JJ and ABS Investments Pty Ltd v Environment Protection Authority

Ms M Junor (Solicitor) (Respondent) Archbold Legal (Appellant)

Office of Environment and Heritage (Respondent) File Number(s): 60659 of 2011

ex tempore Judgment 1On 2 May 2011 the appellant was convicted at the Downing Centre Local Court of an offence against clause 9(1) of the Protection of the Environment Operations (Clean Air) Regulation 2002 (now repealed) ( the Regulation ). It was fined the sum of $8,000 and ordered to pay court costs of $79. It had pleaded not guilty before the learned Magistrate. 2The applicant seeks leave to appeal to this Court against the sentence imposed upon it pursuant to s 33(1) of the Crimes (Appeal and Review) Act 2001 ( the Review Act ). Its summons for leave was not filed in this Court until 29 July 2011, that is, some 60 days later than the time within which it was entitled to bring an appeal as a right pursuant to s 31 of the Review Act. That delay has been explained. 3Before the learned Magistrate, the appellant was represented by Mr John McMahon who, with his wife Janet, are its only two directors. Following the conviction of the appellant on 2 May, Mr McMahon and his wife determined that there would be an appeal. To that end a notice of appeal was signed by Mr McMahon at the Richmond Local Court on 20 May. It was apparently prepared with the assistance of the staff of the Richmond Local Court. Regrettably it was prepared as a notice of appeal to the District Court. 4Thereafter the appeal to that court was listed on two occasions before it was appreciated that the appeal ought properly to have been brought to this Court. Once the error was appreciated the summons for leave to appeal was promptly filed in this Court. In those circumstances I am prepared to grant leave to appeal. That course is not opposed by the respondent. In the circumstances I have briefly outlined, I am satisfied that it is in the interests of justice to grant that leave (s 36(2) of the Review Act). 5As I have indicated the offence is brought for a breach of cl 9(1) of the Regulation. That clause of the Regulation relevantly provided as follows: " 9 Motor vehicles emitting excessive air impurities (1) An owner of a motor vehicle is guilty of an offence if the vehicle emits excessive air impurities while being used. ... (4) For the purposes of this clause, a motor vehicle emits excessive air impurities if it emits air impurities in the circumstances described in section 154(2) of the Act." 6Section 154(2)(a) of the Protection of the Environment Operations Act 1997 ( the Act ) relevantly provided as follows: "(2) For the purposes of this Part, a motor vehicle emits excessive air impurities if: (a) when in operation, it emits as determined in accordance with the regulations, air impurities in excess of the standard of concentration and the rate (or the standard of concentration or the rate) prescribed in respect of the class of motor vehicle to which the motor vehicle belongs ...". 7Clause 8 of the Regulation then defines excessive air impurities. It does so for the purpose of s 154(2)(a) of the Act by providing that a motor vehicle emits excessive air impurities as referred to in that section: "if, when in operation, it emits air impurities in excess of such a standard of concentration that air impurities are visible for a continuous period of more than 10 seconds when determined in accordance with Test Method 31". 8Test Method 31 relevantly requires that when an observer is determining if a vehicle is being used in breach of the clause limiting visible emissions the following principles apply: (i) the observer must be satisfied that the vehicle generating the visible emissions is correctly identified; (ii) the observer must be satisfied that the visible emissions are visible not just because of heat or the condensation of water vapour; and (iii) the emissions must be continuously visible for more than 10 seconds. 9The maximum penalty for an offence against cl 9 of the Regulation is 400 penalty points in the case of a corporation. This translates to a penalty of $44,000. 10The appellant is the owner of an Isuzu truck registered number SDA 552 fitted with a refrigerated body and used for delivery of milk to commercial and retail outlets. It is a truck with a diesel engine and is said to be about 20 years old. 11On 22 June 2010 the appellant's truck was observed by an officer of the respondent to be driving on the City West Link at Lilyfield. It was seen by that officer to be emitting black smoke from an exhaust pipe that rose above the driver's cabin of the truck. The emission of black smoke was then timed by the officer. It was timed to occur for a continuous period of 16.52 seconds. In the context of the regulatory provisions to which I have referred, the relevance of that period will be apparent. The black smoke that was then observed extended for about 2 metres behind the rear of the truck. 12As I have said, the appeal that has been brought by the appellant is against the sentence that was imposed upon it by way of a penalty and is not an appeal against its conviction. This had a consequence as to manner in which this appeal was conducted. Section 37(1) of the Review Act requires that an appeal "against conviction" must be by way of rehearing on the basis of the evidence given in the original Local Court proceedings. Subsection (2) of that same section permits fresh evidence to be given by leave only if "the interests of justice" so require. No comparable provision refers, in terms, to appeals against sentence. 13As was observed by Pepper J in Terrey v The Department of Environment, Climate Change and Water [2011] NSWLEC 141, by an amendment made to s 37 of the Review Act in 2009, there seems to have been left a lacuna in the legislation so far as it relates to appeals that are confined to an appeal against sentence. The fact that there are appeals available both against conviction and against sentence is recognised by the legislation both by reference to s 31(2) and also by reference to s 39 of the Review Act. In the result, the manner in which the appeal against sentence may be conducted is, on the face of the statutory provisions, at large. 14The provisions of the Review Act pertaining to appeals to this Court are found in Pt 4. They generally, but not precisely, mirror the provisions of Pt 3 of the Act which relates to appeals from the Local Court to the District Court. Section 18, which is found in Pt 3, is mirrored in the provisions of s 37, as that latter section applies to appeals to this Court. However s 17, also in Pt 3, provides that an appeal against sentence to the District Court is to be conducted by rehearing on the evidence given in the original proceedings "although fresh evidence may be given in the appeal proceedings". No leave is required to adduce that fresh evidence. 15Given the comparibility of provisions between Parts 3 and 4 of the Review Act, it seems to me unlikely that the legislature would have intended there to be a different procedure for conducting an appeal, depending upon whether the appellate court was the District Court or this Court. I therefore propose to assume the legislative intent to have been that an appeal against sentence to this Court be an appeal to be conducted in the same manner as that applicable to an appeal of the same kind to the District Court. That is, an appeal against sentence should be by way of rehearing on the material before the Local Court but with a right to call fresh evidence in this Court without leave. 16Both parties were content to conduct the appeal on this basis. Each of them tendered fresh evidence. 17In the hearing of this appeal, the appellant's submissions were succinct. It contended that the penalty imposed in the Local Court was too high. It sought to demonstrate that submission in a number of ways. 18As a result of the observations made of the appellant's truck on 22 June 2010, the respondent caused a penalty infringement notice to be issued to the appellant. The amount payable in accordance with that notice was $400.00. Upon its receipt, Mr McMahon, on behalf of the appellant, did not believe that his truck had been emitting the black smoke that was the subject of the charge. He made representations to the Office of State Revenue to that effect. The Office of State Revenue is the office within which is the State Debt Recovery Office, the entity responsible for recovering penalties payable pursuant to penalty infringement notices. 19Mr McMahon's representations were apparently received by the latter office. As a result of it appearing that there was a dispute as to whether the offence had been committed, a court attendance notice was issued to the appellant for the matter to be determined by the Local Court. 20On the basis that only a penalty infringement notice had issued for the offence and that Mr McMahon's representations had attempted only to exculpate the company from liability to pay the fine sought in the notice, it is now submitted that the penalty should be $400, as had been sought by the notice. 21As a further demonstration that the penalty imposed by the learned Magistrate was excessive, the appellant also points to the provision of s 161 of the Act as it applied at the time of the offence. That section authorised the giving of a notice to the owner of a motor vehicle suspected of emitting excessive air impurities requiring the vehicle to be repaired so that the emission of excessive air impurities no longer occured. Where a notice pursuant to that section was given, it was an offence to use the vehicle until the repair had been undertaken in accordance with the notice. It is submitted on behalf of the appellant that the giving of such notice would have been the more appropriate course to have taken in the circumstances. The consequence of this submission, so it is said, is that the financial burden upon the appellant would have been far less than the imposition of the fine imposed by the learned Magistrate. 22Finally, the appellant prays in aid the provision of s 6 of the Fines Act 1996 ( Fines Act ). Fresh evidence filed in the appeal in the form of an affidavit sworn by Mr McMahon identifies the financial circumstances of both his wife and himself. He also annexes financial statements and copies of income tax returns prepared for the appellant for both the financial years 2009 and 2010. These show only a very modest profit for the appellant after payment of equally modest salaries and directors' fees to each of Mr and Mrs McMahon. Both company profits and salaries paid to Mr and Mrs McMahon were less in 2010 than they were in 2009. 23Mr McMahon gave oral evidence. He indicated that for the 2011 financial year, turnover and profit for the appellant had been less than that which it was in 2010. This had the consequence that he had not drawn a salary from the company for a number of months. Mrs McMahon has returned to employment, working as a mushroom picker, and it is her wage that is supporting the household. None of this evidence was challenged by the respondent. 24For its part the respondent acknowledges that the offence is one of low objective seriousness. However it identifies those considerations applicable to the imposition of an appropriate sentence discussed in the authorities. It also identifies the need for consideration of those matters to which attention must be given by operation of s 241 of the Act as well as the provisions of the Crimes (Sentencing Procedure) Act 1999 ( CSP Act ). Further, the respondent submits that neither the penalty payable under the penalty infringement notice nor the notice procedure available to it under s 161 of the Act is relevant to the determination of an appropriate penalty. 25I agree with the respondent's submissions. It seems to me that once the recipient of a penalty infringement notice elects not to pay the penalty imposed by that notice for the offence identified, with the consequence that the charge is heard by a court, then ordinary principles of sentencing apply to determine an appropriate sentence or penalty once the offence is proved. Moreover, the procedure available to the respondent to issue a notice under s 161 of the Act is largely irrelevant to the determination of an appropriate penalty. The election to take such a course of action is entirely within the policy discretion of the respondent. The only relevance that the issue of a penalty infringement notice may have is the implicit recognition by its issue that in the particular circumstances of the offence to which it relates, it is considered to be at the lower end of objective seriousness. 26Among the matters that a sentencing court is bound by s 241 of the Act to consider in respect of the present offence is the extent of environmental harm occasioned or likely to be occasioned or caused by the commission of the offence. Evidence lead by the respondent before me in this regard was from Suzanne Quigley, a senior scientific officer employed by the respondent. She indicated that the level of airborne pollution in Sydney exceeds air quality standards adopted throughout Australia. A significant contribution to that pollution level is from motor vehicle emissions, with emissions from diesel engines involving a disproportionately high contribution of particulate matter and potentially toxic gases to atmosphere. These emissions not only contribute to photochemical smog but, in turn, are also harmful to human health. It is acknowledged by Miss Quigley that a single diesel vehicle emission can involve a relatively minor contribution to overall pollutants emitted from diesel vehicle exhausts. However, she opined that, in aggregate, the emissions from individual diesel vehicle exhausts in the Sydney region are responsible for the major part of the lack of air quality in the region. Her evidence was not challenged. 27Further consideration mandated by s 241 of the Act is directed to the practical measures that might be taken to prevent, control, abate or mitigate the harm and the extent to which the appellant could reasonably have foreseen harm or likely harm to be caused. There was new evidence given by Mr McMahon relevant in that context. While he indicated that he had taken steps to maintain his vehicle, the invoices annexed to his affidavit indicated that since January of 2008 the only time that service was provided to the component of the vehicle engine that affected engine emissions was in May 2011, apparently in response to the appellant's conviction in the Local Court. There was no evidence of attempts made to check the emissions from the vehicle following receipt of the penalty infringement notice in 2010. It is clear that measures were open to the appellant to control the emissions from its vehicle and that it could reasonably have foreseen the harm to the environment earlier described. Its failure to attend to such measures is relevant to the imposition of penalty. 28Other factors bearing upon the objective seriousness of the offence include a consideration of the maximum penalty and the state of mind of the offender, together with its reasons for commission of the offence ( Bentley v BGP Properties Pty Limited [2006] NSWLEC 34; (2006) 145 LGERA 234). I have already indicated that the maximum penalty for the offence by a corporation is $44,000. That penalty reflects the public expression of the seriousness of the offence ( Camilleri's Stockfeeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683). Clearly that maximum is reserved for a very serious offence and a penalty proportionate to the maximum is appropriate for an offence that is at the lower end of objective seriousness. 29The appellant submits that the offence was not intentional on the part of the company. The respondent accepts that this is so, as do I, having had the benefit of reading the evidence given below and hearing Mr McMahon in the witness box. Mr McMahon believed that by the carrying out of repairs and maintenance that he identified, it was unlikely that his vehicle would cause the emissions that were observed. While undoubtedly that was his belief, subsequent events demonstrated that his belief was not well founded. 30Taking into account the provisions of the Act to which I have referred, the maximum penalty for the offence and the other matters to which I have referred, I accept the assessment of both parties that the offence, while not trivial, is at the low end of objective seriousness. 31The provisions of the CSP are also relevant to be considered. Section 3A of that Act identifies the purposes of sentencing. They include denunciation of the offending conduct and deterrence both general and specific. These are matters that need to be reflected in the penalty imposed. Section 21A of the same Act identifies matters to be considered both in aggravation and mitigation of the offence. It is not suggested that there are aggravating factors for which a penalty otherwise appropriate should be increased. However there are factors relevant to mitigation. These seem to fall into only two categories. First, the appellant has no prior record for any offence whatsoever. Second, the environmental harm occasioned by this particular offence was not itself substantial, although as the evidence earlier described indicates it represented an incremental increase in the pollution content of the air in Sydney. 32I have earlier recorded that the appellant pleaded not guilty in the Local Court. Thus, there were no mitigating circumstances by reference to a plea of guilty, nor in relation to expressions of contrition. Even in this appeal, there was no expression of contrition for what had occurred. That is relevant by reference to those factors identified in s 21A, not by way of aggravation, but to negative a factor that would otherwise require consideration in mitigation of the offence. 33It is also necessary that, in imposing a penalty, consideration be given to what is described in the authorities as even-handedness. That is, the penalty should be that which is commensurate with that imposed by courts for the same or similar offences. As the cases all recognise, the application of that principle is attended with considerable difficulty, given the great variability in both objective and subjective circumstances that will pertain to the commission of a particular offence. 34The respondent has identified three cases in this Court in which penalties have been imposed following convictions for what might be called "smokey vehicle emissions". Those penalties range from $80,000 to $16,500. However, an examination of the circumstances relevant in each of those cases demonstrate them to be far more serious than the present case. In large measure they involved offences that had been repeated by operators of a large number of vehicles. Moreover, the subjective circumstances there found were not commensurate with those of the present appellant. 35I have also had recourse to the statistics kept by the Judicial Commission in respect of penalties imposed in Local Courts for offences of a similar kind to that with which the appellant is presently charged. Statistics can always give a somewhat distorted view. However, having regard to those statistics it would appear that a significant percentage, in excess of 50 percent, have involved the imposition of penalties between $1,000 and $5,000 for an offence of the present kind. 36The imposition of an appropriate penalty requires an instinctive synthesis of both the objective and subjective factors pertaining to the offence and the offender. So much is apparent from the statement of principle by the High Court in Markarian v The Queen (2005) HCA 215; (2005) 228 CLR 357. In applying that principle it seems to me that an appropriate penalty for the offence with which the appellant is charged would be $3,000. 37I have earlier referred to the appellant's evidence as to its financial position and its invocation of the provisions of s 6 of the Fines Act. I am satisfied that the appellant is operating under significant financial constraints. Its capacity to pay a penalty is limited. The appellant's assets and liabilities are essentially those of Mr and Mrs McMahon. In the circumstances and applying the provisions of s 6, it seems to me appropriate to reduce the penalty otherwise appropriate to $2,000. I note that under the provisions of s 10 of the Fines Act an application may be made to the Registrar for further time to pay. 38I have earlier referred to the fine of $8,000 imposed by the learned Magistrate. Her Honour did not have before her all of the evidence tendered before me, nor the benefit of submissions made on behalf of the parties as extensive as those which I have received. In particular I have had the benefit of submissions by counsel retained by the appellant. With the benefit of that material and the assistance offered I have little doubt that her Honour would have appreciated the range of fines appropriate to be imposed to be less than one extending to $8,000. She could not be criticised for taking the position that she did. 39Neither party has sought costs of the appeal. That is appropriate. Although the appellant has been successful in having the fine imposed upon it reduced, it nonetheless comes to the Court by reason of its breach of the Regulation, a breach that it does not challenge in this appeal. In the circumstances it is an appropriate exercise of discretion afforded to me under s 49(4) of the Review Act that no order for costs be made for either party in this appeal (cf. Kirzner, Alex v Manly Council; Kirzner, Natalia v Manly Council [2009] NSWLEC 13 and the cases therein cited in the context of the award of costs in appeals of this kind). 40The orders that I make are therefore as follows: 1.Grant leave to appeal. 2.Appeal is allowed. 3.Set aside the fine of $8,000 imposed by the Downing Centre Local Court on 2 May 2011. 4.The appellant is fined the sum of $2,000 for the offence charged. 5.Grant 3 months to pay the fine. 6.Each party is to pay its own costs of the appeal. 7.Exhibits may be returned.