Principle
The totality principle is a relevant consideration when determining an aggregate penalty in sentencing for multiple offences (Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 at 62-63; Pearce v The Queen [1998] HCA 57; (1998) 194 CLR 610 at [40]; Johnson v The Queen [2004] HCA 15; (2004) 78 ALJR 616 at [18] and Barlow at [111]-[112]).
Because there are multiple offences arising out of the same, common, or related conduct, the totality principle applies in the present set of proceedings. The application of the totality principle requires the Court to review the totality of the sentence and to consider whether the penalty imposed is just and appropriate and reflects the overall criminality of the offender before the Court.
Care must nevertheless be taken "to ensure that any adjustment of individual sentences does not cause the aggregate sentence not to reflect the total criminality of the offender's conduct or the sentence for any individual offence to become disproportionate to the objective gravity of that offence" (Rawson at [222]; Gittany at [199] and [201]; R v Harris [2007] NSWCCA 130; (2007) 171 A Crim R 267 at [45]-[46] and R v Wheeler [2000] NSWCCA 34 at [36]-[37]). The Court discussed the totality principle and its application at length in Orica (at [224]-[229]).
The Court discussed the totality principle and its application at length in Orica (at [224] to [229]). More recently, see the examination and application of the principle in Barlow (at [111] to [112]).
Applying, without repetition, those authorities to the present proceedings, I find that the totality principle applies separately to the two meter offences, having regard to the commonality of fact, timing and location of the conduct giving rise to those contraventions, and again separately to the dam use and dam construction offences (Orica at [248]).
[59]
Consistency in Sentencing
The task of the sentencing court is to seek even-handedness in the imposition of a sentence (R v Oliver (1980) 7 A Crim R 174 at 177 and R v Visconti [1982] 2 NSWLR 104 at 107). However, care must be taken in achieving consistency. There is always difficulty comparing the penalty in one case with that in another because of the wide divergence of facts and circumstances in each case (Axer at 365). The sentence imposed in a single case does not demonstrate the limits of a sentencing court's discretion (Cabonne Shire Council v Environment Protection Authority [2001] NSWCCA 280; (2001) 115 LGERA 304 at [312] and Environment Protection Authority v Barnes [2006] NSWCCA 246 at [79]).
The prosecutor submitted that there is no identifiable pattern for sentencing for offences against ss 91I(1)(b) or 91B(1) of the WMA and that there are no previous decisions of the Court that have sufficient factual similarity to provide the Court with any meaningful assistance in the present proceedings.
Nonetheless, the Court has had regard to four particular cases. The Court has exercised caution when considering these cases as they involved different offences under the WMA (Environment Protection Authority v Ditchfield Contracting Pty Ltd [2018] NSWLEC 90 at [70]). The cases are summarised below:
1. in Thompson, the defendant was sentenced for two offences against ss 60A(4) and 91I(2) of the WMA: first, for taking water otherwise than as authorised by his WAL; and second, for taking water without an operating water meter. A further offence was taken into account through a Form 1 pursuant to s 32 of the CSPA. The commission of the offences caused actual harm by undermining the consistent administration of the WMA. There was insufficient evidence to find that Thompson had committed the offences recklessly. Both offences were held in the low range of objective seriousness for offences of that kind. Mitigating factors included the fact that Thompson had demonstrated genuine remorse, had provided assistance to the regulatory authorities, had no prior criminal record and had good prospects of rehabilitation. The Court held that Thompson had pleaded guilty at the earliest opportunity and was entitled to the full 25% discount. Thompson was fined $57,500 for both offences and ordered to pay half of the penalty to the prosecutor. The Court also made a publication order and ordered Thompson to pay the prosecutor's costs;
2. the defendant was charged with two offences against s 91I(2) and one offence against s 336C(1) of the WMA in Barlow. The former offences involved taking water by means of a metered work when metering equipment was not operating properly and the latter offence involved failing to comply with a direction given under Pt 1 of Ch 7 of the WMA. Barlow ultimately pleaded guilty to the charges on the first day of the trial. As a result, he was afforded a 12.5% discount for the utilitarian value of his plea. His offending conduct was considered to be contrary to the objects of the WMA, including the principles of ecologically sustainable development. The Court held that he had committed the s 336C(1) offence recklessly and that the agricultural activities for which water was taken were for the benefit of Barlow's business. Barlow did not have any prior convictions for any environmental offences and was otherwise of good character. He demonstrated remorse, accepted responsibility for his actions, and endeavoured to make reparation for the harm occasioned by the offending conduct. The objective seriousness of the s 91I(2) offences was considered to be in the mid-range but was low for the s 336C(1) offence. Barlow was fined $48,726, $54,140 and $86,625, respectively, for each offence. He was also ordered to pay costs;
3. Budvalt concerned a contravention of s 91B(1) of the WMA by Budvalt Pty Ltd ("Budvalt"). Budvalt constructed and used a channel to convey water from the Macquarie River for irrigation purposes without approval to do so. Budvalt pleaded guilty on the first day of the trial attracting a discount of 10%. Budvalt had no prior convictions. Although Budvalt was considered to be of good character because it had contributed to the cotton-growing industry, Moore J afforded this fact only modest weight because there was evidence that the activities of the company contained an element of corporate self-interest and were motivated by commercial benefit. Budvalt showed no sorrow or remorse. Budvalt was fined $252,000, with a moiety of 50% to be paid to the prosecutor. A publication order was made; and
4. Natural Resources Access Regulator v Bao Lin Pty Ltd [2022] NSWLEC 42 concerned the sentencing of a corporation for four offences against ss 91E(1) and 345(2) of the WMA insofar as the defendant carried out a controlled activity on waterfront land without an approval and harmed waterfront land by constructing an unauthorised dam. The Court held that each of the offences were in the moderate range of objective seriousness because they were, or were likely to have caused, harm to the environment, including to aquatic species. However, the offending conduct was committed unintentionally by workers that were not aware of the legal requirements under the WMA. Mitigating factors included that the defendant had no prior convictions, had pleaded guilty early and had assisted the authorities. The company also demonstrated remorse and took responsibility for its offending conduct. In all of the circumstances, the Court imposed a total fine of $250,800 and ordered that the defendant undertake steps to prevent, control, abate and mitigate the harm caused by the commission of the offences.
[60]
Capacity to Pay a Fine
Section 6 of the Fines Act 1996 provides that:
6 Consideration of accused's means to pay
In the exercise by a court of a discretion to fix the amount of any fine, the court is required to consider--
(a) such information regarding the means of the accused as is reasonably and practicably available to the court for consideration, and
(b) such other matters as, in the opinion of the court, are relevant to the fixing of that amount.
The offender's capacity to pay is one of many factors that the Court must consider. In Environment Protection Authority v Hanna [2018] NSWLEC 80, Preston J stated (at [267]):
267 However, whilst the means of an offender to pay any fine is a mandatory consideration, it may not be decisive. Other sentencing considerations, such as achieving general deterrence, may justify imposing a fine in a certain amount, even if the offender is unlikely to be able to pay the fine: Smith v The Queen at 23, 24; Darter v Diden (2006) 94 SASR 505; [2006] SASC 152 at [29]-[32]; Mahdi Jahandideh v R [2014] NSWCA 178 at [15]-[17]. This may particularly be the case in sentencing for offences where general deterrence is needed and where the offender is a corporation rather than a natural person: see Environment Protection Authority v Capdate Pty Ltd (1993) 78 LGERA 349 at 353; Environment Protection Authority v Emerald Peat Pty Ltd (in liq) [1999] NSWLEC 147; Environment Protection Authority v Douglass (No 2) [2002] NSWLEC 94 at [16]; Bentley v BGP Properties Pty Ltd at [270]-[275].
In Environment Protection Authority v Albiston [2020] NSWLEC 80, the Court considered whether the evidence was sufficient to demonstrate that the defendant had no capacity to pay any likely fine. The Court held that (at [184]):
184 The evidence adduced by Mr Albiston is incomplete and does not give a comprehensive picture of his financial position. I do not consider that Mr Albiston has discharged his onus of proving that he is unable to pay whatever monetary penalty that the Court is likely to impose.
Payson asserted that its financial position was perilous. It further submitted that the offences the subject of these proceedings arose from conduct in 2016 to 2018, and despite Wheildon notifying the prosecutor of the offending conduct in mid-2018, the prosecutor did not commence proceedings until April 2021. The delay has not been explained.
[61]
Costs
The prosecutor sought an order for his professional costs as agreed or assessed pursuant to ss 257B and 257G of the Criminal Procedure Act 1986 ("CPA"). He estimated his professional costs to be $700,000 and its investigative costs are fixed in the sum of $2,374 (T375:17-24).
Payson submitted that the Court should apportion costs, and that it was not liable for the entirety of the prosecutor's professional costs because:
1. it would be unfair to be exposed in a criminal proceeding to the prosecutor's costs which have been incurred by the prosecutor seeking to prove factual matters that it simply could not prove, namely, the extent that the meter was under-recording by (T368:40-44);
2. in other jurisdictions defendants do not routinely pay costs in criminal matters; and
3. the Court has power, pursuant to s 257B of the CPA, to either reserve costs or otherwise fix a certain amount in costs. Section 257B of the CPA states as follows:
257B When costs may be awarded to prosecutor
A court may, in and by a conviction or order, order an accused person to pay to the registrar of the court, for payment to the prosecutor, such costs as the court specifies or, if the conviction or order directs, as may be determined under section 257G, if -
(a) the court convicts the accused person of an offence, or
(b) the court makes an order under section 10 of the Crimes (Sentencing Procedure) Act 1999 in respect of an offence.
In the result, on contested matter of fact the Court has made findings favouring the prosecutor. It would be inappropriate not, as an exercise of the Court's discretion, to award the prosecutor all of its costs in the circumstances. In addition, even if the Court were to accept the submission that the prosecutor engaged in unreasonable delay in bringing the prosecution, which it did not, in my view, given that the prosecution was commenced within time, the evidence does not establish a causal nexus between the delay and any deterioration on Payson's financial position.
Finally, while the Court retains a discretion to award the prosecutor its costs, such orders are routinely made upon conviction for the commission of environmental crimes in this Court.
However, in the exercise of its sentencing discretion, the Court takes into account the costs payable (Harris at [100]; Environment Protection Authority v Causmag Ore Company Pty Ltd [2015] NSWLEC 58 at [123] and Barnes at [78]-[88]). In doing so, the Court must be mindful that the payment of the prosecutor's costs is not a reason for reducing any penalty to be imposed in a particular case to less than that suggested by the general pattern of sentencing for the relevant offence (Liverpool City Council v Leppington Pastoral Co Pty Ltd [2010] NSWLEC 170 at [50]).
[62]
Appropriate Sentence
Having regard to the objective seriousness of the offences and the mitigating subjective factors of Payson, together with the penalties imposed in the relevant comparable cases, I find that the imposition of a monetary penalty is warranted for each offence as follows:
1. for the first meter offence a fine of $200,000;
2. for the second meter offence a fine of $250,000;
3. for the dam use offence a fine of $50,000; and
4. for the dam construction offence a fine of $50,000.
Each penalty must be discounted by 12.5% for the utilitarian value of Payson's early plea of guilty resulting in the imposition of a monetary penalty for each offence as follows:
1. for the first meter offence a fine of $175,000;
2. for the second meter offence a fine of $218,750;
3. for the dam construction offence a fine of $43,750; and
4. for the dam use offence a fine of $43,750.
After the application of the totality principle, the penalty for the commission of the second meter offence should be reduced to $125,000.
After the application of the totality principle with respect to the dam offences, the penalty for the commission of the dam use offence should be reduced to $10,000.
This brings the total penalty for the meter offences to $300,000 and for the dam use and construction offences to $53,750.
[63]
Moiety
The prosecutor contended that half of all monetary penalties imposed pursuant to s 122 of the Fines Act 1996 in these proceedings ought to be paid to him because of the costs incurred in investigating the offences. Having regard to all of the circumstances of this case I consider it appropriate.
[64]
Publication Order
The NRAR sought a publication order pursuant to s 353G(1)(a) of the WMA.
Payson resisted a publication order being made on the basis that it would humiliate both Barne and Payson, and amount to a further penalty imposed on Payson.
In the context of the purposes of sentencing, a publication order serves the functions of general deterrence, denunciation and a recognition of the harm caused by the offending (Environmental Protection Authority v Bartter Enterprises Pty Ltd (No 4) [2021] NSWLEC 45 at [105]).
In Ditchfield Preston J emphasised that the primary purpose of publicising the detection, prosecution and punishment of environmental offenders is to enhance general deterrence (at [76]). His Honour observed that by the public becoming aware of offending conduct, individuals and companies will be deterred from committing environmental crimes (see also Environment Protection Authority v Dyno Nobel Asia Pacific Pty Ltd [2017] NSWLEC 64 at [163]-[165]).
Payson's offending conduct occasioned actual harm to the regulatory scheme, impacting upon public trust in the efficacy of that scheme and on its efficient administration. A publication order not only serves as a deterrent to others, but affirms to the community that relies upon the statutory water sharing scheme that it is being appropriately administered to maintain its integrity.
In light of the important deterrent function of a publication order, I am of the opinion that the making of such an order in the terms attached at annexure 'A' is warranted. In reaching this conclusion I have taken into account any distress and embarrassment that the making of a publication order may have on Barne personally, especially in light of his mental health issues. However, on balance, I am of the view that the deliberate and reckless nature of the commission of some of the offences warrants the making of a publication order. I note that only Payson will be named in the publication.
[65]
Meter Compliance Checks
Finally, the prosecutor sought an order pursuant to s 353B(c) of the WMA that Payson must, by 31 August 2022, 31 August 2023 and 31 August 2024, at its own expense, cause the meter to be validated by a duly qualified person within the meaning of the WMA and to obtain a certificate from that qualified person to be provided to the prosecutor.
Payson opposed such an order for the following reasons:
1. the Court should not make such an order unless it is satisfied beyond reasonable doubt that it is necessary to prevent a recurrence of the offence. The Hunt affidavit states that the meter has been replaced and checked by Hunt indicating that the risk of a recurrence of the commission of the meter offences is low. Furthermore, Barne has taken measures to ensure that Payson does not commit any similar offences in the future;
2. the meter at Binneguy Station is currently not in use because of stop work orders and other directions issued by the NRAR. There is, therefore, a risk that an order pursuant to s 353B(c) of the WMA imposes an obligation upon Payson that it will not be able to meet and could expose it to criminal penalties; and
3. Payson remains obligated to comply with the regulatory regime by the function of the WMA. This amounts to a sufficient deterrent without imposing additional obligations upon Payson to have the meter checked.
In light of the Hunt affidavit and the evidence before the Court that a new meter has been installed at Binneguy Station, I am not satisfied that an order under s 353B(c) of the WMA as sought by the prosecutor is warranted and I decline to make it.
[66]
Orders
In conformity with the reasons given above, the Court makes the following orders:
In proceeding 117758 of 2021
(1) Henry Payson Pty Ltd is convicted of the offence against s 91I(1)(b) of the Water Management Act 2000 as charged in the amended summons filed 19 April 2022;
(2) Henry Payson Pty Ltd is to pay a fine in the sum of $175,000;
In proceeding 117770 of 2021
(3) Henry Payson Pty Ltd is convicted of the offence against s 91I(1)(b) of the Water Management Act 2000 as charged in the amended summons filed 19 April 2022;
(4) Henry Payson Pty Ltd is to pay a fine in the sum of $125,000;
In proceeding 117797 of 2021
(5) Henry Payson Pty Ltd is convicted of the offence against s 91B(1) of the Water Management Act 2000 as charged by the summons filed 27 April 2021;
(6) Henry Payson Pty Ltd is to pay a fine in the sum of $10,000;
In proceeding 117798 of 2021
(7) Henry Payson Pty Ltd is convicted of the offence against s 91B(1) of the Water Management Act 2000 as charged by the summons filed 27 April 2021;
(8) Henry Payson Pty Ltd is to pay a fine in the sum of $43,750;
In proceedings 117758, 117770, 117797 and 117798 of 2021
(9) pursuant to s 122(2) of the Fines Act 1996, 50% of each of the fines imposed under the preceding orders is to be paid to the prosecutor;
(10) pursuant to s 257B of the Criminal Procedure Act 1986, Henry Payson Pty Ltd is to pay the prosecutor's costs as agreed or assessed under s 257G of that Act;
(11) pursuant to s 353E(1) of the Water Management Act 2000, Henry Payson Pty Ltd is to pay to the investigation costs fixed in the amount of $2,374;
(12) pursuant to s 353G(1)(a) of the Water Management Act 2000, Henry Payson Pty Ltd must, within 28 days of this order, at its own expense, cause a notice to be published in the terms of annexure 'A' to this order in the digital and print versions of the following publications at the minimum size specified below within the first 12 pages of the print version:
1. The Land (10 cm x 18.6 cm);
2. The Moree Champion (18.6 cm x 12.9 cm); and
3. The Australian (10 cm x 18 cm);
(13) within seven days of the date of publication of the notice in accordance with the preceding order, Henry Payson Pty Ltd must provide to the prosecutor a copy of the entire page of the publication in the print version of each publication and screenshot of the entire page of the publication in the digital version of each publication in which the notice appears;
(14) the exhibits are to be returned; and
In proceedings 117759, 117760, 117761, 117762, 117763, 117764, 117765, 117766, 117767, 117768, 117769, 117771, 117772, 117773, 117774, 117775, 117776, 117777, 117778, 117779, 117780, 117781, 117782, 117783, 117784, 117785, 117786, 117787, 117788, 117789, 117790, 117791, 117792, 117793, 117794, 117795, 117796, 117799 and 117800 of 2021
(15) the Court notes that in proceedings 117759, 117760, 117761, 117762, 117763, 117764, 117765, 117766, 117767, 117768, 117769, 117771, 117772, 117773, 117774, 117775, 117776, 117777, 117778, 117779, 117780, 117781, 117782, 117783, 117784, 117785, 117786, 117787, 117788, 117789, 117790, 117791, 117792, 117793, 117794, 117795, 117796, 117799 and 117800 of 2021 the summonses are withdrawn by the prosecution.
Annexure 'A'
Henry Payson Pty Ltd ("Payson") was convicted and fined in the Land and Environment Court of New South Wales ("the Court") on 31 January 2023 for two offences against s 91I(1) and two offences against s 91B(1) of the Water Management Act 2000 ("the WMA"). The offences related to knowingly taking water from the Gwydir Regulated River water source when its metering equipment was under-recording the water being taken and to constructing and using a dam to store water for the purposes of irrigating cotton crops without holding the required approval to do so.
Following an investigation by the Natural Resources Access Regulator ("NRAR"), Payson was prosecuted in the Court. It pleaded guilty to the four charges. It was fined a total of $353,750 and ordered to pay the NRAR's professional costs as agree or assessed and investigation costs fixed in the sum of $2,374.
All property owners, companies and water users should be aware of the serious consequences for committing offences against the WMA. The NRAR undertakes ongoing auditing and investigations to ensure that the recording of the volume of water taken by licence holders is accurate, and that water management works are authorised by means of approval, so as to ensure the equitable sharing of water from water sources and the protection of water sources, their associated ecosystems, ecological processes and biological diversity and their water quality, in accordance with the objects of the WMA.
[67]
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: 31 January 2023
Parties
Applicant/Plaintiff:
Grant Barnes, Chief Regulatory Officer, Natural Resources Access Regulator
The amended summons for the second meter offence charges Payson with the following:
The prosecutor claims:
1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant), having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charges set out in the following counts:
COUNT 1
That, between about 5.15am on 7 December 2017 and about 4.45am on 20 February 2018, at the property known as Binneguy Station, comprised of Lot 41 of Deposited Plan 751750 and 23 other lots located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91I(1)(b) of the Water Management Act 2000 (NSW) (the Act), in that, the Defendant took water from a water source to which Part 3 of Chapter 3 of the Act applied by means of a metered work while its metering equipment was not operating properly and knew by its director George Barne that the metering equipment was not operating properly.
Particulars
(a) The subject property
At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.
(b) The relevant times
The relevant times were approximately:
5.15am on 7 December 2017 to 11.45pm on 9 December 2017;
1.30am on 10 December 2017 to 9.00am on 10 December 2017;
1.45pm on 15 December 2017 to 4.30am on 19 December 2017;
5.30pm on 16 December 2017 to 5.30am on 17 December 2017;
7.15am on 17 December 2017 to 8.15am on 17 December 2017;
9.15am on 17 December 2017 to 4.30am on 19 December 2017;
4.15am on 21 December 2017 to 0.00am on 23 December 2017;
3.15pm on 26 December 2017 to 8.45am on 28 December 2017;
7.15pm on 26 December 2017 to 8.45am on 28 December 2017;
3.45am on 30 December 2017 to 3.15am on 31 December 2017;
4.45am on 1 January 2018 to 11.00am on 4 January 2018;
3.00pm on 4 January 2018 to 5.15pm on 4 January 2018;
5.45pm on 4 January 2018 to 7.00am on 6 January 2018;
11.30am on 6 January 2018 to 7.00pm on 10 January 2018;
8.00pm on 10 January 2018 to 4.45am on 11 January 2018;
5.15am on 11 January 2018 to 8.00am on 15 January 2018;
11.15pm on 17 January 2018 to 10.15am on 22 January 2018;
12.30am on 27 January 2018 to 6.45pm on 28 January 2018;
5.00am on 5 February 2018 to 4.15pm on 7 February 2018;
12.15pm on 14 February 2018 to 6.45am on 15 February 2018;
10.30am on 14 February 2018 to 6.45am on 15 February 2018;
8.00am on 16 February 2018 to 6.45am on 18 February 2018; and
7.15am on 18 February 2018 to 4.45am on 20 February 2018.
(c) A person who takes water
The Defendant took water by pump extraction.
(d) From a water source to which Part 3 of Chapter 3 of the Act applies
The Gwydir Regulated River Water Source, as proclaimed in the Proclamation under the Water Management Act 2000 published in Gazette No. 110 of 1 July 2004, p 5004.
(e) By means of a metered work
Water was taken using a metered Batescrew pump located at GPS Coordinates at around Latitude -29.529040025, Longitude 150.208328485 within Lot 41 of Deposited Plan 751750, being the pump authorised for use at Binneguy Station by Combined Water Supply Work and Water Use Approval 90CA800277.
(f) Metering equipment
The pump was fitted with, or connected to, a Mace Agriflow Series 3 meter with Serial Number 26203.
(g) Metering equipment was not operating properly
The Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly in that it was not correctly measuring the volume of water extracted by means of the pump from the water source.
(h) Knew metering equipment was not operating properly.
The Defendant knew by its director George Barne that the Mace Agriflow Series 3 meter with Serial Number 26203 was not operating properly by not correctly measuring the volume of water being extracted by the pump from the water source.
(i) Evidence of the offence first came to the attention of the authorised officer on 30 July 2018
Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals - Regional Water Regulation West, on 30 July 2018.
The summons for the dam use offence is as follows:
The prosecutor claims:
1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant) having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charge that, between 1 July 2016 and 30 June 2018 inclusive, at the property (known as Binneguy Station) comprising relevantly Lot 137 of Deposited Plan 751750 along with 23 other lots, located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91B(1) of the Water Management Act 2000 (NSW) (the Act), in that the Defendant used a water supply work and did not hold a water supply work approval for that work.
Particulars
(a) The subject property
At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.
(b) Used a water supply work
Between 1 July 2016 and 30 June 2018 inclusive, the Defendant used a water supply work, namely a dam located at around Latitude ‑29.537786752, Longitude 150.167078793 within Lot 37 of Deposited 751750, for the storage of water and for the irrigation of crops grown at Binneguy Station.
(c) Did not hold a water supply work approval for that work
No person, including the Defendant, has ever held a water supply work approval for the dam located at around Latitude -29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750.
(d) Alternative legal basis to establish liability
In the alternative to the Defendant being in direct contravention of s 91B(1):
i. During the said period, George Barne (the Defendant's Director) contravened s. 91B(1) of the Act in that he used a water supply work at Binneguy Station, being a dam at around Latitude -29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750, for the storage of water and for the irrigation of crops grown at Binneguy Station, in circumstances where there was no water supply work approval for that work
ii. In the circumstances and by reason of the Defendant being the occupier of Binneguy Station during the said period, the Defendant is taken to have committed an offence against s 91B(1) of the Act by the application of s 91L(1)(a) of the Act.
(e) Evidence of the offence first came to the attention of an authorised officer on 30 July 2018
Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals - Regional Water Regulation West, on 30 July 2018.
Finally, the dam construction offence is charged in these terms:
The prosecutor claims:
1. An order pursuant to s 246 of the Criminal Procedure Act 1986 (NSW) that Henry Payson Pty Ltd ACN 608 721 919 (the Defendant) having its registered office at 22 Bridge Street, Moree in the State of New South Wales, appear before a Judge of the Court to answer to the charge that between about 8 February 2016 and about 9 March 2016 at the property (known as Binneguy Station) comprising relevantly Lot 137 of Deposited Plan 751750 along with 23 other lots, located at 17036 Gwydir Highway, Biniguy, in the State of New South Wales, the Defendant committed an offence contrary to s 91B(1) of the Water Management Act 2000 (NSW) (the Act), in that the Defendant constructed a water supply work and did not hold a water supply work approval for that work.
Particulars
(a) The subject property
At all relevant times, Binneguy Station comprised Lot 41 of Deposited Plan 751750; Lot 1 of Deposited Plan 596939; Lot 14 of Deposited Plan 751750; Lot 35 of Deposited Plan 751750; Lot 36 of Deposited Plan 751750; Lot 52 of Deposited Plan 751750; Lot 68 of Deposited Plan 751750; Lot 129 of Deposited Plan 751750; Lot 130 of Deposited Plan 751750; Lot 132 of Deposited Plan 751750; Lot 133 of Deposited Plan 751750; Lot 137 of Deposited Plan 751750; Lot 157 of Deposited Plan 751750; Lot 1 of Deposited Plan 665701; Lot 1 of Deposited Plan 954967; Lot 1 of Deposited Plan 1100126; Lot 2 of Deposited Plan 1100126; Lot 1 of Deposited Plan 721690; Lot 2 of Deposited Plan 721690; Lot 1 of Deposited Plan 610624; Lot 44 of Deposited Plan 657698 and Lot 143 of Deposited Plan 1079760.
(b) Constructed a water supply water
Between about 8 February 2016 and about 9 March 2016, the Defendant constructed a dam located at around Latitude ‑29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750.
(c) Did not hold a water supply work approval for that work
No person, including the Defendant, has ever held a water supply work approval for the dam located at around Latitude ‑29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750.
(d) Alternative legal basis to establish liability
In the alternative to the Defendant being in direct contravention of s 91B(1):
i. During the said period, George Barne (the Defendant's Director) contravened s. 91B(1) of the Act in that he constructed a water supply work at Binneguy Station, being a dam at around Latitude -29.537786752, Longitude 150.167078793 within Lot 137 of Deposited Plan 751750, in circumstances where there was no water supply work approval for that work
ii. In the circumstances and by reason of the Defendant being the occupier of Binneguy Station during the said period, the Defendant is taken to have committed an offence against s 91B(1) of the Act by the application of s 91L(1)(a) of the Act.
(e) Evidence of the offence first came to the attention of an authorised officer on 30 July 2018
Evidence of the offence first came to the attention of any relevant authorised officer when it came to the attention of Vickie Chatfield, Manager Licencing and Approvals - Regional Water Regulation West, on 30 July 2018.
At all relevant times, George Barne, the sole director and shareholder of Payson, was the controlling mind of the corporate defendant. That is, Barne was the "embodiment of the company" (The Hills Shire Council v Kinnamey Civil & Earthworks Pty Ltd [2012] NSWLEC 45; (2012) 188 LGERA 273 at [31]), and therefore, Barne's acts and knowledge are those of Payson, as are any mitigating circumstances attributable to him.
If the Doppler sensor was placed in a direction that was contrary to the manufacturer's specifications, the sensor could incorrectly detect, and therefore, the meter could incorrectly record, a flowrate that was lower than the actual flowrate.
A grub screw was located at the top of the shaft connected to the Doppler sensor. The direction of the grub screw indicated the direction of the velocity sensing face of the Doppler sensor inside the pipe. It was not in dispute that during the charge period, the Doppler sensor was facing in a direction that caused the meter to under-record the velocity of the water flow.
During February and March 2016, Wilde Civil Pty Ltd ("Wilde Civil") carried out earthworks to dam 1 and constructed dam 2 in accordance with plans prepared by SMK Consultants Pty Ltd ("SMK Consultants"). Wilde Civil's invoices for this work were issued to, and paid for by, Payson.
SMK Consultants had been engaged by Payson to undertake irrigation consultancy work at Binneguy Station and undertook work related to a "Gully dam survey and design" in 2015 during the course of the consultancy. One of the purposes of constructing dam 2 was to enable the capture of water when it flowed over the spillway of dam 1.
The construction of dam 2 commenced on 11 February 2016, and was completed no later than by the end of April 2016. The construction of dam 2 is the subject of the dam construction offence.
Following the completion of the works the total capacity of dam 1 was approximately 1,051 ML. However, when the amount of water in dam 1 reached around 824 ML, the new design meant that water would flow over the spillway into dam 2. After it was constructed, the total capacity of dam 2 was approximately 610 ML.
The total combined capacity of dams 1 and 2 was between 1,472 and 1,662 ML.
Dams 1 and 2 were capable of being used to collect and store water which would then be used to irrigate crops cultivated on Binneguy Station.
Between 1 July 2016 and 30 June 2018, as a consequence of rainfall or, in one instance, the extraction of water from the water source following a high flow event, Payson stored water in dam 2. This is the conduct that is the subject of the dam use offence.
10.45am 22/9/2016 to 7.45am 23/9/2016 Start: 3091.44 20.12 ML/day 17.6 ML
End: 3109.04
5.15am 27/1/2017 to 7.45am 29/1/2017 Start: 3109.75 30.51 ML/day 64.15 ML
End: 3173.90
5.00am 10/2/2017 to 5.15am 11/2/2017 Start: 3174.25 27.38 ML/day 27.6 ML
End: 3201.85
4.30am 17/2/2017 to 4.30am 19/2/2017 Start: 3202.14 27.88 ML/day 55.74 ML
End: 3257.88
5.15am 24/2/2017 to 6.30pm 24/2/2017 Start: 3258.13 24.84 ML/day 13.72 ML
End: 3271.85
1.45pm 20/3/2017 to 6.45am 21/3/2017 Start: 3272.2 26.30 ML/day 18.56 ML
End: 3290.76
Total 28.24 ML/day 485.28 ML
3.45am 30/12/2017 to 3.15am 31/12/2017 Start: 3541.84 23.95 ML/day 23.44 ML
End: 3565.28
4.45am 1/1/2018 to 11.00am 4/1/2018 Start: 3565.35 22.00 ML/day 71.86 ML
End: 3637.21
3.00pm 4/1/2018 to 5.15pm 4/1/2018 Start: 3637.43 21.18 ML/day 1.98 ML
End: 3639.41
5.45pm 4/1/2018 to 7.00am 6/1/2018 Start: 3639.65 22.07 ML/day 34.25 ML
End: 3673.90
11.30am 6/1/2018 to 7.00pm 10/1/2018 Start: 3674.14 24.12 ML/day 104.03 ML
End: 3778.17
8.00pm 10/1/2018 to 4.45am 11/1/2018 Start: 3778.43 24.05 ML/day 8.76 ML
End: 3787.19
5.15am 11/1/2018 to 8.00am 15/1/2018 Start: 3787.45 20.43 ML/day 84.00 ML
End: 3871.45
11.15pm 17/1/2018 to 10.15am 22/1/2018 Start: 3871.65 20.34 ML/day 90.71 ML
End: 3962.36
12.15am 26/1/2018 to 11.15am 26/1/2018 Start: 3962.57 20.23 ML/day 9.27 ML
End: 3971.84
12.30am 27/1/2018 to 6.45pm 28/1/2018 Start: 3972.06 19.53 ML/day 34.37 ML
End: 4006.43
5.00am 5/2/2018 to 4.15pm 7/2/2018 Start: 4006.60 16.80 ML/day 41.46 ML
End: 4048.06
6.45am 13/2/2018 to 11.15am 14/2/2018 Start: 4048.23 16.92 ML/day 20.11 ML
End: 4068.34
12.15pm 14/2/2018 to 6.45am 15/2/2018 Start: 4068.48 13.92 ML/day 10.73 ML
End: 4079.21
10.30am 15/2/2018 to 6.00am 16/2/2018 Start: 4079.36 14.83 ML/day 12.05 ML
End: 4091.41
8.00am 16/2/2018 to 10.45am 16/2/2018 Start: 4091.57 14.44 ML/day 1.64 ML
End: 4093.21
12.00pm 16/2/2018 to 6.45am 18/2/2018 Start: 4093.63 13.48 ML/day 24.95 ML
End: 4118.58
7.15am 18/2/2018 to 4.45am 20/2/2018 Start: 4118.73 14.08 ML/day 26.69 ML
End: 4145.42
Total 20.58 ML/day 847.35 ML
A sentencing court may not take facts into account adverse to the interests of the offender unless those facts have been established beyond reasonable doubt. However, if there are circumstances in favour of the offender that a court proposes to take into account, it is sufficient if those circumstances are established on the balance of probabilities (R v Olbrich [1999] HCA 54; (1999) 199 CLR 270 at 281).
The appropriate sentence for Payson is to be determined by an instinctive synthesis of all of the relevant objective and subjective circumstances (Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357).
Importantly, the sentence to be imposed on Payson for the commission of the offences must be proportionate to both the objective seriousness or gravity of the offences and Payson's subjective circumstances (Veen v The Queen [1979] HCA 7; (1979) 143 CLR 458 at 490 and Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 472).
To similar effect, the objects of the 2016 WSP contained in cl 9 of that instrument identify the following purposes of the plan:
9 Objectives
The objectives of this Plan are to:
(a) protect, maintain and enhance the environmental values of the Gwydir Regulated River Water Source,
(b) manage the Gwydir Regulated River Water Source to ensure equitable sharing of water between all uses,
(c) protect the Gwydir Regulated River Water Source by ensuring that extraction minimises any adverse impacts,
(d) improve water quality in the Gwydir Regulated River Water Source,
(e) provide opportunities for ecologically sustainable market based trading of surface water entitlements in the Gwydir Regulated River Water Source,
(f) manage the Gwydir Regulated River Water Source to preserve and enhance basic water rights,
(g) ensure extraction from the Gwydir Regulated River Water Source is managed properly within the Murray-Darling Basin Ministerial Council Cap, and
(h) manage the Gwydir Regulated River Water Source to preserve and enhance cultural and heritage values.
Offences against ss 91B(1) and 91I(1) of the WMA frustrate the attainment of the objects of that Act and those of the 2016 WSP, including the principles of ecologically sustainable development and the efficient and equitable sharing of water. The term "principles of ecologically sustainable development" is defined in the Dictionary to the WMA to mean "principles of ecologically sustainable development described in s 6(2) of the Protection of the Environment Administration Act 1991", which includes the precautionary principle, intergenerational equity, the conservation of biological diversity and ecological integrity, and improved valuation, pricing and incentive mechanisms.
The prosecutor submitted that in relation to the meter offences, the nature of that conduct offended against the objectives of the WMA and the relevant offence provisions by subverting the objects of the statutory water management scheme. This was accepted by Payson. Likewise, I accept the prosecution's submission.
The water management system established under the WMA and the 2016 WSP depends upon persons complying with the regulatory scheme when accessing water, including any requirement to use a properly operating meter. Adherence with the statutory regime is the price payable for entities to access an increasingly scarce resource in a manner that is environmentally and socially sustainable (Natural Resources Access Regulator v Tony Thompson [2022] NSWLEC 48 at [85]).
In Natural Resources Access Regulator v Maules Creek Coal Pty Ltd [2021] NSWLEC 135, Pain J observed that (at [174]):
174 Taking water that is not accounted for by the system under the WM Act undermines the purpose of the legislation. It circumscribes the ability of the regulator to deliver a scarce resource equitably and to effectively plan for a sustainable future. This impacts the environment. It undermines user confidence and public confidence in the system, at a time when community concerns already exist about the management of this valuable resource and of the impacts to water resources from development of the mine.
Payson took water while the meter was not operating properly and in doing so engaged in conduct that fundamentally undermined the ability of the regulator to manage a shared water resource for the benefit of the community and the environment.
In relation to the dam use and construction offences, the prosecutor contended that the nature of that offending undermined the regulatory scheme, albeit in a less serious manner, because the WMA relies upon persons complying with the requirements of the approval regime for water works to ensure the sustainable sharing of water resources (citing Perdikaris at [46]-[47]). However, unlike the meter offences, the commission of the dam use and the dam construction offences undermined the integrity of the approval scheme at a level of generality and did not materially impact upon the water sharing scheme on which the community relies.
Payson similarly accepted the prosecutor's submission with respect to the nature of the dam use and the dam construction offences. I also accept the prosecutor's characterisation of the nature of these offences.
The commission and use of water supply works without appropriate approval undermined the capacity of the regulator to ensure that water supply works are carried out in a manner that is compatible with the objects of the WMA and 2016 WSP.
It was around this time that Wheildon arranged for Waterquip to attend Binneguy Station to fix an ant infestation affecting the meter screen. While Waterquip was on site Wheildon asked the technician to check that the correct parameters had been entered into the meter. The technician measured the pipe and indicated that the meter appeared to be working properly. The technician was not asked, however, to check, and did not check, the Doppler sensor in the pipe. At that stage, Wheildon did not know that the cause of the under-recording by the meter was the incorrect positioning of the Doppler sensor (T72:24-74:07).
Barne was away from Binneguy Station from 27 July to 4 October 2016. Upon his return, Wheildon expressed concerns to him about the meter under-recording:
30. At the time I had the meter checked and repaired, George Barne was overseas. Upon his return I spoke with him and told him I had the meter checked for accuracy and the screen repaired. I expressed concerns to him that something was not right, as there was more water in the dam than what the meter said and that there was very little run off. I cannot remember the exact conversation word for word, but he was a bit disgruntled with me getting the Waterquip out to check the meter. He said something to the effect of 'it must be alright now then? You must have miss calculated the amount of run off and that meter has been working fine for years." I just left it at that and didn't make a big issue out of it. I got the feeling from the discussion, not to push the point and that it was none of my business.
In a text message conversation between Wheildon and Barne dated 28 January 2017, the following was said:
Barne Well make sure we record all these numbers and then we can look at options and cost/benefit analysis of keeping CAT, buying a fuel efficient Volvo or installing an electric motor and buying electricity reduce costs. Might be something we decide to do later if we get a lot of water in copeton and delay doing if we don't have a lot of water in copeton.
Wheildon My feeling in 60 is 32
Barne I'd like to find out exactly how much our flow meter is out by otherwise we can't calculate anything to base decisions on
Wheildon You wouldn't invest without water in dam but I would like it worked out even if you don't pull trigger for a few years
Barne Yes my thoughts exactly
Under cross-examination Wheildon repeated that the conversation occurred. He maintained that a "long, in my face, yelling at me conversation" resulted from him raising concerns about the meter under-recording with Barne (T98:01-25). Wheildon did, however, acknowledge that his account of the confrontation appeared inconsistent with the collegiate text messages and email exchanges that occurred between him and Barne during the same period (T98:24-25).
His explanation for this inconsistency, and other inconsistencies between his oral evidence and contemporaneous text messages, was because he did not want his employment and reputation jeopardised (T113:22-39):
Q. what he's going to say later about you, do you agree?
A. Absolutely it will. If I say, I'm leaving because you're a water - you're, you're a thief and you're stealing water and all that, I mean, that's pretty much saying exactly what he told me not to say, otherwise I wouldn't get a reputation. So right back then when he churned me, I instantly knew that my whole career is on the, on the whims of George's thing. He made it quite clear. He threatened me, he told me that I would not get another job in the industry, face to face, abused me and all that. So I soon understood where George stood on the matter.
So from then on I made sure I didn't make the water an issue. I made sure that I followed company line. I thought I at least have to do at least two years, three years would be better. A good reference from George and then I can move on and put all this bad tempered and ill gotten things behind me. Okay, then it got this point and I thought, he's starting to click on because, you know, the few arguments and bringing up the water theft again and things like that. I got out of hand, I shouldn't have brought it up, but I did. So I was very concerned, okay.
During his oral evidence Wheildon repeatedly emphasised that he was concerned for his professional reputation in his dealings with Barne in respect of the meter under-recording.
By the end of the 2016/2017 cotton season, Wheildon thought "that we should have used twice as much water from the river than what" was recorded in Payson's "Water NSW records".
Wheildon deposed that Payson was more ambitious in the 2017/2018 cotton season and planted a cotton crop in all five irrigated fields at Binneguy Station, covering 250 ha.
On 30 August 2017 Wheildon emailed Barne outlining his expectations of water availability for that season:
Cotton country is also very dry will take 2 megs to water up. Without rain will have to drop 50 to 100 Ha out. Looking at water market talk to Moree Real estate no water available last lot sold for $300/meg.
We have 890 megs on license 100megs in dam.
Giving us around 1700megs for this years crop no rain throw growing season we will need 9-10megs/Ha giving us enough water for 180Ha of irrigation cotton this year without rain or buying water.
Wheildon explained how they prepared for the 2017/2018 cotton season:
57. Whilst preparing for the 2017/2018 cotton year, I was working on planting 100Ha of solid irrigated cotton, which was the paddock from the winter cereal crop the year before and fallowing the 150Ha of the previous year's cotton crop. George told me to prepare the whole 250Ha for irrigated cotton because he can buy water and get two for the price of one. When he said this I knew he was making reference to the water meter only reading fifty percent of the water it actually takes. I had learnt from previous experiences about this to keep my mouth shut and not say anything at this point in time.
58. I then prepared 250Ha for irrigated cotton. I had calculated that the farm did not have enough water allocation to grow 250Ha of irrigated cotton, even with the meter taking double the amount it was recording. I estimated that we would need approximately two thousand five hundred mega litres of water to grow the 250Ha of cotton. I had made plans to drop one or two paddocks from planning if we did not have a big rain event or could not purchase more water than what we had. As it happened, we did have a rain event and George bought 200ML of water at some stage during the winter season.
According to Wheildon, Barne directed him to create a fabricated water budget for the 2017/2018 cotton season:
60. I advised George that I cannot make an accurate calculation due to the meter only taking about fifty percent of what it actually was taking. George said something to the effect of fabricating the on farm figures to allow for the extra unmetered water that was going to be taken.
…
64. To cover up the water theft, George suggested that I make false entries in the columns with the heading "Water Left After Irrigation On Farm" and "Copton Dam" If you look immediately above the line that is dated 8/12/17, it shows an amount of "960" in the column headed "Water Left after Irrigation On Farm". This is falsified, in actual fact there was no more than 100ML of water in the dam prior to the first watering event on 8/12/17.
65. I advised George that we would need at least two thousand mega litres of water to grow the 250Ha, plus a preseason rain event to have a full profile of soil moisture.
66. After George telling me he was getting two for the price of one, he commented that he only really needed to have an allocation of one thousand mega litres to have the confidence to plant the whole 250Hs, as for every mega litre being recorded on the meter, he was getting about two mega litres on the farm.
He repeated the allegation in his oral evidence (T104:10-16):
Q I'm suggesting to you that George did not say anything to you about fabricating the figures in that document, do you agree?
A No, like he was well - yeah it was all directed by George to produce that document. Like he was - I, I was holding back off doing it, you know, like I was verbally talking about it and that. Because once you start falsifying documents, even though it was just within the company, it's still a tarnish on your reputation and your career. Like water theft is very frowned upon in that cotton industry.
Around December 2017 or January 2018 Wheildon installed a flapper valve on the pipe, and in doing so moved the Doppler sensor. Wheildon gave evidence that in order to carry out these works, he researched the proper functioning of the Doppler sensor. He therefore knew that the Doppler sensor, which was at a 45 degree angle, was incorrectly positioned. Accordingly, he moved it further into its correct position.
Wheildon gave evidence that when he told Barne that he had corrected the positioning of the Doppler sensor, Barne told him to return it to its previous position:
94. I don't remember exactly what day it was, but it would have been the next time I saw George, who was currently living on the property and told him that I had reinstalled the dopler device to the new location. I also told him that I now knew how the water was being stolen through the meter. He told me he hoped that I had set it up exactly the same as it was I said, "If you want it that way, you will have to go and change it. I have put it in right." He said something to the effect of "It doesn't matter how it is in now, you have always known that it was being taking water incorrectly and go fix it back up."
During oral evidence Wheildon stated (T106:38-47):
Q He did not tell you anything about how the meter sensor might be moved?
A. His instructions were to move it to a location and then set it up exactly the same way as it was, make sure that it's marked and, you know, moved identical.
Q I suggest he did not tell you to leave it how it was, do you agree?
A To your suggestion?
Q Yes?
A No, I agree with what I said.
According to Wheildon, the next time he used the river pump it was pumping at a rate of 22 ML per day indicating that the Doppler sensor had been moved back to an incorrect position:
95. I refused to go back and fix it however the next time I started the pump, it was running back around 22ML per day.
96. It was at this point in time that I decided I could no longer work for George Barne due to his practices around taking water which I thought was wrong and illegal. I could not turn a blind eye to this anymore as I have worked on farms that have been at the end of a river system where water has not arrived to me because someone further up the system had taken the water illegally and as a result, I lost of large percentage of yield due to crop stress brought on by a lack of water.
97. Around the 11 January 2018 I verbally advised George that I would be resigning as farm manager and leaving the property. I did tell him that I would stay to the end of the season so that he could get his harvest done, so that I would meet my legal obligations with the Bolgard III licence.
In summary, it was Wheildon's evidence that he became aware of the meter under-recording from the first pumping event of the 2016/2017 cotton season onwards, and that shortly thereafter he informed Barne of this fact. Payson did not, however, rectify the under-recording. Rather, it continued to engage in cotton crop cultivation knowing that the meter was under-recording. This resulted in an increased crop size for the 2017/2018 cotton season.
The prosecutor contended that Wheildon's testimony was corroborated by the objective evidence. For example, in relation to the installation of the flapper valve, data from Meter Data Extract Sequence 23 2021/117780 shows that on 29 December 2017, the meter recorded a flow rate between 52.78 ML and 64.49 ML per day, thereby indicating that Wheildon had corrected the Doppler sensor when he moved the valve.
Later data recorded a flow rate of around 24 ML per day from 30 December 2017 onwards, indicating that the meter had been moved back into its incorrect position. This evidence is consistent with that of Wheildon's.
Barne accepted that he had received Wheildon's email dated 30 August 2017, indicating that, in Wheildon's estimate, the meter was under-recording by a factor of 1.8, but Barne maintained that he did not "know by how much the meter was under-recording between the 2016 and 2018 crop seasons" and he stated that he did not take steps to check whether the meter was under-recording, or to what extent, after he became aware of Wheildon's concerns in this regard.
Barne further deposed that:
55. In early 2017 I recall feeling anxious and concerned about the ramifications of Mr Wheildon's estimate and I didn't know what to do about it. I feared that I had effectively inherited the problem and that my father or the share farmer in (Gary Taunton) may have had taken water without approval before I acquired the farm. I did not want them to get in trouble.
56. I was also worried that Mr Wheildon could have caused the meter to under-record the water being taken form the river. While Mr Wheildon was, at that time, working at what I regarded to be a very high standard, he wanted to work alone, was reluctant to hire staff, and was unwilling to allow the previous share farmer, Gary Taunton, to provide him with advice about the farm. This made me think that Mr Wheildon did not want any oversight of his work, which did not make sense given how well he was performing, so I suspected a nefarious reason.
57. I did not confront anyone about the problem with the water meter, as I was concerned about exposing myself to liability, my relationship with my father and Gary Taunton, and the relationship between my father and Gary Taunton. By that stage I was also very dependent on Mr Wheildon for the successful running of the farm, and I was unsure about the costs involved in rectifying the problem and how that could be managed.
However, later in cross-examination he conceded that he knew that the meter was under-recording by a factor of 1.8 (T295:32-50):
Q. You knew that you would be in fact taking at least 1.8 times as much water as would be showing on your meter, is that right?
A. I knew that that was James' estimate, yes.
Q. You had to be confident it was right, didn't you?
A. I trusted James' calculations.
Q. In your mind, there was no doubt about it?
A. Mr Wheildon's - the circumstance was that Mr Wheildon's income largely depended on crop bonus, 3% of the gross takings of the crop. And on that basis, I was - I always assumed that James was making decisions based in the best interests of the crop.
Q. In terms of your knowledge, your evidence is - and correct me if I'm wrong - that you had no reason to doubt that you would be taking, because of the under-recording of the meter, about 1.8 times what you'd be metering in terms of extraction of water from the Gwydir River?
A. I had faith that James was in the - Mr Wheildon was in the ballpark, yes. I trusted that.
In answer to the allegations made by Wheildon, Barne responded as follows:
1. in relation to the meter check by Waterquip in 2016, he denied that he was disgruntled. Rather, he was upset because it was an unbudgeted expenditure, and not that Waterquip would discover that the meter was under-recording;
2. he denied that he and Wheildon argued with respect to the meter under-recording. He further denied that he threatened Wheildon's job as a result of Wheildon discussing the meter under-recording and the need to fix it with him;
3. in relation to Wheildon's evidence that Barne had said that they could "get two for the price of one" for the 250 ha of irrigated crop, Barne disputed saying this. However, he agreed that he had stated "it's really half price", but what he had meant was that because the gross profit margin for irrigated cotton was $500 per ML and water only cost $250 per ML, he was making a significant profit margin;
4. he denied that he had told Wheildon to fabricate a water budget; and
5. he refuted any suggestion that he had given instructions to Wheildon in relation to the installation of the flapper valve and the relocation of the Doppler sensor.
Payson submitted that Barne's "sole source" of knowledge of the meter under-recording was from Wheildon (T359:41-42), and therefore, Barne's evidence was no more reliable than Wheildon's, which had an error margin of 10-15%.
Payson relied upon the text and email communications between Barne and Wheildon at around this time to submit that they did not demonstrate that there was any animosity between the two and neither did they reveal or were consistent with any asserted knowledge that Barne had about the under-recording by the meter.
I do not agree. Having regard to the evidence and submissions set out above, I find beyond reasonable doubt that Payson committed the offences knowing that the meter was under-recording by at least a factor of 1.8:
1. first, both Wheildon and Barne stated that they knew that the meter was under-recording by a factor of 1.8 during the commission of the meter offences. In relation to Wheildon's email dated 30 August 2017, Barne knew that the increase from 990 ML to 1,700 ML in Wheildon's estimates was explicable only on the basis that Payson was extracting water at a rate of approximately 1.8 times greater than that being recorded by the meter;
2. second, contemporaneous communication evidence by way of text messages and emails between Barne and Wheildon demonstrated that they estimated water availability at Binneguy Station based on the meter under-recording by a factor of 1.8; and
3. third, Payson made business decisions, namely in the 2017/2018 cotton season, upon the premise that the meter was under-recording by a factor of 1.8.
Such a finding, although not equivalent to the "about half" estimate of under-recording contended for by the prosecution, nevertheless elevates to a significant degree the objective seriousness of the commission of the meter offences. Payson not only knowingly took water while the meter was not operating properly, but it did so knowing that the meter was under-recording to what, on any view, was a material extent.
As a consequence, the regulator was deceived as described by the prosecutor. The Water Account Statement for Barne's general security water access licence WAL 367 recorded about 163 ML of water as having been ordered and taken on that account in the 2016/2017 water year leaving a closing balance of 804 ML. This incorrect balance was carried over to the 2017/2018 water year as an opening balance with the consequences outlined above.
I am also satisfied beyond reasonable doubt that:
1. Barne was upset with Wheildon that a Waterquip technician had attended Binneguy Station because he was concerned that the under-recording would be discovered. Barne's testimony that he was angry about an unbudgeted expense is neither compelling nor consistent with his acceptance that the expense of the Waterquip visit had already been authorised (T249:45-50) and was relatively inexpensive ($600) (T247:40-249:39). Rather, Barne was disgruntled about Wheildon asking Waterquip to check the meter because he did not want the under-recording being exposed;
2. during the first half of the 2016/2017 cotton season, Wheildon believed that the dam pump was pumping about 50 ML a day. However, the meter was recording a much lower rate and Wheildon "knew without a doubt that we were stealing water". In cross-examination Wheildon stated that his estimate that the dam pump was pumping 50 ML per day was "conservative" and that in his experience the dam pump could pump up to 58 ML per day (T87:15-25);
3. in respect of Wheildon's email dated 30 August 2017, Barne knew that the increase in quantity in Wheildon's estimates was explicable only on the basis that Payson was extracting water at a rate of about 1.8 times greater than that being recorded by the meter (T296:15-19);
4. Wheildon's account of the installation of the flapper valve and his repositioning of the Doppler sensor was persuasive and was corroborated by objective evidence. It resulted in Wheildon understanding how the water was being under-recorded (as distinct from his earlier knowledge that it was being under-recorded). Barne's evidence of the installation of the flapper valve and repositioning of the Doppler sensor was, by contrast, evasive;
5. a confrontation between the two, as described by Wheildon, occurred (T98:12-15) after the simultaneous pumping event. That is, Wheildon told Barne of his concern that more water was being taken than was recorded and that this needed to be fixed. Barne's response was to threaten to fire Wheildon, withhold a reference and ruin his reputation in the industry. Moreover, Barne was concerned that if the meter was fixed it would show that they "were ordering twice as much water compared to the past couple of years and put us at risk of getting busted." Wheildon's concern for his reputation, and therefore, his desire to fix the meter, explains why Wheildon was motivated to raise the issue of the meter under-recording with Barne (T97:45-98:10):
Q. Do you mean by "confronting him" that you told him that you thought the meter was under-recording?
A. No, I confronted him saying we should fix it.
Q. You said we should fix it?
A. Well, I don't remember the exact words now, but yeah.
Q. What do you remember about what was said, if anything?
A. It was a long, in my face, yelling at me conversation about how I'd be in as much trouble as he would be, about how he - I wouldn't get work in the industry in the area and all that, how he would give no references or anything like that. Because you've got to remember, reputation is everything in farming. Everyone talks to everyone. So the second I would go for another job, that thing - the no reference, no thing, would be a big mark against my name and I would have trouble getting a job at the same level. And he actually carried through the threat.
That a confrontation occurred is also consistent with Barne's concern about the potential adverse consequences of the meter under-recording for himself, his father and Taunton. When cross-examined on whether a confrontation occurred, Barne initially denied that an argument had occurred or that Wheildon had informed him that he had moved the Doppler sensor into its correct position (T303:45-47). Barne accepted, however, that Wheildon had told him that he had "moved the sensor further downstream of the flapper valve" (T303:42-43). No cogent explanation was given for the inconsistency in Barne's testimony;
1. the evidence of collegiate text and email communications does not derogate from the credibility of Wheildon's account of events. As Wheildon explained, having been threatened with the loss of his job and the tarnishing of his reputation in the industry, he sought to maintain cordial relations with Barne. In any event, it cannot be concluded that the texts and emails occurred at the same time as the confrontation;
2. Barne directed Wheildon to move the Doppler sensor back to its incorrect position after the flapper valve was installed. The meter recording data during that time period corroborates Wheildon's account of events;
3. In the Wheildon affidavit he also recalled the following events during the 2016/2017 cotton season indicating the extent of the meter under-recording:
27 For the watering event on 27/1/17 according to the meter, I pumped my 64ML over the 2 days but instead of being left with 45ML in the dam I ended up with an extra 40ML in the dam, which gave me a total of 130ML in the dam. This is when I realised it was way out as it was the first time I used water from the dam directly in the field. Pretty much the first day I started using water from the river, I realised that there was a lot more than 32ML coming from the river because I had to keep starting twice as many syphons to keep the head ditch from overflowing. The irrigation finished sooner, and water ended up going into the dam.
…
29 On 10/2/17, I halved my order for river water because of what happened on 27/1/17 confirming that I'd actually gotten twice the amount of the water that the meter read, and I didn't want to push the dam back up again.
1. on 30 August 2017 Wheildon emailed Barne stating that there were 890 ML of water in the Copeton dam consistent with the water balance in WAL 367, and 100 ML in the dam. However, 1,700 ML was in fact available. This was only explicable if Payson was extracting water at a rate of 1.8 times what was being metered (T296:15-19). The increase was explicable on the basis that Wheildon estimated that the meter was under-recording by a factor of 1.8 (T325:40-41);
2. Payson planted a 250 ha irrigated cotton crop in the 2017/2018 cotton season based upon these estimates and successfully sustained that crop. Wheildon, therefore, concluded that his estimates that the meter was under-recording by about 50% were accurate within a range of 10-15% (T95:47-50);
3. Wheildon's evidence was based upon his considerable experience as a cotton farmer and his understanding of irrigation and the use of pumps. Wheildon was not guessing the rate of under-recording, rather his estimate was based upon his knowledge and evidence. Notably, Wheildon's evidence in relation to the simultaneous pumping event demonstrated that the river pump was pumping at a rate equal to or greater that the dam pump, which was running at a rate of around 50 ML per day. However, during that event, which occurred about halfway through the 2016/2017 cotton season, the river pump was operating at a rate of around 28.24 ML per day. Therefore, the meter was under-recording by about half;
4. Barne directed Wheildon to fabricate a water budget. Barne accepted that he directed Wheildon to prepare the 2017/2018 water budget (T297:10-11), and moreover, that he did so in the context of knowing that the meter was under-recording by a factor of 1.8. Contemporaneous emails suggested that Barne had taken an active interest in the water budget, for example, Barne emailed Wheildon on 7 November 2017, requesting him to update the budget and to send it to him and Chris Maunder. Although Wheildon created and populated the water budget for the 2017/2018 cotton season, Barne was responsible for dealing with Payson's cotton broker and agronomist. Barne had cause to direct Wheildon to fabricate the water budget so that he could negotiate with these persons. Emails between Barne and Wheildon during that period also show that Barne followed up with Wheildon asking about the water budget. They are consistent with Wheildon's testimony. In addition, Barne had already sold part of the 2017/2018 cotton crop at this juncture and Payson faced potential economic loss if the meter was corrected and Payson was no longer able to access water to sustain a crop of 250 ha. On this issue, Barne admitted anxiety about disclosing the under-recording by the meter (see T309:03-11):
Q. Yes. You've told the Court you had some concern about the potential ramifications if there was something done which would disclose a previous under-recording by the meter. What I'm putting to you is that your principal concern about that was of the ramifications that would have for you. Is that true?
A. I wouldn't be able to tell you the order in which fear or anxiety, those - the list of ramifications of my father, Mr Tornton, Mr Wheildon being implicated, my company and its economic impact or myself personally as an employee and director of the company.
1. the data from Meter Data Extract Sequence 23 2021/117780 showed that on 29 December 2017, the meter recorded a sudden spike in the flow rate of between 52.78 ML and 64.49 ML per day, indicating that Wheildon had corrected the Doppler sensor when he moved the valve. However, from 30 December 2017, the flow rate dropped back down to a rate of around 24 ML per day, suggesting that the meter had been moved back into its incorrect position. Payson had committed to a larger cotton crop for the 2017/2018 cotton season and it risked its financial detriment if the meter under-recording was rectified;
2. during the 2017/2018 cotton season data retrieved from the meter recorded that 847.35 ML of water was extracted from the Gwydir River by the river pump. However, it was Dr Meyer's evidence (discussed further below) that more than twice this amount exclusive of rainfall would have been needed to sustain the crop planted by Payson during that season;
3. Barne ultimately accepted that he knew the meter was under-recording by a factor of 1.8 (T295:32-50); and
4. he also accepted that he had been consciously retaining water entitlements under his water accounts that should have been debited from those accounts (T282:18-22).
I am therefore satisfied beyond reasonable doubt that Payson knowingly took water while the meter was under-recording by a factor of 1.8 and that it continued to do so notwithstanding this knowledge.
In addition, I find to the requisite degree that Barne deliberately deceived the regulator about how much water he was taking from the Gwydir River for both the 2016/2017 and 2017/2018 cotton seasons. He caused the water budget to be falsified to ensure that no other persons became aware of the meter under-recording.
These findings significantly elevate the objective seriousness of the commission of the meter offences.
Accordingly, the prosecutor submitted, the Court would not accept that the commission of the dam use and the dam construction offences by Payson were committed unintentionally. Rather, the offence were, at the very least, committed recklessly.
Payson submitted that Barne's bad judgement with respect to the dam use and the dam construction offences was the consequence of his inexperience as a farmer. He was heavily reliant on the advice of others. Dam 2 was only constructed after Payson had received advice from SMK Consultants, a group of registered surveyors, environmental consultants and civil engineers, who undertook irrigation design and environmental assessment, planning and project management. SMK Consultants did not advise Payson that approval should be sought for the construction or use of dam 2.
In short, Payson, through Barne, was made aware that an approval might be needed, however, no further advice was sought by Payson in circumstances where there was no impediment to obtaining such advice.
He accepted that his report did not incorporate climatic and weather data from Pallamallawa station, despite it being the closest to Binneguy Station (T157:37-45).
In cross-examination Dr Meyer accepted that he had not taken into account the following factors in his calculations:
1. moisture in the soil at the commencement of sowing which could provide a water source for the cotton crop provided that there was a "difference between" the soil moisture at the "start date and the end date" (T170:35-40);
2. the properties of the soil at Binneguy station, including its alluvial properties and its capacity to retain moisture (T172:04-23);
3. whether water was in the dams at the commencement of each season which was available for use (T172:25-27); and
4. the irrigation and water management system at Binneguy Station (T172:29-45).
Dr Meyer was questioned about a soil probe report of soil moisture at Binneguy Station during the 2016/2017 cotton season ("the soil probe report"). The soil probe report indicated that there was a soil moisture difference of 60 mm during that period (T171:27-48):
Q. That's an unaccounted water source, do you agree with that?
A. Potentially so, that is true. If that, if that's a correct figure. But I would be, I would just put this proviso on it; unless those values are, so the water content within the soil have been well calibrated, that's an estimate of what the water content difference will be and, generally, there is an underestimate on most commercial water balance measurements that are being made to produce that kind of graph.
Q. You're suggesting that - do you know Goanna Telemetry Systems?
A. I don't know them intimately, no.
Q. Are you aware that they're a company that provides a service to the cotton industry?
A. Yes, I can, yes, understand that would be the case, yes.
Q. You're suggesting that the tools that they're providing are generally underestimating the water value, is that correct?
A. I don't know anything definite on that, I just know that that's, that's generally true. And for the purposes for which they use it, in terms of indicating when irrigations need to be made, that's a perfectly good system to use, and is effectively is then, to some extent, calibrated by the, by the grower in terms of their water application.
In re-examination, however, Dr Meyer opined that while soil moisture could impact the accuracy of his calculations, it was unlikely that the soil probe report accurately conveyed the soil moisture as at the date the crop was sown (T187:30-44 and T188:11-17):
Q. I'm now asking you to accept for the purpose of argument, hypothetically, that you should also have taken into account a net soil moisture loss over the season of 60 millimetres, do you understand?
A. Yes.
Q. What difference would that make to the amount of rain - would that make a difference in terms of your attribution of the amount of rainfall or how would it factor into your equations, if that were the case?
A. If that was really the case, then you would - yes, you would decrease the, the amount that's needed by that 60 millimetres. In other words, if 60 millimetres of water came from soil water store, but I don't - that is - given the success of this crop -
Q. I don't want you to--
A. --that I think it's unlikely, fairly unlikely.
…
Q. --are you able to tell the Court whether that would make a significant difference to the conclusion you've drawn at the end of paragraph 78 about how much water the irrigated crop would have been, apart from the rainfall and soil moisture?
A. Yes, that would make a, make a difference of 60 millimetres, which would decrease the amount of water that you needed by that 60 millimetres. And because we've got 60 millimetres coming from the soil store, correct.
Dr Meyer also accepted that in relation to the irrigation and water management system at Binneguy Station he did not take into account the following (T172:29-45):
Q. Do you agree that water that is shed from heavy rain can run into dams by gravity?
A. As a generality, that's true.
Q. If you have a dam built into a hill, the dam will receive not only the water that rains on it, but water running down the hill, do you agree with that?
A. It depends on the size of the catchment as to how much water might be directed into the dam, yes.
Q. You did not take into account in your calculations water that was shed on the property and that then ran into the dams, did you?
A. No. No information about that at all.
Q. You did not take into account runoff that was pumped from the irrigated fields back into the dams, did you?
A. No, because, again, I have no information about what that, what that might be.
In summary, Dr Meyer opined that based upon the crop sustained and rainfall during the 2016/2017 and 2017/2018 cotton seasons, Payson required 1,268 ML and 2,012 ML per year respectively. Whereas, as was agreed, Payson's meter recorded taking 485.28 ML in the 2016/2017 cotton season and 847.35 ML during the 2017/2018 cotton season.
The prosecutor therefore submitted that Dr Meyer's evidence demonstrated that the meter was under-recording by a significant margin insofar as the water required for each crop was more than double than was recorded by the meter (T330:15-19). The incorrect assumptions and unaccounted matters in respect of Dr Meyer's evidence did not have a material impact upon his conclusion that about twice the water than had been recorded as taken was needed to sustain the crops at Binneguy Station during the relevant cotton years. This was because:
1. although not a cotton farmer, Dr Meyer was a suitably qualified expert and had experience with people in cotton growing areas, and therefore, understood the improvement in irrigation practices in the industry;
2. the 70% water use productivity rate in his calculations was a conservative estimate that was selected by hm as a matter of fairness from the upper range of efficiency rates for cotton growers. The large surface area of dam 1 meant that it had a higher evaporation rate, and therefore, this indicated that the true efficiency rate at Binneguy Station may be lower (T332:16-44);
3. the fact that Dr Meyer did not take into account the proximity of the dams to the cotton fields or Wheildon's specific irrigation practices was immaterial because they were incorporated into the water use productivity rate that Dr Meyer nominated (70%) and there was no suggestion that these factors materially undermined the water use productivity rate (T337:23-40);
4. Dr Meyer's use of weather data from Moree post office and Moree airport made only minor differences to his overall calculations (T336:05-30);
5. Dr Meyer's calculations based upon rainfall data from rain gauges located outside Binneguy Station was similarly not material. When asked to take into account new sowing dates and rainfall parameters during the hearing, minor alterations to his revised calculations did not derogate from his ultimate findings with respect to the order of magnitude that the meter was under-recording; and
6. dams 1 and 2 were dry at the commencement of the 2016/2017 and 2017/2018 cotton seasons according to Wheildon's evidence, and therefore, water from the dams did not amount to an additional water source that could impact upon Dr Meyer's findings (T341:40-50).
Payson contended there were several reasons why Dr Meyer's evidence did not prove to the requisite standard that the meter was under-recording by half:
1. first, Dr Meyer was not a cotton farmer (T172:47-48). Nor was he a farmer in Moree (T172:50-173:01) and he had never been to Binneguy Station (T173:03-04);
2. second, Dr Meyer proceeded on the basis the cotton crop was only able to access 70% of the on farm water due to losses including evaporation, surface drainage, and seepage (T165:03-09). He made this assumption based upon a study completed in 2013 which stated that in the previous ten years water use productivity had improved by 40% and that there was potential for further improvement in water use efficiency (T165:42-44). However, despite the absence of a more recent study and "good improvement" in the previous decade (T166:31-33), Dr Meyer refused to accept that greater efficiencies than those observed in 2013 were possible. This was contrary to Wheildon's evidence of the water management system at Binneguy Station (T51:41-49);
3. third, Dr Meyer relied upon weather and climatic data from Moree post office and Moree airport. These locations were not the closest weather stations to Binneguy Station. He accepted that the built-up environment of those stations would impact their recorded evaporation rates;
4. fourth, Dr Meyer's calculations did not take into account a number of matters that increased the efficiency of water usage at Binneguy Station, including:
1. Wheildon's irrigation practices (T49:45-46);
2. features of the irrigation system that reduced evaporation and seepage, such as the location of the dam near the irrigated fields (T50:26-32), the irrigation channel was relatively narrow (T50:34-46), and that the water was kept in a single source (T50:48-51:09); and
3. while the soil at Binneguy Station varied (T95:35-36), it included black soil that received and gave water easily and retained its moisture at significant depths (T53:11-28);
1. fifth, the method used by Dr Meyer was reliant upon the interpretation of NDVI images (T152:21-34) which was unreliable. For example, on at least one occasion Dr Meyer used the images to determine a sowing date for both cotton cropping seasons that was at least a month out from the true date of sowing;
2. sixth, Dr Meyer's opinion was limited to an estimate of the amount of water that was required by each crop and did not assist the Court in determining how much water was in fact available for that crop. The effect of Dr Meyer's evidence was that when the amounts recorded by the meter and rainfall were subtracted from the total crop requirement, there was an amount remaining which was unaccounted for. He therefore had not taken into account a number of sources of legitimate water including:
1. soil moisture;
2. water in the dams at the commencement of each season (T172:25-27);
3. water shed on the property that ran into the dams; and
4. runoff water that was collected from the irrigated crop itself and fed back into the dam;
1. seventh, Dr Meyer only took into account rainfall that fell on the crops and not rainfall that was captured by the dams; and
2. eighth, Dr Meyer was not privy to the rainfall data recorded (and adopted) by Wheildon at various locations on Binneguy Station during his tenure there (in the Payson drop box).
According to Payson, the prosecutor therefore had not excluded the reasonable possibility that unquantified legitimate sources of water contributed materially to any shortfall between the amount of water available from the water licence and rainfall, and the amount of water required for the crop during the 2016/2017 and 2017/2018 cotton seasons.
Having said this, I accept that to a limited extent Barne's farming inexperience meant that he relied on Wheildon's advice and guidance. It was the case that Wheildon made decisions with respect to the management of the cotton crop at Binneguy Station without consulting Barne. Barne was also absent from Binneguy Station for periods of time while the offending conduct was occurring.
But the fact remains that upon being made aware of the under-reporting Barne did nothing to rectify the situation, and moreover, instructed Wheildon to reinstate the Doppler sensor incorrectly. Moreover, Wheildon played no role whatsoever in the commission of the dam use and construction offences.
I therefore find that Payson was, at all relevant times, in complete control of the causes of the commission of all of the offences.
Payson submitted that Barne's decision making was adversely affected by his isolation at Binneguy Station (which he had returned to after many years abroad), a difficult relationship with his father, mental health issues, and the poor advice of those around him, including his father, Taunton, and Wheildon (T353:23-41).
The evidence before the Court discloses that Barne's decision making capacity was impaired by his mental health illness during the offending period. I have taken this into account.
I am, therefore, not satisfied beyond reasonable doubt that the sole motive for the commission of the meter offences was that of profit-making. However, the meter offences were at least in part committed for financial gain and this is sufficient to amount to a factor in aggravation pursuant to s 21A(2)(o) of the CSPA. Payson benefited financially from the commission of the meter offences and was, at least to some extent, motivated by profit. This is demonstrated by the business decisions made by Payson in respect of the 2017/2018 cotton season. Nevertheless, because the evidence also shows that there was a causal connection between Barne's poor mental health and his decision-making capacity at the time of the commission of these offences, I do not place full weight on this factor in aggravation.
For identical reasons, pursuant to s 364A(1)(h) of the WMA I am satisfied beyond reasonable doubt that the meter offences were at least partially motivated by financial considerations.
The prosecutor conceded that the dam construction and use offences were not committed for financial gain. Rather, increasing the storage capacity of Binneguy Station was the primary purpose for the construction of dam 2 as evidenced by:
1. Wheildon's unchallenged evidence that the purpose of the works was to increase the dam capacity. Barne had been advised to increase the dam capacity at Binneguy Station by Taunton; and
2. an email from SMK Consultants to Barne on 23 January 2016, which confirmed that the construction of dam 2 would provide "another 100ML capacity". Later text exchanges between Barne and Wheildon also showed that the dam construction was designed to increase the dam capacity on the Station. For example, on 2 March 2016 Barne sent Wheildon a text stating "just got the survey results. New Dam 662 Megs/Old Dam 1175 Megs. Got to be happy with that result".
I am, therefore, satisfied to the requisite criminal standard that the dam use and construction offences were committed to increase the water storage capacity at Binneguy Station and not for financial gain.
Payson accepted that each of the commission of the meter offences involved several occasions when it knew the meter was under-recording while the water was being pumped, thereby falling withing the ambit of s 21A(2)(m) of the CSPA.
The concession was correctly made having regard to the finding made above, including the fabricated water budget and the deception of the regulator. In other words, I find that the commission of the meter offences involved a series of criminal acts engaging the aggravating factor contained in s 21A(2)(m) of the CSPA.
In addition, unlike the commission of the second meter offence, the commission of the first meter offence was opportunistic. Furthermore, Payson did not tamper with the meter to cause it to under-record, nor did it know how the meter was under-recording until December 2017. This demonstrated that the meter offences were not planned to such an extent that the Court could be satisfied beyond reasonable doubt that a more extensive criminal undertaking occurred.
In Williams v R McClellan J described the scope of s 21A(2)(n) of the CSPA in the following terms (at [19]-[21]):
19 Section 21A(2)(n) has been considered by this Court on previous occasions. In Fahs v R [2007] NSWCCA 26 at [21] Howie J said that the provision conveyed "more than simply that the offence was planned". His Honour suggested that a street dealer who purchased drugs simply to obtain the cash to purchase drugs for his own use is unlikely to fall within the provision (see [22]). However, those responsible for maintaining the drug distribution network are likely to be committing offences which form part of planned or organised criminal activity.
20 In my opinion the approach adopted to s 21A(2)(n) by Howie J is correct. It is only when the particular offence is part of a more extensive criminal undertaking that the subsection is engaged. The fact that an offence was planned does not of itself bring it within the subsection.
21 In the present case it is plain that before committing the offence the applicant must have taken steps to confirm that the victim was not in his home and made preparations to disarm the alarm system. He must have used a significant vehicle to remove all of the items which were stolen. Those items involved significant art works which could only be effectively disposed of through a confined market. If the applicant's crime was to bring him any significant reward he had to appreciate the nature of the objects he was preparing to steal and believed he had a capacity to dispose of them. However, although the offence was obviously planned there is nothing in the evidence to indicate that it formed part of "a planned or organised criminal activity".
Similarly, in RL v R the Court of Criminal Appeal stated that the mere fact "there were several offences revealing some broad pattern of behaviour does not mean there was relevant 'planning', rather, reoccurring conduct could indicate 'opportunistic behaviour'" (at [37]).
Payson's taking of water while knowingly the meter was under-recording was not part of an organised criminal activity such that s 21A(2)(n) of the CSPA is engaged. It was plain that the commission of the first meter offence was opportunistic. No evidence was before the Court proving that Payson planned the 2016/2017 cotton season on the basis that it would need more water than was recorded by the meter.
Although the second meter offence was premediated, that in and of itself does not establish that Payson was engaged in planned criminal activity of the kind described in Williams v R.
I am therefore not satisfied that either of the meter offences formed part of a planned criminal activity for the purposes of s 21A(2)(n) of the CSPA.
Further, a defendant who pleads guilty but puts the prosecution to proof on numerous factual issues, and who subsequently loses the contest, may not be entitled to a full discount for a plea of guilty (R v AB [2011] NSWCCA 229; (2011) 59 MVR 356 at [2]-[3]).
In R v AB Johnson J stated that (at [32]-[33]):
32 Likewise, a person who pleads guilty but puts the Crown to proof on certain factual issues and who loses that dispute, is not entitled to the same discount for a plea of guilty, on utilitarian grounds, as a person who does not require such a contested hearing.
33 These observations will have no application to the determination of the present Crown appeal. However, as a matter of general principle, this Court should state that the utilitarian value flowing from a plea of guilty is not a fixed element, and is capable of erosion as a result of the manner in which the sentencing hearing is conducted. This involves no more than an acknowledgment of the fact that what may be gained in utilitarian terms as a result of the avoidance of a trial may be lost, also in utilitarian terms, by way of a protracted sentencing hearing involving the adducing of evidence and the consumption of public resources for a purpose ultimately determined adversely to an offender.
After expressing his Honour's agreement with Johnson J's reasoning and orders, Bathurst CJ opined (at [2]-[3]):
2 In par [33] of his judgment, Johnson J emphasises that, as a matter of general principle, the Court should state that the utilitarian value flowing from a plea of guilty is not a fixed element and is capable of erosion as a result of the manner in which the sentencing hearing is conducted. I agree. Whilst, as Spigelman CJ pointed out in R v Thomson & Houlton [2000] NSWCCA 309; (2000) 49 NSWLR 383 at [152], the primary consideration for the extent of a utilitarian discount was the timing of the plea this should not obscure the fact that there may be circumstances as Johnson J has pointed out where the utilitarian value may be eroded. Equally, there may be some exceptional circumstances in which it is appropriate to give a full utilitarian discount for a plea, notwithstanding the fact that it has not been entered at the earliest opportunity.
3 That is not to say that sentencing courts should not generally continue to follow the approach in R v Borkowski [2009] NSWCCA 102; (2009) A Crim R 1, but merely that the principles have to be applied by reference to the particular circumstances in any case.
These principles have been applied in Owens v R [2017] NSWCCA 16 (at [64]), Martin v R; R v Martin [2021] NSWCCA 316 (at [64]-[78]) and Secretary, Department of Planning and Environment v Sell & Parker Pty Ltd [2022] NSWLEC 60 (at [402]-[409]).
In Barlow the defendant indicated his intention to plead guilty two working days prior to the liability hearing and he was subsequently unsuccessful on a number of contested factual matters agitated by him during the sentence hearing. Preston J held (at [96]):
96 I find that the significant delay in indicating and entering the pleas of guilty significantly reduces the utilitarian value of the pleas. Much of the utilitarian benefit that ordinarily would come from pleas of guilty was lost by Mr Barlow delaying indicating and entering the pleas of guilty until just before and at the trial. I assess the utilitarian value to be at the lower end of the range of 10% - 25%, namely at 12.5%.
In circumstances where Payson has been unsuccessful with respect to a significant part of its case in mitigation, namely, its knowledge of the extent of the meter under-recording and the actual extent of that under-recording, it is appropriate that the discount is reduced to reflect the eroded utilitarian value of Payson's pleas of guilty. I therefore find that Payson is entitled to a 12.5% discount for the utilitarian value of its of guilty pleas.
Barne was present throughout the sentence hearing on behalf of Payson (T3:36-37).
The prosecutor submitted that in his oral evidence Barne qualified his written expression of remorse relying on the following exchange (T313:27-49):
Q. When your company borrowed $2 million back when you were establishing the business, you guaranteed it, didn't you? You guaranteed the loan?
A. Yes.
Q. At that stage, you were certainly willing to put yourself forward as guaranteeing the company would pay back the loan needed to run an agricultural business?
A. Yes.
Q. I guess what I'm asking is, now that you find the company in a position where it faces the possibility of having a fine imposed, whether you'd be, effectively, willing to stand, in essence, as a guarantor for it paying that fine. In other words, making sure that it did pay the fine. I think you're telling me that you're not prepared to commit to that at all, is that right?
A. I don't think it makes any sense at all that I would commit to anything that I don't fully understand and don't understand the ramifications of. That's my position.
Q. Is it possible that, notwithstanding your expression of acceptance of responsibility in your affidavit, that you're not really accepting full responsibility for the wrongful conduct that was engaged by the company through your actions?
A. No.
Accordingly, the prosecutor submitted that the Court should be circumspect with respect to Payson's expression of remorse (citing Waste Recycling at [203]-[205] and Chief Executive, Office of Environment and Heritage v Boyle [2019] NSWLEC 54 at [101]-[102]).
Payson disagreed, emphasising the genuiness of the contrition and remorse expressed on its behalf by Barne. Barne also stated that he felt personal shame in respect of Payson's offending conduct and its impact upon him and his family. Further, he acknowledged the impact of the commission of the offences upon the environment and upon the cotton industry (T361:24-33).
While Payson has expressed contrition, including a considered apology given by Barne on behalf of it, I am unable to accord full weight to the demonstration of remorse having regard to the fact that:
1. Barne continued to blame Wheildon, and others advising him, for Payson's offending conduct;
2. Barne refused, on behalf of Payson, to commit to paying any penalties imposed by this Court despite deposing that Payson had accepted full responsibility for its actions; and
3. Payson did not voluntarily report the commission of the offences. Rather, the prosecutor was notified by Belynda Wheildon (Wheildon's partner) after Wheildon's employment was terminated by Payson (see the email to the NRAR service desk dated 30 July 2018).
I therefore place only moderate weight on this factor in mitigation.
I agree with the prosecutor that there is a need for specific deterrence in this instance. Payson has committed four offences and, in relation to the meter offences, it did so knowingly. Furthermore, Payson continues to operate Binneguy Station as a cotton farming enterprise. I accept the submission of the prosecutor that the penalty imposed on Payson must serve to reinforce its responsibility to ensure that it carries out its activities in compliance with the WMA.
Finally, the Court must impose a sentence that achieves the purpose of denouncing the conduct the subject of the offences and making Payson accountable for its actions.
The prosecutor submitted that, with respect to the meter offences, the offending conduct was fundamentally antipathetic to the water sharing scheme. The purposes of denunciation and retribution, therefore, have a genuine role to play.
I agree. The meter offences are objectively serious and it is appropriate that the Court ensures that the penalty imposed denounces such conduct.
With respect to the dam use and dam construction offences, the prosecutor accepted that Payson's offending conduct was of a lower order of, and therefore, objective seriousness. It was not appropriate to afford any significant weight to denunciation and retribution in making Payson accountable for that offending conduct. Again, I agree.
The meter offences before the Court are, in my opinion, more objectively serious than in the authorities reviewed above. The dam use and construction offences are, however, comparable. Many of the subjective circumstances in mitigation present in this case were also relevant factors in the determination of an appropriate penalty in Thompson, Barlow, Budvalt and Bao Lin.
According to Payson, the passage of time between the commission of the offence and the sentence hearing gave rise to considerations of fairness in the determination of the appropriate sentence, requiring what might otherwise be an undue degree of leniency being extended to the defendant (R v Todd [1982] 2 NSWLR 517 at 519 endorsed in Mill v The Queen [1988] HCA 70; (1988) 166 CLR 59 at 66). There was a correlation between the delay and Payson's diminished capacity to pay a fine that should therefore be taken into account by the Court.
Payson adduced evidence of its financial position in the first and second Barne affidavit, namely, that:
1. Payson's financial statement for 2020/2021 prepared by C & W Financial Services, showed that Payson had net profits of $813,120 and $354,748 for the 2016/2017 and 2017/2018 financial years, respectively;
2. that by the end of the 2020/2021 financial year, Payson's financial position had deteriorated and its net assets totalled $77,288; and
3. the "Profit & Loss Statement Henry Payson Pty Ltd Projected Profit (Loss) as at 30/06/2022" prepared by C & W Financial Services, projected that Payson will make a loss of $874,872 in the 2021/2022 financial year.
The prosecutor submitted that the Court should not reduce the penalty amount that it would otherwise see fit to impose upon Payson because:
1. the evidence did not establish Payson's impecuniosity. First, the financial statements furnished to the Court were special purpose reports for the sole purpose of distribution to the company's members with no relevant accounting standard applied to them. Second, Payson's financial position in 2021/2022 was a result of regulatory notice issues and was therefore not an accurate reflection of the company's overall financial capacity. Third, the depreciation schedule contained in the 2020/2021 financial statement indicated that Payson has assets valued at $684,548. Fourth, the amount nominated for farming expenses in the 2021/2022 estimate was anomalously high compared to the farm expenses recorded in previous financial statements;
2. the forecasted loss for the 2021/2022 financial year did not establish that Payson had no means of paying a fine. Importantly, it did not establish that the farming business at Binneguy Station was not viable;
3. the Court was not provided with any of Payson's bank statements or tax returns;
4. the consideration of means to pay also includes whether Payson can obtain a loan and there was evidence before the Court that Barne has substantial assets and had previously acted as guarantor for a loan of $2,000,000 from the National Australia Bank in favour of Payson. Notably, Barne has in excess of $10,000,000 equity in Binneguy Station and an unspecified equity in WALs worth several million dollars (T218:13-20). Barne estimates that the current value of Binneguy Station is $15,000,000; and
5. the circumstances of the offending conduct are such that the Court should ensure that the fine serves an adequate general and specific deterrent, even if the quantum of that fine is beyond the capacity of Payson to pay (citing Smith v The Queen (1991) 25 NSWLR 1 at 23-24 and Darter v Diden [2006] SASC 152; (2006) 94 SASR 505 at [29]-[31]).
In reply, Payson submitted that none of its evidence with respect to its financial position was the subject of objection by the prosecutor and that Barne was not cross-examined on the financial position of Payson, despite being the company's sole director. It would therefore be unfair of the Court to reject the financial evidence provided by Payson. Payson also rejected the submission that its capacity to obtain a loan to pay a fine was material.
Payson further argued that the financial information before the Court showed that Payson would only be able to pay a nominal fine and the partial costs of the prosecutor. It emphasised that it was a small farming enterprise, operated by one individual at Binneguy Station.
The standard imposed by s 6 of the Fines Act is a high one and the onus is on Payson to prove, on the balance of probabilities, that it is unable to pay any monetary penalty imposed by the Court. To discharge this onus, Payson must provide all relevant financial information that is reasonably and practically available to it to the Court in order to demonstrate the state of its asserted impecuniosity (see Albiston at [183]-[184]). It has not done so.
Although the prosecutor did challenge Payson's financial statements, he was not obliged to do so in light of the onus on Payson. The evidence before the Court is not sufficient. The Court has not been furnished with, for example, Payson's bank statements, tax returns, or any property title searches.
I therefore do not find that Payson is unable to pay whatever monetary penalty the Court is likely to impose.
In the circumstances, it is appropriate to make an order that Payson pay the prosecutor's professional costs as agreed or assessed and its fixed investigation costs.